Energy is destiny. That is an underappreciated rule that applies across history, economics and diplomacy. The countries with access to the best resources — whether the wind and peat-powered 17th century Dutch Republic, coal-fired 19th century UK or the oil-fueled 20th century US — have always been good at dominating more energy-impoverished rivals.
Those with an excess of domestic supply are also able to accumulate the wealth to become significant middle powers in their own right. Think of the influence, out of proportion to their relatively small populations, of fossil fuel exporters Australia, Qatar or Saudi Arabia.
Until recently, that dynamic has been dominated by the world’s great hydrocarbon reserves. However, clean energy is changing the picture — and China, which produces three-quarters of the world’s solar panels, is emerging as the clear winner.
The past year has seen rising protectionism in rich countries to stem the flow of China’s clean-technology exports, with tariffs of 60 percent on solar panels in the US. Electric vehicles attract levies of 110 percent in the US and as much as 45 percent in the EU. Rising saturation in some markets — solar power now accounts for about one-quarter of generation in Greece and Spain, according to BloombergNEF — might also lead people to suppose that the trade is now stumbling.
Far from it. What is happening instead is that products shut out of major developed markets are going elsewhere — and the biggest beneficiaries are likely to be the energy-hungry nations of the global south.
The implications are immense. Countries that have been trapped in energy poverty for generations due to the cost of imported fossil fuels might have a chance to grow faster thanks to cheaper renewables. China could use its technological expertise to burnish its relations with those rising powers, at a time when a delusional and short-sighted US President Donald Trump is abandoning the world stage. Nations that have grown powerful on the back of their fossil fuel exports have a potent new competitor in town. The winners and losers would define geopolitics and diplomacy in the 21st century.
Data collated by Ember, a nonprofit that favors the transition to clean energy, illustrates the scale of that new trade. The US barely shows up. Thanks to round upon round of tariffs and restrictions on Chinese solar products, it barely imported more panels last year than the Dominican Republic.
Developing nations and, perhaps surprisingly, petrostates in the Middle East, score far higher. Brazil, Pakistan, Saudi Arabia and India took four of the top five spots.
Compare solar imports to electricity generation levels and you get an even more powerful sense of how China’s solar industry is reshaping the world’s grids. Pakistan’s imports last year alone would be sufficient to provide about 13 percent of its grid power, while Oman’s would supply 7.2 percent of the total. Brazil, Chile, Morocco, Nigeria, the Philippines, Saudi Arabia, the United Arab Emirates and Uzbekistan each bought enough panels to fuel between 3 percent and 5 percent of their grids.
It is possible to argue that trade numbers distort the picture. The Netherlands takes the top spot in Ember’s data, with 40 gigawatts of panels imported from China over the course of the year — a figure that is no doubt flattered by its importance as a transshipment gateway into Europe.
Still, unless you assume those paid-for panels are gathering dust in warehouses rather than being connected, it is impossible to avoid the conclusion that solar power is now biting off substantial chunks of the world’s electricity with each passing year.
The world installed 599 gigawatts of solar panels last year, up by about one-third from 2023, BloombergNEF said. It is hard to comprehend numbers on that scale. Generating power only 15 percent of the time, those panels should produce about 787 terawatt-hours (TWh) of electricity — equivalent to the output of one-third of the world’s nuclear reactors, or what you would get from putting one-quarter of the entire worldwide liquefied natural gas market through a baseload gas generator.
Add that to the roughly 344TWh of wind that was connected last year, and the incremental amount of wind and solar added last year alone was equivalent to about 6.2 percent of all the fossil-fired electricity on the planet. Repeat that trick for 16 years and hold demand steady, and net zero could, in theory, be solved.
The problem, of course, is that demand for electricity is anything but steady — and any excess is made up with fossil fuels. Historically, it has grown at about 2.5 percent a year, but the International Energy Agency now expects it would rise by about 3.9 percent annually through 2027, as electric vehicles, heat pumps, air-conditioners, data centers and the like add new loads to the grid. If efforts to produce green steel come off, that number might be even higher.
Still, there is plenty of room for the market in photovoltaics to grow. Factories have abundant spare capacity to produce more panels, with BloombergNEF estimating that module makers can now pump out 1,392 gigawatts a year — more than double last year’s installations.
Faced with a choice between energy poverty, costly fossil fuels and cheap solar, developing economies are already voting with their feet. It might be invisible amid the fog of war in Washington right now, but the energy transition is proceeding apace. China looks like the winner.
David Fickling is a Bloomberg Opinion columnist covering climate change and energy. Previously, he worked for Bloomberg News, the Wall Street Journal and the Financial Times.
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