WASHINGTON – Chinese investments in renewable energy projects have reached record levels worldwide. And U.S. energy experts predict more money will pour into the U.S. clean energy sector in the near future, although the investments have lagged recently.
In 2014 alone, China saw more than $83 billion flow into renewable energy. That was up 39 percent from the previous year, and more than double of what U.S. invested, a United Nations Environment Programme report says.
The current state of Chinese investment in America’s green economy was a hot topic at a Wilson Center panel on Thursday in Washington.
Chinese investors have actually contributed less to clean energy projects in the United States in recent years, according to American Enterprise Institute, a Washington think tank.
However, the Chinese have been “lifesavers” for some projects over the past eight years they will be there in the future, said Melanie Hart, director of China policy at the Center for American Progress.
“U.S. clean energy started to take off right after the financial crisis. So when clean energy firms tried to get off the ground and seek financial support, it became really challenging,” Hart said at the panel.
When venture capital, hedge funds and state banks refused to lend easy money to those American companies due to the high risk of alternative energy technologies, Chinese banks and companies stepped in and “created lifelines of financing,” Hart added.
It’s still true even with the U.S. economy slowly recovering from the Great Recession. “Now the U.S. investors see the competitiveness of clean energy and they are bullish on this, it’s still hard for them to finance some breakthrough technologies,” Hart said. “But Chinese investors are still willing to support.”
The Wilson Center, a group with expertise in foreign policy and environmental issues, said data it aggregated show Chinese clean energy investment has created a modest 6,000 jobs in U.S. since 2006.
For instance, Goldwind Science and Technology Co., a wind turbine manufacturer based in Xinjiang Province, invested $200 million in 2010 in the Shady Oaks wind farm project in Lee County, Illinois, providing around 300 local jobs.
According to a report released by the Washington-based Center for American Progress, more than half of 65 U.S. energy projects currently funded by Chinese direct investments are clean energy – including wind, solar and electric vehicles.
To further assist the US to pursue a clean energy economy, more investment from China is critical, Hart emphasized.
Chinese private energy firms accounted for 70 percent of Chinese direct investment in the U.S. clean energy sector in 2013. But many were drawn back to China’s local markets to produce coal substitutes, said Derek Scissors, resident scholar at the American Enterprise Institute. But he predicts the money will come back when China “overshoots” its alternative energy production capacity domestically.
China’s low investment in U.S. clean energy “will change because China is shifting its energy mix at home and they are going to build up too much capacity in alternative energy, like they always do,” Scissors said. “They will export the capacity overseas then. At that time, we will see more investments here on clean energy.”
“It is obvious to happen,” he said. “The question is just when.”