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In a major boost for renewable energy, the People’s Bank of China (PBOC) has announced that it will increase financial support for wind and solar power development to meet carbon emissions targets.
Citing the cash crunch that is currently hindering renewable energy companies, new favorable financing measures will include preferential subsidies for promising wind and solar companies, increased credit and loan support, and arrangements with financial institutions for loan extensions, refinancing for adjustments in cases where solid clean energy companies are having difficulty with short-term repayments, Reuters reported.
Part of the end game is to increase international investment in China’s clean energy companies, and the PBOC’s latest announcement seems set on making these investments more attractive.
According to a Wood Mackenzie report, China will need to invest $6.4 trillion in new power generation capacity to reach its 2060 carbon-neutral goal. Additionally, it will need to achieve a 75% increase in electricity demand to replace fossil fuels to meet that goal. By 2030, China hopes to achieve peak carbon emissions.
In December, the PBOC outlined five measures for green finance, including setting higher standards, introducing mandatory requirements for financial institutions to disclose information related to the environment, strengthening capacity to analyze and manage climate-related risk, and streamlining access for international investors in the country’s green finance market, according to PinsentMasons.
China is now dominating solar, boasting eight of the Top 10 solar companies in the world, according to Forbes. That’s because Chinese manufacturers now hold a near-monopoly position in the solar supply chain and continue to rain huge subsidies on solar and wind efforts.
Forbes cited Washington-based Coalition for a Prosperous America’s chief economist, Jeff Ferry, as saying that “Beijing’s goal is dominance of this industry”, noting that China is bulldozing forward with massive subsidies for solar industry expansion.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.