In 2013, China became the leader in the global renewable energy market. At the same time, the volume of total investments in the renewable energy sector amounted to $ 61 billion, 200 gigawatts of electricity generation capacity from renewable energy sources were installed with a conversion efficiency of 20.5% (which is the official maximum among the indicators of solar panels produced).

Despite the fact that traditional fuels will remain the main sources of energy for the life of China, the share of renewable energy sources should show positive dynamics in the future. China, the world's largest coal producer (45.5% of world production), is also its largest importer. In 2011, the share of coal in total energy consumption in China was about 70%. The high level of coal consumption leads to extremely negative consequences for both the environment and human health. The government is aware of the negative consequences of such energy consumption and is taking measures to promote renewable energy sources. Thus, in 2005, a law on renewable energy sources was issued, according to which, by 2020, 15% of China's energy should be generated using renewable energy sources. In 2009, this 15% also included the production of nuclear power, the environmental friendliness of which is the subject of discussions [2].

The Economist Intelligence Unit, an independent agency, has released a positive outlook for the development of renewable energy sources in China. According to experts, by 2020 the share of non-hydrocarbon energy sources is expected to increase to 16.4%, as well as an increase in wind, solar and hydropower capacities.

However, when analyzing the results of the previous, 11th five-year economic development plan for 2006-2010, it can be concluded that the goals set by it were not realized. With GDP growth above the set target (11.4% instead of the planned 7.5%), it was not possible to reduce energy consumption. Instead of the planned 20%, energy consumption fell by only 15.6%. Nevertheless, it can be considered successful to reduce carbon dioxide emissions by 9.7% against the declared 10% [1].

Among the measures aimed at reducing energy consumption and improving the environment is the introduction of a "carbon trading system". Under the government program, two provinces and five cities have been selected to implement carbon trading. According to the program, seven pilot projects were to be ready for implementation in the 13th five-year period (2016-2020). These projects were supposed to be the starting point for the creation of a national carbon trading system. The selected cities and provinces account for 25% of China's annual GDP production, but they represent regions with different levels of economic development and prosperity. As a consequence, localized emission trading schemes have their own characteristics, dictated by the economic context. This allows the Chinese authorities to use different schemes and gives the regions the choice of the programs most suitable for them.

Significant investments have been made in China's energy-intensive heavy industry, with plans to cut energy consumption by 16% during the current 12th five-year plan. In 2011, China managed to reduce energy consumption by 2% (with a planned reduction of 3.5%). Therefore, the Chinese authorities have tightened requirements to reduce energy intensity for industries with high energy consumption. And yet, despite the tightened requirements, China's industry is unlikely to be able to achieve the planned level of reduction in energy consumption.

As a result of the implementation of the state policy on the development of renewable energy sources, China has achieved certain results in the development of wind, solar, hydropower and waste recycling. Further, these types of energy will be considered separately.

In 2010, China ranked first in the production of wind power plants, overtaking the United States. Chinese wind turbine companies such as Sinovel Wind Group and Xinjiang Goldwind Science & Technology are among the five largest wind turbine manufacturers in the world. However, the rapid progress has to some extent been accompanied by quality losses, overproduction and suffering price competition. So, in 2011 Sinovel Wind Group's profit fell 73%, driven by over-demand. The rapid pace of development of the Chinese wind turbine business has led to an oversupply and a reduction in the number of small businesses, accompanied by the entry of large businesses in this area into foreign markets.

Another problem associated with the manufacture of wind turbines is the lack of power grids to transport electricity, which dramatically reduces the efficiency of the turbines. In addition, many wind turbines are being built in areas that are too far from power lines. So, at the end of 2013, 12% of wind turbines were not connected to the power grid [4]. Even the state power grid corporation in China is ambivalent about electricity generated by wind turbines due to its high cost and unreliable supply. Despite warnings about the low likelihood of building power lines near such turbines, companies continue to build wind turbines in areas remote from power grids [2]. Despite the increase in installed wind energy capacity, China has not been able to fully exploit the potential of wind energy due to the non-comprehensive approach to the implementation of wind energy programs in general.

Solar panel production in China is also enjoying high growth rates. In 2013, the country ranked first in the world in the production of solar panels. In 2013, the number of installed solar panels increased by an average of 200%, which corresponded to 12 gigawatts of capacity of the new generation of solar panels. This allowed China to come out on top in terms of new installed capacities in 2013 and to take second place after Germany in terms of installed capacities of solar panels [3].

The state authorities provide serious support to the solar panel production sector, including investments. In 2009, China launched the Golden Sun Solar Panel Support Program, providing generous subsidies to Chinese companies. However, in 2012, part of the subsidies was cut due to overproduction. Instead of investing in the production and installation of solar panels, the Chinese authorities have focused on financing energy distribution systems [4].

Avoiding a collapse in the state energy sector is also a concern for central officials. In 2019, China announced that coal-fired power plants in Xinjiang would merge under the auspices of one energy company to eliminate waste and reduce overcapacity. In May 2020, this policy was extended to more provinces. Coal still accounts for most of China's electricity production, so consolidating coal-fired power plants under one owner in each province could undermine the ability of nascent provincial spot and long-term contract markets to function competitively and effectively set prices. On the other hand, consolidation can also contribute to the closure of unnecessary coal capacities.