The nation saw a remarkable investment flow of US$9 billion into the renewable energy sector last year, mostly in wind and solar segments, according to a report released yesterday by the United Nations Environment Program (UNEP).
The 46-page analysis says globally, investment in sustainable energy investment climbed from US$80 billion in 2005 to US$100 billion last year, with unprecedented growth in developing countries, particularly China, India and Brazil.
China, the world's largest producer of renewable energy, took a healthy 9 percent of global investment last year, which was helped by significant asset financing activity in the wind, biomass and waste sectors, the report says.
Eric Usher, head of Renewable Energy Finance at UNEP, told China Daily that growth was led by both the Renewable Energy Law the country promulgated last year and the Clean Development Mechanism, a carbon credit trading system under the Kyoto Protocol.
"We also see (in China) a more mature type of investment across the finance spectrum including public market and venture capitals," Usher said in a phone interview.
Chris Greenwood, director of operations in New Energy Finance who co-authored the report, added that State incentives also played a key role. He particularly referred to the government's goal of reducing energy consumption per unit of gross domestic product by 20 percent by 2010 from 2005.
The country is expected to continue embracing growth of 30 to 40 percent in sustainable energy investment this year, with more companies going public and the government's target of enhancing solar and wind power capacity, Greenwood estimated.
China aims to supply 15 percent of primary energy through renewable sources by 2020. Installed wind capacity, for example, almost doubled last year to about 2.3 gigawatts from 2005, according to the National Development and Reform Commission.
The UNEP report says that while renewable sources today produce about 2 percent of the world's energy, they now account for about 18 percent of global investment in power generation, with wind generation at the forefront.
Solar and biofuel energy technologies grew even more quickly than wind, but from a smaller base, it adds.
It attributes the growth to a combined effect of global concerns over climate change, increasing energy demands and energy security, in addition to persistently high oil prices, growing consumer awareness of energy efficiency and government incentives.
(China Daily June 22, 2007)