Energy

To what extent can green infrastructure investment mitigate China’s clean-energy overcapacity?

China’s green industrial strategy has outpaced demand, leaving renewables firms under strain and grid expansion as the key test of market rebalancing.

China’s industrial policies have made it the global leader in the manufacturing of solar panels, wind turbines and other renewable technologies, but at the cost of severe overcapacity that is now compressing margins across the entire sector. This paper evaluates greater investment in power infrastructure as a potential solution to stimulate energy demand, reduce curtailment and alleviate the renewable tech manufacturing overcapacity problem. Using scenario analysis, we show that grid expansion provides meaningful near-term demand relief, though supply-side consolidation remains necessary to restore durable market equilibrium.

Source : Bruegel

GLOBAL BUSINESS AND FINANCE MAGAZINE

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