World Bank has agreed to provide a grant of about $7.3m from the Global Environment Facility (GEF) to support China in scaling up its distributed renewable energy technologies.

World Bank

Image: World Bank to support China in distributed renewable energy. Photo: Courtesy of John Hornak/FreeImages.com.

World Bank said that distributed renewable energy technologies allows renewable energy to be used at source for consumption or grid stabilization, thereby reducing the need to transmit renewable energy across vast distances between the places of production to the places of consumption.

The potential for distributed renewable energy is also associated with battery storage capacity. Though the two technologies are expected to make a significant contribution to emission reductions, they are considered to be technically risky, lack developed business models, and need regulatory changes to offer this full potential.

The present grant is expected to support piloting and regulatory technical assistance to address the challenges faced by distributed renewable energy technologies.

China has set targets to increase its share of renewable sources in its total energy consumption to 15% by 2020, 20% by 2030 and more than 50% by 2050. Growth in renewable energy has helped the country to accelerate its share of non-fossil fuel energy from 8.6% in 2010 to 14% last year.

The country is a one of the leading producers of hydropower, wind, solar and geothermal power in the world. But, China has inefficiency issues, as it faces curtailment due to limited grid capacity.

World Bank senior energy specialist Song Yanqin said: “This GEF project will help China harness the potential of its clean energy transition. The global community will also benefit from the avoided greenhouse emissions as a result of the project.”

The GEF Distributed Renewable Energy Scale-Up Project will support studies in areas of planning, grid access, pricing, market design and business models for developing policies and regulations at national and provincial levels. It will finance pilots in specific locations such as a city, a district or an industrial park to demonstrate financial, institutional and business-model viability of scaling-up.

Since its establishment in 1992, the GEF has been assisting in tackling the most pressing environmental problems. To date, it has provided more than $17.9bn in grants and mobilized an additional $93.2bn in co-financing more than 4500 projects across 170 countries.