Clean energy has entered a quantum phase. Not in a technological sense, but in the co-existence of the contradictory positions: Cheaper green energy would support uptake, yet meanwhile the US complains that China is overproducing clean electricity technology and thus flooding the market with cheap goods.
Perhaps this contradiction comes from the two ways we can understand “overproduction” as a greater supply than demand. We could either relate production to demand in the sense of free-market pull, or requirements to meet energy transition targets.
Green hydrogen is not scaling up as quickly as hoped in the US, limited by economic effectiveness of a federal tax credit scheme.
Meanwhile, China is heavily producing “the big three”: Electric vehicles, solar photovoltaics and lithium-ion batteries. The latter support energy storage, the need for which is often highlighted as holding up the green transition.
The arguments about the cost of hydrogen as a clean energy storage solution and China’s purported overproduction of lithium-ion batteries provide insights into contrasting aspects of the clean energy landscape.
On one hand, concerns about the expense of hydrogen as a clean energy option highlight the challenges of transitioning to sustainable alternatives. Hydrogen, particularly green hydrogen produced from water and renewable electricity, is touted as a crucial element in reducing carbon emissions. However, the production costs associated with green hydrogen remain high, making it less competitive compared to conventional, dirtier sources. The proposed tax credit in the U.S., aimed at incentivizing green hydrogen production, faces criticism for potentially keeping prices elevated and hindering market growth. This underscores the necessity for cost reductions to make clean hydrogen economically viable and widely adopted.
Conversely, the discourse surrounding China’s alleged overproduction of lithium-ion batteries presents a different narrative. China’s strides in renewable energy technology, including new energy vehicles and photovoltaic products, have garnered global attention. Despite claims of overcapacity, the interest in China’s green technology at international trade events like the Canton Fair reflects a significant demand for clean energy solutions. This demand stems from countries worldwide seeking to accelerate their transition to greener, low-carbon development pathways in response to the escalating impacts of climate change. The global push for net-zero emissions and the surge in renewable energy installations underscore the necessity for expanded production capacities in green technology sectors.
While concerns persist about market distortions and unfair trade practices, the overarching trend emphasizes the growing importance of clean energy solutions in combating climate change. Both discussions highlight the urgent need for technological advancements, policy support, and international cooperation to facilitate the transition to a sustainable energy future. Addressing cost barriers and ensuring equitable access to clean energy technologies are crucial steps towards achieving global climate goals and fostering inclusive economic growth.
@Joe_Ca and ChatGPT.
Sources
Green Hydrogen’s Hype Hits Some Very Expensive Hurdles, Forbes, 2024-04-16
Complaints are baseless against China green product exports, People’s Daily Online, 2024-04-26
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