China shifts to renewable energy within Belt and Road Initiative

After ten years of helping other countries develop projects to generate huge amounts of electricity, China’s Belt and Road Initiative is focusing more on the transition to renewable energy, according to a new study by Wood Mackenzie.

Renewable energy sources account for 57% of overseas development projects currently planned or under construction, compared to 37% of production capacity built over the past decade, the study says.

This shift coincided with declining prices for wind turbines and solar panels and with increased pressure from governments to move away from polluting fossil fuels.

“China is changing its overall strategy, so we expect to see more focus on renewables and more direct investment rather than bilateral lending that was more common during the early years of the Belt and Road Initiative,” according to a new study by Wood Mackenzie.

Beijing’s efforts to promote clean energy sources continue, with solar, wind, nuclear, and hydroelectric facilities expected this year to generate enough electricity to supply the whole of France, according to a report issued by the Center for Research on Energy and Clean Air.

The Wood Mackenzie study identified 128 GW of electricity generation capacity, representing about $200 billion in investments completed by 2023 through the Belt and Road Initiative, announced by Chinese President Xi Jinping in 2013.

Another 80 GWs are currently planned or under development, mostly in Asia, according to the company.

Projects with a production capacity of 54 GW were suspended or cancelled, either due to policy changes or trade risks such as inflated costs or optimistic financial assumptions.

About 61% of canceled projects relate to coal, after Chinese President Xi Jinping imposed a ban on new overseas projects dependent on fossil fuels in 2021.