Clean energy firms feeling the heat as governments cut subsidies

The green-energy industry is starting to feel the impact of an efficiency drive sweeping Asia, with governments from China to Japan scaling back subsidies to constrain a boom in installations.
Investment in clean-power technologies in Asia slumped 41 per cent to US$70.1 billion in the first nine months of the year, according to Bloomberg New Energy Finance. That is the first decline in an industry that is barely a decade old. But the ability of those plants to produce electricity is on track to surge 13 per cent, the research group said.
Renewables have to be built efficiently and used more efficiently. Solar is becoming cheaper, and there is more efficient build
The findings underscore the concern of authorities about their ability to integrate a burgeoning number of wind and solar farms, which have strained the capacity of electricity grids.
A drop in investment “doesn’t mean that the industry is declining,” said Justin Wu, head of Asia and Pacific for BNEF in Hong Kong. “It is self-correcting. Renewables have to be built efficiently and used more efficiently. Solar is becoming cheaper, and there is more efficient build.”
In China, the world’s biggest market for the technology, subsidies were recalibrated at the end of last year because electricity demand stagnated and grid authorities struggled to keep up with the number of new wind and solar farms seeking connections.
Those factors reduced the need for new renewable energy capacity, giving the government the upper hand in negotiations over the price it will allow for power purchase agreements.
Japan has had a similar experience. The second-biggest market for solar in recent years has cut support for renewables to give utilities more time to integrate the variable flows of electricity and to take advantage of lower costs. The result was that worldwide, clean energy investment fell to its lowest in three years in the third quarter, according to BNEF data.
