China Renewable Energy and Battery Storage Promotion Project

Start & End Date: 2019-2025

Country/Countries: China

Multilateral Institution(s) Involved: World Bank

China has experienced fast economic growth in the decades to 2019 and this has contributed to a dramatic reduction in extreme poverty. Nevertheless, the steady growth of China’s economy has driven a fast rise in energy consumption, leading to severe domestic and global environmental impacts. Hence, China faces ongoing challenges to: (a) further reduce the share of coal in the energy mix and address associated serious environmental pollution; (b) further reduce the energy intensity (energy consumption per unit of GDP); and (c) cap and reduce greenhouse gas (GHG) emissions to fulfill its nationally-determined contribution (NDC) to global action on climate change under the Paris Agreement.

The objective of the Renewable Energy and Battery Storage Promotion Project in China is to promote the integration and use of renewable energy through the deployment of battery storage systems and innovative applications of renewable energy (RE). This project is comprised of an Investment component. The proposed project will principally support the installation of battery storage systems and innovative RE applications. It was funded by the World Bank and implemented by Huaxia Bank.The investments to be financed by sub-loans from Huaxia Bank to sub-borrowers would include: (a) battery storage systems to be installed: at the generation level in existing wind farms and solar PV plants; at the grid level in existing substations; and, at the consumer level such as in industrial and commercial zones; (b) installation of DRE capacity with battery storage; and (c) scale-up of innovative RE applications such as RE for heating (geothermal and biomass) and for hydrogen production.

The project was approved by the Board of Executive Directors of the World Bank on June 11, 2019. The project effectiveness was announced on March 18, 2020. Huaxia Bank has started the project implementation to identify investment in battery storage and new applications of renewable energy. Moderate progress has been made and Huaxia Bank has financed four battery storage investment projects and one biomass for heating project while more projects are under discussion. The World Bank team is working with Huaxia Bank to accelerate the project implementation, mainly business development, capacity building, and support to establishment of the required policy environment.