One in every of China’s most notable areas of management is in photo voltaic vitality. Picture by Reuters.
Within the fast-evolving race towards a decarbonised future, one nation is leaving a lot of the world behind, China. Based on the most recent World Vitality Funding 2025 report from the Worldwide Vitality Company (IEA), China is now investing virtually as a lot in vitality as america and the European Union mixed. And what’s extra, the most important share of that funding goes into clear, renewable applied sciences.
The IEA’s report, printed final week, estimates that world vitality funding will attain $3.3 trillion in 2025, a modest 2% enhance in comparison with 2024. Of this colossal sum, roughly $2.2 trillion is earmarked for clear vitality applied sciences, marking a brand new document in world climate-aligned funding. These embody photo voltaic photovoltaics, wind, nuclear, battery storage, improved grid infrastructure, and electrification measures similar to electrical automobiles and warmth pumps.
China’s outsized position
Whereas many nations have pledged formidable targets to succeed in net-zero emissions within the coming many years, China is already placing its cash the place its mouth is. The IEA stories that China alone accounts for almost one-third of all world funding in clear vitality, up from only a quarter a decade in the past.
To place it in perspective, China’s vitality funding footprint in 2025 is anticipated to rival the mixed clear vitality funding of each america and the European Union. This staggering determine not solely underscores China’s dominant industrial position within the world vitality transition, but additionally highlights a rising East-West divide in infrastructure and vitality technique.
Based on Spanish outlet Energías Renovables, which coated the IEA’s report this week, China is closely targeted on increasing its photo voltaic PV manufacturing capability, battery manufacturing, and electrical grid enhancements, key pillars for attaining deep decarbonisation.
Photo voltaic supremacy, storage ambition
One in every of China’s most notable areas of management is in photo voltaic vitality. The IEA notes that Chinese language firms are accountable for over 80% of the world’s photo voltaic panel manufacturing, a proven fact that makes its home investments in photo voltaic infrastructure doubly important. Not solely is China putting in extra panels than anybody else, it’s additionally producing many of the ones used globally.
Battery manufacturing and storage infrastructure are additionally receiving a serious enhance, with Beijing seeing long-duration storage as important to a secure and resilient renewable-powered grid. The synergy between photo voltaic deployment and storage capability is essential for mitigating the intermittency challenges posed by renewable vitality.
A powerful grid — however not sturdy sufficient
Regardless of this spectacular surge in renewables and storage, the IEA warns that China, like many nations, isn’t investing quick sufficient in its electrical grids. Whereas photo voltaic and wind investments are booming, outdated or inadequate grid capability might quickly grow to be a bottleneck, stopping all that inexperienced vitality from reaching customers or being correctly balanced throughout the nation.
The report states that world funding in grids must double by 2030 to maintain tempo with clear vitality targets. In China’s case, its community infrastructure dangers falling behind its technology capability, doubtlessly straining the system and rising vulnerability to outages or curtailment.
Geopolitical implications
China’s huge vitality spending spree isn’t with out world penalties. As Western nations attempt to cut back emissions and meet their local weather commitments, China’s dominance in clear vitality tech might create new dependencies, very like how Europe as soon as relied closely on Russian fuel. Whether or not in photo voltaic panels, batteries, or uncommon earth parts, China is more and more seen as an vitality superpower of the inexperienced transition.
This shift additionally raises questions on long-term vitality safety and technological sovereignty. Europe and the US have launched multi-billion-dollar initiatives, such because the EU’s Inexperienced Deal Industrial Plan and the US Inflation Discount Act, to convey clear tech manufacturing nearer to house. However because the IEA’s information exhibits, China stays a number of steps forward in each scale and pace.
Trying forward
The excellent news? International momentum is constructing. With $2.2 trillion going into clear vitality this yr, 2025 will mark a historic milestone. Funding in electrical energy technology, grids, and storage now surpasses fossil gas funding by 50%, a powerful sign that the transition isn’t solely underway, it’s accelerating.
However the tempo should quicken. The IEA warns that, with out bolder coverage assist and quicker grid upgrades, many nations could fall in need of their local weather targets. China’s instance exhibits what’s doable when funding aligns with infrastructure and industrial technique. Whether or not others can observe go well with, and whether or not they need to emulate China’s centralised strategy stays to be seen.
For now, although, one factor is obvious: if clear vitality is the engine of tomorrow’s financial system, China is already sitting within the driver’s seat.