China’s green tech sector just goes from strength to strength writes Ken Hickson.

China has passed the US this year to become the world’s biggest energy consumer, according to new data from the International Energy Agency, which reflects both China’s decades-long burst of economic growth and its rapidly expanding clout as an industrial giant.
China is also rapidly rising as a world leader in investment and manufacturing in the clean tech sector.

While Australia might not figure large in global terms for investment in clean tech, it is seen as a place of innovation and inventiveness. The quality of its research and development in clean tech makes it ideally placed to both attract investment in this sector but also to contribute to developments in massive manufacturing and consuming markets like China. (Remember that the solar giant Suntech had its beginnings in Australia).

Global investment in clean technology will rise 35 percent this year, according to a report published by research firm Datamonitor. New Energy Finance predicted global clean tech investment in 2010 would reach US$160 billion, compared with $125 billion in 2009

The Cleantech Group says investment in this sector fell in 2009, but it fared better than many other industries and has overtaken biotech and IT as the largest venture capital investment categories.

While US dominance of the sector slipped to 62 percent of investments against 72 percent in 2009, China saw its share of global clean tech investment rise to 6 percent.
China also boasted the largest Merger and Acquisition deals (in clean tech/energy) over the past year, with 23 transactions worth a total of US$5.4 billion.

China has initiated new laws that require its power grids to buy power from renewable plants and wind farms, or face very stiff fines. This will result in even more investment in the renewable energy sector.

There is little doubt that China is rapidly becoming a leader in the new green industrial revolution, following the example of Germany, which has also managed to maintain a strong position in manufacturing (note its automobile industry leadership).

In the global Clean Tech Survey by Cleantech Investor and Norton Rose, the US, followed by China, are seen as the countries that will benefit most from private equity driven investment in clean tech. The same survey noted that energy efficiency is the sub-sector expected to attract the most money in the immediate short term, with wind generation and solar next on the list.
China will also find that it has increasing opportunities to invest in clean tech beyond its borders, and Australia is crying out for outside investment in a sector heavily represented by innovation and energy, but lacking sufficient Government recognition and incentives. ■

What do we mean by Cleantech?

Energy generation – solar, wind, geothermal, biomass, hydro, wave & tidal

Energy Efficiency – building efficiency, smart grids, waste heat recovery

Energy storage – transport & stationary applications

Waste recycling – organic matter, plastics & electronics

Emissions reduction – trading & offsetting, filter systems & technology, carbon emissions & foot-printing

Water – waste water filtration, desalination, water saving/efficiency

Clean tech materials – biodegradable materials & packaging

Clean tech enabling systems – clean combustion technology, measuring & control technology

Next generation biofuels – algae & cellulosic ethanol

For more information about Ken Hickson and his book, business and interests, visit: http://www.abccarbon.com/

To read about China’s Dezhou Solar City, click here.

To read a profile on what Australian company, CBD Energy is doing in China, click here.