WhyitmakessenseforAfricatoturntoChineseinvestmentandknowhowinrenewableenergy
ByLinBoqiang
Chinahasmaturerenewableenergytechnologies,astrongrenewableenergyequipmentmanufacturingcapacityandamplefinancialstrength.SoAfricancountrieshavebeenseekingtoworkwithit.
China-Africaenergycooperationisoneofthemosttalked-abouttopicsoninternationalenergycooperationintheinternationalarena.Afteryearsofrapiddevelopment,Chinawillnowneedtogivecarefulconsiderationtothiscooperation.
TheInternationalEnergyAgencyhassaideconomicandsocialdevelopmentinSub-SaharanAfricadependsmainlyontheenergyindustry.Withrenewableenergy,Africanshavethechancetoaccessclean,affordableandadequatepower.
Windpowerandsolarpowerplantsareparticularlysuitablebecauseoftheirflexibilityandtheeasewithwhichtheycanberun.Theycanbelocatedindifferentareas,especiallyruralones,toformmicro-networksthatdistributeenergyreliably.ThismethodofpowergenerationisallthemoresuitedtoacontinentlikeAfrica,wherethedemandvarieswidelyfromregiontoregion.
WiththedemandfromEuropeandtheUnitedStatesfallingsharply,China鈥檚renewableenergyequipmentmanufacturingindustryisfacinganexcesscapacity.NowthattheChineseGovernmentisdevelopingtheSilkRoadEconomicBeltandthe21stCenturyMaritimeSilkRoadInitiative,itmakessenseforChinatoplayaroleinproducinganddistributingrenewableenergyinAfricaandotheremergingmarketsalongtheroute.
DuringtheFourthMinisterialConferenceoftheForumonChina-AfricaCooperation(FOCAC)in2009,theChineseGovernmentpledgedahugeincreaseininvestmentinrenewableenergysourcesandhelpwith100small-scale,clean-energyprojectsinAfrica.In2012,theFifthFOCACMinisterialConferenceproposedthatChinacontinuetohelpAfricancountriesbuilduptheircapacityforclimatechangeresilience.
Morethan20Africancountriesnowhaveaformalpolicyforharnessingrenewableenergy,andsomehavedevelopedlong-termplans,suchasKenya.Kenya鈥檚developmentblueprintVision2030hasenergyasafocalpoint.However,arenewableenergyindustryonthecontinentneedsfarmorethaninternaldriveanddeterminationtosurviveandprosper.Italsoneedstechnologytransferandinternationalfinancialsupport.
Chinahasmaturerenewableenergytechnologies,astrongrenewableenergyequipmentmanufacturingcapacityandamplefinancialstrength.SoAfricancountrieshavebeenseekingtoworkwithit.
YetChinesebusinesses鈥檖articipationindevelopingrenewableenergyinAfricaisstillinitsinfancy.Atthemoment,theyarefocusingonrenewableenergyprojectsandexportingequipment.However,infuturetheywillplayamoreactiveroleasinvestors,projectdevelopersandpartnersinthesolar,windandgeothermalenergysector.
FormoreinvolvementinAfrica鈥檚renewableenergysector,theywillhavetoovercomeseveralchallenges.
First,theirinvestmentwillneedtobesafeguardedbyariskcontrolmechanism.
Second,theyshouldstriveforlocalization.Duetoalackofknowledgeoflocallawsandbusinessculture,thoseattemptingcross-borderinvestmentandrunningcross-borderbusinessesoftenfailtointegrate.Itisessentialthatstepsbetakentoensurethoroughlocalization,andthatthisprocesstakesplacequickly.
Third,ChineseentitiesenteringtherenewableenergyfieldinAfricashouldbemoreactivelyinvolvedinlocaleconomicandsocialdevelopmentwork.CA
(TheauthorisdirectorofChinaCenterforEnergyEconomicsResearch,XiamenUniversity)