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China leading in clean energy spending

Mar 25, 2010 - Elaine Kurtenbach - The Assocoated Press

China has taken the lead in investments in clean energy, spending nearly double what the U.S. did in 2009, as it ramps up projects in both renewable and traditional energy, a report said Thursday.

China's investment and financing for clean energy rose to $34.6 billion in 2009, out of $162 billion invested globally, according to the report by the nonprofit Pew Charitable Trusts. U.S. spending ranked second, at $18.6 billion, with European nations also recording strong growth.

The report comes as China is clinching a slew of energy and resource-related deals meant to help ensure access to the commodities needed to keep its fast-growing economy booming:

- On Wednesday, China's offshore oil and gas company CNOOC agreed to buy 3.6 million tons of liquefied natural gas a year, for 20 years, from an Australian energy project operated by BG Group PLC. Though a value for the deal was not released, Australian media reports estimated its worth at 80 billion Australian dollars ($73 billion) - the country's biggest single company-to-company contract ever.

- Just days before, CNOOC announced plans for a $3.1 billion joint-venture with Bridas Energy Holdings Ltd., a major Argentine energy firm.

- On Tuesday, Royal Dutch Shell PLC said it plans to explore for natural gas with China National Petroleum Corp. in southwestern China's Sichuan province. That followed news that Arrow Energy Ltd., an owner of gas assets in Australia, had accepted a joint takeover bid from Shell and PetroChina worth $3.15 billion.

- Over the weekend, China signed 15 deals with Russia worth $1.6 billion.

Natural gas is cleaner than the coal that now fuels about three-quarters of China's electricity generation. But Beijing also is throwing massive resources into nurturing renewable energy, both to counter environmental damage from fossil fuel emissions and to curb its soaring reliance on imports.

The U.S. still leads the world in installed renewable energy, with 52.2 gigawatts of wind, small hydroelectric, biomass and waste generating capacity, the Pew report said.

But China is quickly closing the gap, as a doubling in wind energy capacity alone boosted its own installed renewable energy capacity to 49.7 gigawatts in 2009. Germany trails with 30.9 gigawatts, the report said.