There’s One Born Every Minute

At Motley Fool Maxx Chatsko explains China’s actual energy plans:

China is investing tens of billions of dollars every year into renewable energy deployment and supply chains. Its motivations are simple: The country wants to improve its environmental footprint and air quality, develop a leadership position in global markets, and increase national security and energy independence (you don’t have to import renewable energy).

These plans are also longer-term than many headlines would lead investors to believe. For instance, China isn’t using renewable energy to immediately replace coal-fired power plants, which supplied 72% of the country’s electricity in 2015 — more than double the share of coal in the electric grids of the United States.

That’s because renewable energy is one of the least efficient ways to go about replacing coal consumption in a short period of time. Instead, China is hurriedly building natural gas and liquefied natural gas (LNG) import infrastructure to replace coal in the near-term. In fact, the country is single-handedly shifting global markets, having imported 58% more LNG in the first four months of 2018 than in the year-ago period, with American supply playing a central role. Energy investors shouldn’t overlook the opportunities this creates.

but I don’t think he quite appreciates what’s really going on. China wants to dominate and control the market for products used in producing solar and wind power. They’re happy to accept the subsidies that Western governments are paying to implement those technologies.

For their own use they’re deploying natural gas. There’s a clear economic case. Will they go to “renewables” in the future? It could happen. When there’s a clear economic case for it.

1 comment… add one
  • Gray Shambler Link

    ” China wants to dominate and control the market for products used in producing solar and wind power. They’re happy to accept the subsidies that Western governments are paying to implement those technologies.”

    Maybe that’s their plan, but their plan may end up being financial misallocation due to lack of market input. Central planners are no match for the market.

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