China: China Passes US In CleanTech Spend


By Denise Bedell


High energy: Government targets boost windpower

With strong government backing and clear goals for increased capacity development, China is fast surpassing its counterparts in the West, including the US and Germany, in building and supporting cleantech investment. In fact, prospects for cleantech investment in Asia are much more favorable than in either Europe or the US, according to Stephan Dolezalek, managing director and group leader for cleantech at VantagePoint Venture Partners. Activity in the US in particular is at a low ebb, Dolezalek says. “Except for established companies with established technologies getting a few projects done, there isn’t much going on in the US.”

In a yearly survey of the appeal of global markets for cleantech investment released by consultancy Ernst & Young, China broke through a multiyear lead by the US—and surpassed Germany, which continues to dominate the solar market—to take top spot as the most attractive country for investment. Although Europe benefits from a clear and ambitious green energy law, with an EU directive requiring that 20% of the region’s energy come from renewable sources by 2020, China has the advantage of tight bonds between state-owned utilities, banks and the domestic energy grid. China also has its own set of renewable energy targets: China’s National Energy Administration, established in 2008 with a remit to diversify China’s energy mix, set targets to grow wind capacity in six provinces by 2020 to 127.5GW—a target China is well on the way to meeting.

Development of the global renewable energy markets continues to suffer from the need for stronger incentives to encourage investment. There are big gaps in late-stage equity capital available for projects, and the renewable energy markets as a whole still do not offer the steady returns necessary to draw significant interest from the global investment community. Investor confidence in receiving reliable returns is essential to move wind technology development beyond a boutique or CSR (corporate social responsibility) investment play and bring in the kind of investment that would change the energy landscape forever.