Despite facing cost challenges, Chinese companies have successfully completed 199 renewable projects under the Belt & Road Initiative (BRI) since 2022, contributing to a total of over 300 power projects. A recent analysis by Wood Mackenzie revealed that wind, solar, and hydro projects accounted for 68% of the completed power initiatives, representing 37% of the overall installed capacity of 128 gigawatts (GW).
Over the past decade, renewables have steadily increased their share of new project capacity, rising from 19% a decade ago to 47% in 2022. However, the analysis identified cost inflation and over-optimistic financial assumptions as primary factors leading to the cancellation or shelving of 33 renewable projects, with solar projects accounting for 70% of the impacted initiatives.
The cancellations affected 12 GW of hydro, 2 GW of solar, and 0.4 GW of wind power projects. Pressures to reduce carbon emissions also played a role in the cancellation of coal projects.
Renewables now make up 57% of the 80 GW pipeline, with solar and wind projects anticipated to experience “large potential upside.” Wood Mackenzie predicts that Asia and Africa will continue to be the top two Belt & Road Initiative power markets.
Alex Whitworth, Vice President and Head of Asia Pacific Power and Renewables Research at Wood Mackenzie, noted, “The Belt & Road Initiative's influence on power markets is set to grow, with a further 80 GW already under construction or at the planning stage. China is changing its overall strategy, so we expect to see more focus on renewables and more direct investment than the bilateral lending that was more common in the early years of the Belt & Road Initiative.”