As China Ups Its Renewable Energy, Give 'KGRN' a Look

A global renewable energy surge is getting a boost from China, which can access with the KraneShares MSCI China Clean Technology Index ETF (KGRN).

The latest numbers from the International Energy Agency show an increased contribution from China in renewable energy.

“The IEA predicts large capacity gains in renewable energy will become the ‘new normal’ in 2021 and 2022, with increases similar to 2020’s record total,” an NPR article said.

“An unprecedented amount of renewable power came online in the fourth quarter of 2020, the report states,” the article added further. “China alone added more than 92 gigawatts of capacity – more than triple the amount it added in the fourth quarter of 2019. The U.S. added 19 gigawatts, a sharp gain over the 13.7 it added in the same quarter of the previous year.”

KGRN seeks to track the performance of the MSCI China IMI Environment 10/40 Index. The Index is comprised of securities that derive at least 50% of their revenues from environmentally beneficial products and services.

The Index is based on five key Clean Technology environmental themes: Alternative Energy, Sustainable Water, Green Building, Pollution Prevention, and Energy Efficiency. The Index aims to serve as a benchmark for investors seeking exposure to Chinese companies that focus on contributing to a more environmentally sustainable economy by making efficient use of scarce natural resources or by mitigating the impact of environmental degradation.

Overall, KGRN gives investors:

  • Access to China’s fast-growing environmental protection industry
  • Exposure to companies that stand to benefit from China’s increased focus and spending on clean energy technologies
  • Benchmarking to an MSCI ESG Index

KGRN Chart

China Powers Up with Wind and Solar Energy

China has been specifically upping the ante on wind and solar power use. The country recently met its renewable energy policy goals.

“The IEA’s Renewable Energy Market Update identifies several countries as driving the phenomenal growth in renewable energy last year, including China, the U.S. and Vietnam,” the NPR article said. “All three countries were facing policy deadlines that spurred renewable energy projects to completion.”

“For the first time, China accounted for 50% of the world’s growth in renewable energy capacity,” the article added. “The country is expected to add slightly less renewable power capacity in 2021, as it phases out some subsidies for wind and solar projects.”

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