37658 GEF Global Action onRenewable Energy THE CHINA­GEF PARTNERSHIP TO INCREASE USE OF RENEWABLE ENERGY Around the world, the transition to renewable energy systems has begun. From private investors to governments to multilateral assistance agen- cies, renewable energy is receiving increasing investment shares and attention. China's experi- ence provides a good example. Chinese leaders recognized early on that acceler- ating the transition to efficient and renewable energy would bring enormous economic, social, and environmental benefits. They realized that the Stowers/Panos transition was inevitable, not because fossil fuel Chris supplies would run out, but because the relative costs and risks of using them would continue to national government, the private sector, and increase. In contrast, wind, sun, and water are other actors. free. Free, that is, except for the ways and means of efficiently converting them to energy. A leading example is China's Renewable Energy Scale-Up program. With $41.6 million in grants The potential for renewable energy in developing from the GEF, outside loans and grants totaling countries is challenged by several factors, not the $129 million, and significant national investment, least of which are the up-front costs of installing China is working to remove barriers to the intro- equipment and the limited resources of the duction of cost-effective renewables; reduce the people who need it. Certainly, this is the case in cost and improve the performance of small China. Chinese leaders, well aware of the com- hydro, wind, and selected biomass technologies; plexity of a transition to renewable energy, and increase the market penetration of renew- turned to the Global Environment Facility (GEF) ables enough to make a sizable cut--187 metric for assistance. tons of carbon--in greenhouse gas emissions. Through the GEF, China is developing new China's 10-year program sets ambitious targets energy programs and approaches that go beyond for investment and government commitment to one-time, stand-alone projects. They seek to have a supportive policy environment. Among other a broader, more significant impact--nothing less things, it envisions the implementation of a than structural change at the national level. From national policy framework to develop large-scale the beginning, these strategies build in project commercial markets in renewable energy. This components for large-scale and long-term repli- framework requires that a share of electricity cation, monitoring and evaluation, and stake- supply be met from renewable resources as part holder involvement in partnerships with the of a mandated market. Chinese leaders expect the costs of renewable reduced, the clinics become more self-sufficient energy to decline and the economic and environ- and can re-channel income toward improving mental benefits (both local and global) to acceler- health services. The target is to rehabilitate ate. The program also supports improvements in from 2,000 to 4,000 clinics per year in 10 the quality and performance of equipment and provinces throughout the country. The passive strengthens the capability of service industries to solar health clinics are designed by local vil- respond to increased market demand. lagers, who also volunteer their labor for con- struction and maintenance. China's renewable energy portfolio includes a number of other GEF projects. For example, a The GEF is also sponsoring projects to help $5.8 million GEF grant is supporting the first strengthen China's capacity to work with renew- phase of a project to reduce the cost of fuel cell able energy, to undertake solar and wind energy buses in Beijing and Shanghai. Buses are a major assessments, and to expand methane recovery source of greenhouse gas emissions as well as and use. localized air pollution in China. Fuel cell­powered vehicles offer the potential for pollution-free INCREASED USE OF RENEWABLE transportation. In collaboration with both the ENERGY IN CHINA national and local governments, GEF is helping public transit companies obtain fuel cell buses for About 50 million households are served by the two cities and operate them over a total dis- small hydro village-scale mini-grids. tance of 1.6 million kilometers. The initiative includes significant private sector involvement About 10 million households are served by and is designed to sustain the effort beyond the solar hot water heaters. duration of the GEF project. Chinese officials and project designers anticipate that lessons learned China's latest five-year plan calls for a five- from the project can be used to develop similar fold increase in wind power, to 1,500 initiatives in other cities and countries. megawatts, by 2005. The plan also pro- poses requiring that 5 percent of all new Another GEF project is helping rural health clin- power generation come from renewables, ics switch from coal-fired electricity to solar and which could mean an additional 20,000 photovoltaic (PV) systems, at a 30 percent lower megawatts of power by 2010. cost. As the health delivery expenses are FOR MORE INFORMATION Clare Fleming Global Environment Facility 1818 H Street NW Washington DC 20433 USA Tel: 202-473-0508 Fax: 202-522-3240 www.theGEF.org November 2005