Chinese investors continue to build knowledge of the wind sector through European investment.
China has traditionally focused more on developing coal and hydroelectric power, which provide relatively constant output, instead of wind and solar, which depend on whether conditions. However, recently, government-owned power producers have begun making significant investments in large wind projects in Europe, indicating a potential shift in the breadth of China’s commitment to an energy policy that is both global and renewable.
In fact, a recent Institute for Energy Economics and Financial Analysis (IEFA) report has shown that China now invests more in European wind projects than in Australian projects, which in recent years had received substantial amounts of money from China. Notably, Chinese private and state sectors invested US$6.8 billion in European wind projects from 2011 to 2017 compared with US$5 billion in Australia.
According to Simon Nicholas, author of the IEFA report: “China is now a driver of the European energy transformation, and its international leadership in low emissions sectors of the future are entirely aligned with efforts to increase China’s global economic influence”… “While Chinese foreign renewable energy investments were boosted by the launch five years ago of its Belt and Road Initiative, its foreign renewable energy investment now extends well beyond that framework.” As an example, the UK offshore market is predicted to double by 2030, and currently represents Europe’s biggest offshore wind market, China’s offshore wind capacity is predicted to overtake the UK’s by 2022.
With China’s extensive global investment, the country should be well-placed to accumulate wind power knowledge. China likely will continue to build on its commitment to renewable energy, increasing the country’s US$44 billion investment in clean energy projects globally.
Latham will continue to monitor China’s wind policy and the country’s investment in foreign wind projects.
This blog was prepared with the assistance of Olivia Featherstone in the London office of Latham & Watkins.