China is becoming increasingly prominent in the construction of new energy projects all over the world, largely promoted by the Belt and Road Initiative (BRI). Last month, the latest of these projects, the financing of a 100 megawatt (MW) wind power project in Kazakhstan, was signed between multiple Chinese and international companies and financial institutions.
Launched in 2019, and once put into full operation, the project is estimated to generate 350 million kilowatt-hours of electricity per year, which will effectively help to solve the current shortage of electricity in southern Kazakhstan, and play a key role in the decarbonization of Kazakhstan's energy system.
The project in Kazakhstan is just a small part of the robust development of Chinese new energy projects under the BRI. China Power, one of the main operators of oversea new energy projects, has installed power generators overseas with a total capacity of 4.85 million kilowatts, and with assets exceeding 60 billion yuan ($9.08 billion).
The expansion of new energy projects in countries along the BRI route has brought enormous benefits to local businesses and the economic environment. According to Goldwind, a Chinese company specializing in clean energy and energy conservation, its projects played a crucial part in stabilizing energy provision in parts of the world.
In Brazil, before Goldwind's local project was in place, the Brazilian wind power operator Energimp owned more than 180 units that were out of order, and more than 75 percent of the company's generators and fans were damaged between 2015 and 2017. The Chinese company worked with local experts and teams to provide support for the Brazilian company, and by the end of 2019, 84 generator units had been repaired and the power provision significantly stabilized.
According to the Power Construction Corporation of China, the new energy projects that Chinese companies are launching overseas, especially in developing countries, are bringing in not only economic opportunity, but also a chance to balance development and environmental protection.
In Cambodia, during the construction of the Ganzai Hydropower Station, the Power Construction Corporation of China cooperated with the Kampot provincial government and released over 60,000 endangered fish and shrimp seedlings in the upstream and downstream of the reservoir in an effort to save local biodiversity. The company also planted more than 1,600 trees on hillsides, riversides, and roadsides to conserve the local environment.
Chinese companies are also putting efforts into preserving local wildlife. In Uganda, the Karuma Hydropower Project sets a shining example for environmentally friendly, green and renewable projects. The station adopts no high dam or large reservoir, minimizing the impact on the ecological environment, as well as protecting local wildlife living on the downstream of the station, such as hippos, crocodiles, pythons and elephants.
"The fast expansion of Chinese new energy companies' activities overseas is attributable to China's global supply chain advantage in the sector," the Power Construction Corporation of China told the Global Times.
"China has the advantage, especially in the field of photovoltaics (converting light into electricity). China has more than 70 percent of the global market share of silicon materials including silicon wafers, solar cells, and modules, all of which are essential in the construction of new energy projects," the company said.
"This has enabled companies like us to provide new energy solution to countries under the BRI," the company added.
In the first three quarters of 2020, the value of the Power Construction Corporation of China's overseas new energy contracts increased by 160.8 percent year-on-year, setting a record high, the company told the Global Times without giving details of the specific amount. Companies such as the Power Construction Corporation of China have played a leading role in the new energy construction of countries along the BRI such as Vietnam, Pakistan, Ukraine and Kazakhstan.
Chinese companies' development of new energy projects overseas is not without its obstacles, however. For example, challenges of management in local cultures, as well as the technical issues of plugging Chinese infrastructure into the local network.
"It is difficult to control the project's construction costs given the different difficulty levels in different places," Goldwind told the Global Times, "Local policies and stability, as well as the strength of the power grid and the capabilities and experience of the local construction teams, can all be restrictive factors for Chinese companies planning to go overseas."
However, the company is still confident in the overall outlook of Chinese companies' development prospects in the international market under BRI, given the huge potential of the new energy sector.
According to estimates by the World Energy Council, if reached to its full potential, the theoretical output of global clean energy is equivalent to the output of 45 trillion tons of standard coal each year, far exceeding the world's current annual energy consumption of about 20 billion tons of standard coal.
"Clean energy has great potential to better meet global energy consumption and decarbonize the current energy structure," Goldwind explained to the Global Times.
"There are a lot of Asian and African countries along the BRI that have huge potential for cooperation in the future. China has good experience when it comes to the transformation and upgrading of the energy industry. It can and will help those countries break free from the dilemma between economic development and sustainability."