The Hindu: Published on 18th July 2025:
Why in News?
China is rapidly transforming into a global clean energy superpower, having installed more wind and solar capacity in 2024 than all other nations combined. With state-backed enterprises, massive investments, and long-term planning, China dominates the entire green energy supply chain — from mining raw materials to exporting advanced technologies. The story showcases how China’s green revolution is redefining global energy leadership and policy models.
Background:
In the early 2000s, China suffered from severe air pollution, driven by heavy coal usage and industrialisation.
To combat this, China initiated pilot renewable energy projects, supported by the Renewable Energy Law (2005) and its 11th Five-Year Plan (2006–2010).
Public pressure, energy insecurity, and growing power demand were key triggers.
From $10.7 billion in 2006 to $940 billion in green investment by 2024, China used its state machinery to drive an energy transition.
Key Highlights / Facts:
- $940 billion invested in renewable energy in 2024 alone.
- Dominates solar panel, wind turbine, battery manufacturing globally.
- Owns the renewable supply chain, including key raw materials like polysilicon and lithium.
- State-Owned Enterprises (SOEs) such as State Grid, Genertec, Huaneng play a central role.
- Belt and Road Initiative (BRI) used to export green tech globally.
- Overcame challenges like transmission bottlenecks and wasteful subsidies.
Government Strategy:
Centralised planning via the National Development and Reform Commission (NDRC) and the National Energy Administration (NEA).
Massive subsidies, low-interest loans, and strong political support to SOEs.
Emphasis on pilot projects, later scaled nationwide.
Massive build-up of Ultra High Voltage (UHV) transmission lines to support remote renewables.
Role of State-Owned Enterprises (SOEs):
SOEs like State Grid, Genertec, and others received government mandates and capital to implement massive green projects.
Unlike private firms, SOEs didn’t face market constraints or profitability pressure.
Account for 55% of global renewable investment.
Act as ambassadors of Chinese green tech in global markets (Africa, Latin America, Europe, Asia).
Challenges Faced:
Grid Absorption Limits: Early installations of wind/solar often wasted due to poor transmission infrastructure.
Subsidy Mismanagement: Excessive, unchecked subsidies led to inefficiencies.
Redundancy & Waste: Build-at-all-costs attitude caused resource waste.
Global Criticism: Accusations of over-dependence and export dumping.
Corrective Actions Taken:
Investment in UHV transmission lines (State Grid increased spending from $33B in 2010 to $88.7B in 2024).
Shift towards efficiency over expansion.
Better integration of renewables into the national grid.
Tighter oversight mechanisms on SOE operations and subsidies.
Global Impact:
China's green industry is now a tool of statecraft and diplomacy.
It has created a global energy network in over 61 countries through tech export and infrastructure development.
Set the bar for low-cost renewable manufacturing, impacting pricing worldwide.
Driving global competition — with the U.S. responding through Inflation Reduction Act, and EU launching its own green tech initiatives.
Lessons for Other Countries:
Strategic planning and state coordination can dramatically accelerate clean energy transitions.
Public investment in R&D and grid infrastructure is essential.
SOEs can act as effective executors of national policy if adequately guided and monitored.
Renewable energy success depends not just on generation capacity but also on transmission, distribution, and storage infrastructure.
Future Outlook:
China aims to lead in next-gen green tech:
- AI-based smart grids
- Green hydrogen
- Thorium nuclear reactors
Intends to maintain its dominance through vertical integration, export expansion, and global standard-setting.
The global energy race is now not just about energy security but about geopolitical rule-setting in climate technology.
