China fast tracks targets for higher clean energy use
More financial support needed if the industry is to achieve the new targets, says one analyst
Beijing has set targets for faster growth in installed wind power generation capacity and higher levels of solar power usage up to 2017, though analysts say more financing and subsidies will be needed for them to be realised.
In a circular issued yesterday providing guidance for the expansion of renewable energy and more use of cleaner-burning fossil fuels to rein in pollution-prone coal burning, the National Development and Reform Commission set a goal of 150 gigawatts (GW) for wind power capacity and 70 GW for solar capacity by 2017.
It is part of an objective to see non-fossil fuel supply generate 13 per cent of the nation's energy consumption by 2017, up from a target of 11.4 per cent in 2015 and 9.8 per cent last year.
From 2001 to 2015 Beijing planned to invest 1.8 trillion yuan (HK$2.26 trillion) to develop renewable energy projects to realise a goal of 100 GW of wind power capacity and 35 GW of solar capacity.
At the end of last year, the mainland had 77.6 GW of wind power capacity, according to the China National Renewable Energy Centre. It also had around 20 GW of solar capacity.
In order to reach the new targets, an annual average of 18.1 GW of capacity from wind farms and 12.5 GW of solar capacity would need to be added in the four years to 2017. In January the National Energy Administration (NEA) said it aimed to add 18 GW of wind farm capacity and 14 GW of solar farm capacity this year.
Last year, wind farms installations totalled 14.9 GW, short of the NEA's target of 18 GW, due to a shortage of power transmission capacity that resulted in lower-than-expected capacity utilisation and reduced profits for developers.
The grid bottleneck has persisted in the past three years, with substantial relief only seen last year after state-owned power transmission and distribution monopoly State Grid Corp of China fast tracked some projects.
"To reach the 2017 wind target, more needs to be done on transmission infrastructure expansion, and more financing needs to be made available," said Michael Parker, senior analyst at US brokerage Sanford C. Bernstein. "Project approvals also need to be fast tracked."
For solar farms, last year the industry far exceeded the NEA's target of 10 GW, installing 12 GW, the largest by any nation in a year.
After solar panel prices fell sharply for several years up to last year, Beijing cut subsidised power prices charged by solar farm developers. Panel prices began to stabilise last year.
Parker said the mainland will likely only cut solar power prices further after installations exceed the annual targets.