By Lin Boqiang
China has mature renewable energy technologies, a strong renewable energy equipment manufacturing capacity and ample financial strength. So African countries have been seeking to work with it.
China-Africa energy cooperation is one of the most talked-about topics on international energy cooperation in the international arena. After years of rapid development, China will now need to give careful consideration to this cooperation.
The International Energy Agency has said economic and social development in Sub-Saharan Africa depends mainly on the energy industry. With renewable energy, Africans have the chance to access clean, affordable and adequate power.
Wind power and solar power plants are particularly suitable because of their flexibility and the ease with which they can be run. They can be located in different areas, especially rural ones, to form micro-networks that distribute energy reliably. This method of power generation is all the more suited to a continent like Africa, where the demand varies widely from region to region.
With the demand from Europe and the United States falling sharply, China’s renewable energy equipment manufacturing industry is facing an excess capacity. Now that the Chinese Government is developing the Silk Road Economic Belt and the 21st Century Maritime Silk Road Initiative, it makes sense for China to play a role in producing and distributing renewable energy in Africa and other emerging markets along the route.
During the Fourth Ministerial Conference of the Forum on China-Africa Cooperation (FOCAC) in 2009, the Chinese Government pledged a huge increase in investment in renewable energy sources and help with 100 small-scale, clean-energy projects in Africa. In 2012, the Fifth FOCAC Ministerial Conference proposed that China continue to help African countries build up their capacity for climate change resilience.
More than 20 African countries now have a formal policy for harnessing renewable energy, and some have developed long-term plans, such as Kenya. Kenya’s development blueprint Vision 2030 has energy as a focal point. However, a renewable energy industry on the continent needs far more than internal drive and determination to survive and prosper. It also needs technology transfer and international financial support.
China has mature renewable energy technologies, a strong renewable energy equipment manufacturing capacity and ample financial strength. So African countries have been seeking to work with it.
Yet Chinese businesses’ participation in developing renewable energy in Africa is still in its infancy. At the moment, they are focusing on renewable energy projects and exporting equipment. However, in future they will play a more active role as investors, project developers and partners in the solar, wind and geothermal energy sector.
For more involvement in Africa’s renewable energy sector, they will have to overcome several challenges.
First, their investment will need to be safeguarded by a risk control mechanism.
Second, they should strive for localization. Due to a lack of knowledge of local laws and business culture, those attempting cross-border investment and running cross-border businesses often fail to integrate. It is essential that steps be taken to ensure thorough localization, and that this process takes place quickly.
Third, Chinese entities entering the renewable energy field in Africa should be more actively involved in local economic and social development work. CA
(The author is director of China Center for Energy Economics Research, Xiamen University)