Beijing sets targets for off-grid solar power development

Beijing's move on solar power development comes at a time of industry weakness but analysts say it will be difficult to implement

PUBLISHED : Thursday, 27 September, 2012, 12:00am
UPDATED : Thursday, 27 September, 2012, 3:25am


Beijing has asked local governments to submit proposals for non-power-grid-connected solar power generation projects, whose total scale could potentially exceed targets set under the 2011-15 industry development blueprint, according to state media.

The development, which comes at a time when overseas demand for solar panels is weak and industry overcapacity and losses are severe, would help domestic solar panels and parts makers, but analysts said implementation would be difficult since such projects' power sales would effectively bypass the powerful power distribution monopoly State Grid Corp.

The National Energy Administration issued a circular this week, requiring all the provinces and municipalities to submit implementation proposals, the China Securities Journal reported, citing unnamed sources.

Each jurisdiction should propose not more than three projects, and whose combined generating capacity should not exceed 500 megawatts, it said.

This means, theoretically, a maximum of 15.5 gigawatts of projects could be submitted and approved from the 31 jurisdictions, exceeding the 10 GW target Beijing was aiming for the end of 2015.

In addition to the off-grid solar power farms that are designed to meet power needs, in the 2011-15, or 12th five-year plan, the central government also expressed hope for the industry to install 10 GW of grid-connected solar farms and 1 GW of solar-powered heat generation projects. The total investment involved is estimated by the government at 250 billion yuan (HK$307.5 billion).

By end-2020, Beijing wants solar farms of all sorts with generating capacity of 50 GW be built nationwide.

Macquarie Securities analyst Patrick Dai said the target numbers announced by the government were only indicative.

"They give a signal that the government is very keen to have them implemented, but whether they can be fully executed is another matter," Dai said.

He said the biggest challenge was from State Grid, which has the monopoly in building and running power grids in all but five southern provinces.

Dai cited the example of privately controlled Weiqiao Group, which had sold electricity in excess of its internal demand to other factories. State Grid and Weiqiao had clashed over such power sales on several occasions.

Meanwhile, Yingli Green Energy and Trina Solar, two of the mainland's largest solar equipment makers, rejected yesterday allegations by a group of European solar panel companies that Chinese rivals are benefiting from illegal subsidies.

Both Yingli and Trina said they financed their activities at market rates, Reuters reported.