China has cornered the global market for a critical technology, and experts warn that its dominance could be disastrous.
Experts highlighted China’s dominance in solar energy production and the danger of being “under the heel” of one country as the world grapples with “the first global energy crisis.”
International Energy Agency Executive Director Dr. Fatih Birol said the current energy crisis is “intertwined with many factors, including geopolitics.”
Countries around the world are currently grappling with skyrocketing gas prices after sanctions were imposed on Russia following its invasion of Ukraine. The Covid-19 pandemic has also caused turmoil in the supply chain.
“We are in the middle of the first global energy crisis,” Dr. Birol said Tuesday at the Sydney Energy Forum.
“The world has never seen a major energy crisis in terms of its depth and complexity … I believe we may not have seen its worst yet.”
Dr. Birol also wanted to warn about the energy security implications of China’s global dominance in solar power generation.
He said about 80% of the solar energy production in the global supply chain comes from China and that figure is expected to grow to 95% by 2025.
Although Dr. Birol acknowledged that China has done an excellent job of reducing the cost of solar energy over the past 10 to 15 years, “80 percent for any country in the world is a big number.”
“Relying on the whole world, on one country is what we should all be thinking about in terms of energy security,” he said.
He said that one province in China accounts for about 40% of global production, and two large factories account for about 25%.
“What happens if there is a fire in one of these factories? The entire global supply chain will be affected,” said Dr. Birol.
“From this perspective, we believe that diversifying solar energy supply chains will be essential.”
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Dr. Birol said the three manufacturers around the world are also responsible for more than 75 percent of the world’s production of critical lithium and cobalt minerals, which are important for electric vehicle batteries.
“Again, diversification is very important here,” he said.
US Secretary of Energy Jennifer Granholm also spoke at the forum and echoed Dr. Birol’s concerns.
“We want to make sure that we, as a nation, are not under the heel of oil dictators,” said Ms. Granholm.
“Controlled by those who do not share our values, and controlled by those who strategically would like to control aspects of the supply chain.
“We all want to have a big footprint in the supply chain, but we also want to make sure we do it in partnership with each other.”
Ms Granholm said the global market for products to reduce greenhouse gas emissions is valued at about $23 trillion and provides an opportunity to make money, but can also contribute to more peaceful relationships.
“No country has ever been hostage to access to the sun, no country has ever been hostage to access to wind – they have never been armed and never will be,” she said.
“Therefore, our global transition to clean energy could be the greatest peace plan of all.”
Prime Minister Anthony Albanese said the Covid-19 pandemic has exposed vulnerabilities and exposed issues that simply cannot be ignored.
He said the war in Ukraine also affected energy supplies and prices and changed energy markets.
In Australia, severe weather has also affected energy demand and the supply of renewable energy.
“We need to act, and my government will act, we will lay a new foundation for sustainable growth and prosperity,” Mr. Albanese said.
At the CSIRO forum, Australia and the US National Renewable Energy Laboratory signed an agreement as the first step in the two countries’ joint work on key technologies such as long-term storage, electric vehicles and grid integration.
Asked if China is seen as a contender in the race for clean energy, Ms Granholm said: “I am concerned that China is using many technologies and supply chains that could end up leaving us vulnerable if we don’t develop our own. own supply chains. “.
“Therefore, in terms of energy security, it is extremely important that countries that share the same values develop their own supply chains, not only for the climate, which is of course very important, but also for our own energy security.
“We’ve seen what happens when we rely too much on a single entity as a fuel source, and we don’t want that to happen. So diversifying these energy sources and building relationships with partners is all part of our energy security.”
Climate Change and Energy Minister Chris Bowen said there were good discussions between the two countries’ interests in improving production and supply chains.
“It’s good for our own economy. It’s also good for national security to have supply chains between each other, between friends and allies.”
Meanwhile, Dr. Birol said some countries blame the current energy crisis on clean energy policies.
“This is absolutely wrong in terms of facts and ethics, very wrong and misleading,” he said.
Asian Development Bank President Masatsugu Asakawa said the battle against climate change will be won or lost in the Asia-Pacific region, which currently accounts for more than 50% of global greenhouse gas emissions.
He said energy efficiency would be the fastest and least costly option for countries to reduce energy demand and help them better manage power outages.
Originally published as Under the heel: energy security fears China’s solar dominance