The World Bank has approved a $300 million loan for China's Renewable Energy and Battery Storage Promotion Project.
This aid will enable the country to increase the integration and utilisation of renewable energy by deploying battery storage systems at scale.
The World Bank noted that despite having the largest installed electricity generation capacity of wind and solar power, China is unable to operate and utilise these resources fully due to technical constraints in the transmission networks and gaps in the regulatory framework for electricity trade between provinces.
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This project will help address these constraints and support China’s overarching energy transition goals.
These include a shift away from coal and increasing the share of non-fossil fuels in the primary energy consumption from the current 14.3% to 20% by 2030, and to over 50% by 2050.
“This project will help accelerate the on-going clean energy transition in China and contribute to the country’s emission reduction targets,” said Martin Raiser, World Bank country director for China.
Raiser continued: “By providing financing for battery storage and distributed renewable energy applications, the project will reduce curtailment of renewable energy capacity and thus encourage further investments into changing China’s energy mix. Parallel technical assistance will help improve the policy and regulatory framework for green energy technologies, thereby reducing risks and encouraging private investment.”
The Renewable Energy and Battery Storage Promotion Project will be implemented by Hua Xia Bank, a publicly listed commercial bank in China.
Hua Xia Bank will provide co-financing of at least $450 million to achieve the development goals of the project.
Technical assistance for policy and regulatory reforms, shaping appropriate technology and safety standards, and developing institutional capabilities will be financed by the Global Environmental Facility (GEF) and the Energy Sector Management Assistance Program (ESMAP).
Peng Ximing, World Bank Senior Energy Specialist and project team leader, commented: “Hua Xia Bank has been a strong partner of the World Bank in expanding commercial financing for, and wider adoption of, clean energy technologies in China.
“We look forward to working with them to support small and medium-enterprises to implement financially and technically well-structured battery storage projects with due regard to environmental and safety considerations.”