Goldman Sachs’ research division has concluded that China is set to exceed its current wind and solar energy target by almost three times.
According to a report by Goldman Sachs, China’s combined wind and solar energy capacity is expected to reach 3.3 terawatts (TW) by 2030, far surpassing the current government target of 1.2 TWh. The report suggests that if China continues to accelerate its wind and solar deployment at this pace, it could achieve energy self-sufficiency by 2060.
Goldman Sachs believes that an affordable renewable energy system with ample energy storage and smart grid transmission would be China’s long-term solution to achieving energy independence, as the country aims to reduce its reliance on imported fossil fuels.
By 2030, the bank expects China’s progress on renewables to help reduce energy imports by 10%, but notes that this is only the beginning.
Goldman Sachs analysts project that renewable installations accelerating as per their forecasts could lead to a 50% reduction in China’s energy imports by the early 2040s. As a result of renewable cost innovations, China’s deployment of wind and solar will eventually lead to lower energy expenses for consumers.
To achieve these goals, China will need to invest $US2.26 trillion by 2040 in renewable energy and grid storage. The country will require roughly 520GW of storage, of which more than three-quarters should come from batteries – 70 times greater than in 2021 – with the remaining amount coming from pumped hydropower stations.
The authors of the report predict that a smart and interconnected grid will become a fundamental element of China’s Energy Internet. This modernized power system integrates various energy sources and facilitates large-scale interactive energy transmission and transactions. The expansion of the Energy Internet will lead to more advanced power and transmission solutions, such as virtual power plants, big data analytics, and real-time power dispatching. These innovations would enable even greater incorporation of green power into the generation mix.
It should be noted that if the actual investment falls short of the forecasts and expectations outlined in the Goldman Sachs report, China’s ability to achieve these ambitious goals may be impacted. Nevertheless, out of all the countries that are currently pursuing a transition towards sustainable energy, China possesses both the resources and determination necessary to scale the potential heights that lie ahead.
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