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China: GEF grant to support continued scale-up of renewable energy

October 29, 2013

WASHINGTON, October 29, 2013 – Today the World Bank’s Board of Executive Directors approved the second phase of the China Renewable Energy Scale-Up Program (CRESP II), which is financed with a grant of US$27.28 million from the Global Environment Facility (GEF) to the People’s Republic of China. This program supports the country’s ambitious renewable energy scale-up program with a focus on efficiency improvement and reduction of incremental costs.

With fast economic growth, China’s total primary energy consumption more than doubled between 2000 and 2011 with electricity consumption growing at about 12 percent per annum. Coal continues to dominate the energy mix, accounting for 68.8 percent of the primary energy consumption in 2011.

Concerned with the adverse health and environmental consequences associated with coal combustion, energy security risks, and resource scarcity challenges, the Government of China is continuing its efforts to increase renewable energy’s contribution to meet primary energy and electricity needs, with ambitious targets to increase the non-fossil fuel share of primary energy supply to 15 percent by 2020.

However, continued and sustainable scale-up of renewable energy development faces new challenges and barriers. In particular, a large share of wind power cannot get connected to the grids and the cost of the renewable energy program could become prohibitive without reduction of the incremental costs between renewable and fossil fuels and improvement of efficiency of renewable energy operations.

The GEF and World Bank Group have been supporting China’s efforts to develop and expand renewable energy. The first phase of the China Renewable Energy Scale-Up Program (CRESP), financed with a GEF grant of US$40.22 million and a Bank loan of US$159 million, was completed in December 2011 and made significant contributions to the scale-up of renewable energy in China and triggered government investments on a large scale during the 11th Five-Year Plan.

“The second phase of the project will build on its earlier success, and is aimed to help address the policy, institutional, operational and technological barriers and contribute to the sustainable  scale-up of renewable energy in China,” said Xiaodong Wang, World Bank’s Senior Energy Specialist and Task Team Leader for CRESP II. “The partnership between the World Bank, GEF, and Chinese government remains key to support the government’s efforts to achieve its ambitious renewable energy and carbon intensity reduction targets.”

Specifically the Second Phase of the Renewable Energy Scale-Up Program will support developing and implementing renewable energy legislation and policies to achieve cost reduction, efficiency improvement, and smooth grid integration. It will organize targeted studies on grid integration and grid access, and strategic and optimal deployment of key technologies to enhance efficiency and reduce costs. The project will assist in technology improvements by increasing efficiency of existing grid-connected wind and solar PV farms, and improving quality and reducing costs of new renewable energy technologies such as off-shore wind. It will support piloting and exploring new ideas relating to the scale-up of renewable energy and optimization of wind in the power system in Inner Mongolia, and piloting renewable energy distributed generation in selected New Energy Cities.

The Global Environment Facility (GEF) unites 183 countries in partnership with international institutions, civil society organizations (CSOs), and the private sector to address global environmental issues while supporting national sustainable development initiatives. An independently operating financial organization, the GEF provides grants for projects related to biodiversity, climate change, international waters, land degradation, the ozone layer, and persistent organic pollutants.

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