China best country for clean energy investment, study finds

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New analysis gathered collaboratively by Climatescope, Bloomberg New Energy Finance and the U.K. Department for International Development (DFID) has concluded that China is the country most receptive to clean energy technology investment.

Despite being the world’s leading carbon emissions culprit, investment conditions in China are favorable to clean energy technologies, and the country is the world’s largest investor in green energy, according to the report.

As demand for energy rises across the country, investment in both traditional fossil fuels and clean energy technologies is increasing at a similar pace – driving a revolution in solar and wind energy that, paradoxically, runs parallel to increased consumption of coal and gas.

Between 2008 and 2013, China’s annual energy consumption rose 51%, finds the report. Over the same period in the U.S., demand for energy increased by a mere 6.8%. In India, that pace of development was even higher at 56%, but India’s smaller population means China is top dog for clean-tech investment opportunity.

The Climatescope report finds that China is now the world’s leading producer of solar and wind power equipment, with the domestic solar industry in particular booming since 2013 when the industry switched from export-focused to demand-driven.

This pivot was also a result of anti-dumping (AD) and countervailing duties (CVD) imposed by the U.S. government and the EU in response to state-backed supply that saturated the global market. In response, the report states that China "has since taken major strides to improve its domestic policy framework".

In September, China’s National Energy Administration (NEA) urged its solar developers to pursue distributed generation (DG) installations across the country, pledging finance and process application assistance to developers, and leaning on state-owned banks to back sub-20 MW installations.

China hopes to install as much as 8 GW of DG solar PV in 2014, complementing a wider target of around 13 GW of new PV capacity for the year.

According to the Climatescope report, China’s energy consumption will peak between 2035 and 2040. After that period, large developing nations such as India and Indonesia will take over the mantle as the world’s energy kingpins, demanding greater investment in new technologies.

Currently, the report finds that Brazil is the second-most attractive investment market for clean-tech, followed by South Africa, India, Chile and Uruguay.