China is giving full play to the advantages of renewable energy in the Belt and Road Initiative

    Over the past five years, in accordance with the principles of extensive consultation, joint contribution and shared benefits, international cooperation on energy and resources has become a top priority in the construction of the Belt and Road Initiative. The rapid growth of China's renewable energy has laid a solid foundation for its participation in the "Belt and Road" renewable energy cooperation. On April 3, the Belt and Road Green Development Research Project released the latest report "The Belt and Road Renewable Energy Development Cooperation Path and its promotion Mechanism Research" and "ASEAN countries renewable energy development planning and Key case Study" in Beijing, showing the policy conditions, industrial conditions and existing opportunities and challenges affecting the "Belt and Road" renewable energy international cooperation.

    There is broad space for China to participate in international cooperation on renewable energy under the Belt and Road Initiative

    The executive report of the "Belt and Road" Renewable Energy Development Cooperation Path and its Promotion Mechanism Research "believes that the rapid growth of electricity demand along the" Belt and Road "countries has brought huge investment opportunities for Chinese enterprises. The report pointed out that China's participation in the "Belt and Road" renewable energy international cooperation space is large, broad prospects, and has formed a renewable energy international development cooperation model based on EPC, overseas plant construction, overseas mergers and acquisitions, and overseas research and development. Among them, EPC is the main way for China to contract engineering projects abroad, accounting for 80% of the total number of projects contracted abroad in 2016.
    The report puts forward a timetable for the development of renewable energy, suggesting that before 2020, China should mainly participate in renewable energy projects in key regions along the "Belt and Road", expand the publicity and promotion of overseas investment in renewable energy projects, and enhance the international influence of Chinese renewable energy enterprises; After 2020-2025, gradually improve the development of renewable energy integration projects and the application and promotion of smart energy, microgrid and other projects, and strive to improve the market participation and market recognition of Chinese enterprises in the development of renewable energy in the "Belt and Road" region. Chinese enterprises should focus on seizing the strategic development opportunities of the new Asia-Europe Land Bridge, the Bangladesh-China-India-Myanmar Economic Corridor and the China-Africa cooperation mechanism, and actively develop biomass and geothermal energy projects with photovoltaic and wind power as the main line.
    The report pointed out that China's participation in the "Belt and Road" renewable energy cooperation still faces many problems, the main obstacles include the high cost of project financing, the international recognition of Chinese standards is not high, the lack of renewable energy support in countries along the route and the existence of relevant legal and policy risks. Taking the overseas investment of Chinese wind power enterprises as an example, the equipment of Chinese enterprises has a certain price advantage compared with the United States General Electric Company, but the latter's financing interest rate in overseas projects is about 3%, while Chinese enterprises are generally as high as 6% to 7%, and the advantage of Chinese enterprises' low equipment cost is offset by the disadvantage of high financing cost. In addition, the vicious competition between Chinese enterprises, in various forms of international consortium project bidding, the behavior of lowering the price of each other has damaged the interests of the Chinese side, and troubled China's participation in the development of international renewable energy projects under the "Belt and Road".
    In order to further promote the participation of Chinese enterprises in the international cooperation on renewable energy under the Belt and Road Initiative, the report puts forward policy recommendations such as planning first, strengthening international exchanges, promoting cross-border joint research and joint consultation, and innovating cooperation models and financing models.

    Asean has the potential to develop renewable energy on a large scale

    Asean countries are not only one of the fastest growing economic regions in the world, but also one of the most energy-hungry regions.                  According to the executive report of the ASEAN Renewable Energy Development Plan and Key Case Studies, energy demand in the ten ASEAN countries has increased by 73% in the past 17 years, and will continue to grow at an average annual rate of more than 2% in the next 25 years, higher than the global average of 1%. At present, fossil energy is still the most important energy in ASEAN countries, fossil energy consumption accounts for about 74%, while renewable energy consumption accounts for only 6%. Since 2000, the share of coal in the energy consumption structure has been expanding, while the share of renewable energy consumption has remained basically unchanged.
    According to the report, ASEAN has the potential to develop renewable energy on a large scale. Taking Indonesia as an example, the country has the most abundant renewable energy resources, hydropower, geothermal and biomass energy resources rank first in ASEAN, and geothermal resources account for 40% of the total global geothermal resources. Wind resources are mainly concentrated in Vietnam, Laos, Thailand and some coastal areas, of which Vietnam has the most abundant resources. Asean countries are also rich in solar energy resources.       From the perspective of economic potential, ASEAN countries have ushered in a good time to develop renewable energy. For example, global wind and solar costs have fallen by 65% and 85% respectively over the past 15 years, and the global average cost of electricity per hour (LCOE) for onshore wind and PV has fallen to $0.06 / KWH and $0.10 / KWH respectively. Compared with the LCOE range of global fossil energy in 2017 (US $0.05 ~ 0.17 / KWH), the development of renewable energy has a certain economic advantage. Currently, the cost of wind power has fallen to a level comparable to the cost of coal power in ASEAN, and there is room for further cost reduction in the future.
    In the first phase of the ASEAN Cooperation Action Plan 2016-2025: In 2016-2020, ASEAN has set an overall regional target of 23% renewable energy in its primary energy mix by 2025, and member states have set national targets accordingly. Laos (59 percent), the Philippines (41 percent), Indonesia (26 percent), Cambodia (35 percent), Myanmar (29 percent) and Thailand (24 percent) all have development targets higher than the overall ASEAN target. Nevertheless, the report highlights the need for ASEAN countries to strengthen the integration of political, economic, legal and market instruments to promote the development of renewable energy. First, it is necessary to strengthen the top-level design of the country, including the introduction of renewable energy quota system at the appropriate time, and promote the establishment of green certificate trading market. Second, it is necessary to establish supporting renewable energy incentive policies, but also to help enterprises broaden financing channels, and enhance the financing capacity of renewable energy industry.
    At the same time, the report emphasizes that due to the large economic development gap between ASEAN countries and the uneven distribution of energy resources in the region, the formulation of renewable energy development policies needs to be adapted to local conditions and The Times. Taking Cambodia and other countries with relatively backward economy, low urbanization rate and lagging power development as an example, it is suggested that energy development should focus on opening up power investment and solving the problem of the population without electricity. For countries such as Malaysia that actively develop renewable energy and have a high degree of marketization, it is necessary to formulate innovative support policies, actively promote the affordable Internet access of renewable energy, and determine its feed-in tariff by bidding.
    The report highlights case studies in Vietnam and Indonesia. The report believes that Vietnam has great potential for renewable energy, and China can strengthen cooperation with it in power supply construction, technical cooperation, and grid interconnection, and should take wind power as a key investment direction. Indonesia, on the other hand, has a large number of islands and a good endowment of various renewable energy resources. China can strengthen cooperation with Indonesia in basic research, energy accessibility and power supply construction, and take the complementarity of multiple energy resources on islands as a key investment direction.
    Yang Fuqiang, senior advisor of the Natural Resources Defense Council (NRDC), pointed out that the renewable energy development potential of countries along the "Belt and Road" is huge, and the Chinese government and enterprises should give play to their advantages in new energy manufacturing, project design and construction, and actively help countries along the line develop renewable energy. Promoting the development of renewable energy in these countries will not only help reduce the adverse effects of climate change, protect the environment and people's health, accelerate the transformation of the energy structure, but also help China to build a good international image of the "Belt and Road".

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