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China's wind and photovoltaic power generation into the bidding era may trigger a major industry shake-up

2019-06-14


"The most market-oriented policy in history" China's wind power photovoltaic power generation into the bidding era

"The opening of competition, new energy price decline is an inevitable trend, very likely to promote a new round of industry reshuffle." On June 2, an industry source from Ningxia, China's first comprehensive demonstration zone for new energy and the first pilot region of the auxiliary power service market in Northwest China, said that newly announced wind power and photovoltaic power generation projects will adopt competitive configuration, giving priority to projects with low subsidy intensity and strong slope regression.

The New Deal is bound to affect business investment enthusiasm

On May 30th, the National Energy Administration issued "about 2019, wind power, photovoltaic power generation project construction related matters notice, clear wind power, photovoltaic power generation project is divided into two categories, do not need to state subsidies and need state subsidies, in power grid enterprise organization the demonstration of the power project and implement the parity, send out and based on the given condition, promoting the construction of parity project priority, start to state subsidies on the competition project configuration.

A person in charge of the new energy department of the bureau said the purpose of the move is to improve the competition allocation mechanism of projects that need state subsidies and reduce the dependence of industry development on state subsidies. This year, the general direction of wind power and photovoltaic power generation is to "adhere to the general keynote of seek improvement in stability, speed up technological progress and reduce the intensity of subsidies, do a good job in coordinating project construction and consumption capacity, and achieve high-quality development".

This is known as the "history of the most market-oriented" policy, marking the country's wind power photovoltaic into the bidding era.

Since the "13th Five-Year Plan", the application scale of wind power and photovoltaic power generation in China has been expanding, the technical level has been significantly improved, and the cost has gradually decreased. But at the same time, the subsidy gap continues to expand, some areas abandoned wind and light power rationing and other problems are prominent.

The latest figures show that the installed capacity of new energy in Ningxia's power grid is about 15 million kilowatts, accounting for 49% of the power generation and 102% of the electricity load. It has become the first provincial power grid in China where the output of wind power and photovoltaic power exceeds the power consumption of the whole region. From 2013 to 2018, the average annual growth rate of wind power installed capacity was 27%, photovoltaic installed capacity was 40%, and new energy installed capacity was 32%, ranking second in the country.

An expert from the Ningxia New Energy Research Institute, who declined to be named, said that the fierce competition among energy investment enterprises is mainly reflected in the competition of feed-in tariff. As the price of electricity drops, the return on investment will also decrease, which will inevitably affect the enthusiasm of enterprises to build photovoltaic power stations. On the other hand, some photovoltaic power generation enterprises have to invest by selling power stations in order to digest their production capacity, which also has a great impact on their enthusiasm to build power stations.

The main reason is that the price of photovoltaic construction has dropped significantly in recent years, and the decrease of equipment price leads to the decrease of investment cost.

The expert said the initial set price was as high as 20 yuan per watt, but dropped to a minimum of 1.6 yuan per watt last year. "This also means that the electricity price to a low level, two years ago the lowest electricity price in Ningxia is 0.55 yuan, now open up the competition, it is estimated that it will reach 0.35 yuan or so, basically close to parity." He admits.



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