It is no secret to anyone working in solar that China is the center of the global solar industry, as well as its largest market. But this is just the beginning. A new report by the Institute for Energy Economics and Financial Analysis (IEEFA) documents how China is increasingly coming to dominate not only solar PV, but the lithium-ion battery value chain and clean energy investment globally.
China’s Global Renewable Energy Expansion notes that the nation invested $103 billion in non-hydro renewable energy and associated low-emissions technology in 2015, two and half times that of its nearest competitor, the United States.
China is not only investing in domestic clean energy projects, but increasingly overseas as well. In the report IEEFA documents eleven massive deals through which Chinese firms invested $32 billion in overseas clean energy transactions in 2016 alone, including Trina Solar’s purchase of Solland’s Dutch cell factory and GCL’s purchase of a majority stake in Australian solar distributor One Stop Warehouse.
In the report IEEFA also notes increasing Chinese dominance of wind and solar manufacturing, with Chinese companies making up five of the world’s six largest PV makers. Additionally it documents Chinese presence in hydropower and nuclear power – but particularly revealing is the section on lithium-ion batteries.
The report finds that China is taking over large parts of the lithium-ion value chain, with China’s Tianqi Lithium becoming the world’s largest lithium-ion manufacturer after buying up its rivals, and BYD and CATL challenging Tesla for leadership of the lithium-ion battery and electric vehicle industries.
“Chinese leadership and control of the global lithium sector is developing along the lines of the rare-element mining and processing sector, which is now 90% and 72% controlled respectively by Chinese enterprises after the financial collapse of Molycorp US in 2015,” notes the report.
IEEFA notes another detail which is not lost on Western PV makers – that China’s growing investment in wind and solar manufacturing is sharply driving down costs. “The extent of China’s domestic investment in renewables has surpassed all expectations, with the resulting technology development and economies of scale driving down costs to the point where renewables are exceeding grid parity in an increasing number of market segments” declares the report’s introduction.
The organization, which is based in the “rust belt” city of Cleveland, Ohio, also slips in a note of warning for the United States, alluding to danger of potential neglect of this growth sector by President-Elect Donald Trump and the Republican Congress. “A change in leadership in the U.S. is likely to widen China’s global leadership in industries of the future, building China’s dominance in these sectors in terms of technology, investment, manufacturing and employment,” warns IEEFA.