China cuts solar subsidies as it starts to build its largest offshore wind facility
JAKARTA — China is starting to build its largest offshore wind-power facility in the latest move in an accelerating shift in Asia away from solar to wind and other renewable energy sources.
Work began in late October on the facility off Nanpeng Isle in China’s southern Guangdong Province. The project has a planned capacity of 400,000 kilowatts, and its developer, China General Nuclear Power Corporation, expects it to generate about 1.46 billion kilowatt hours of power annually when it goes on stream in 2020.
Wood Mackenzie, an energy consultancy, sees wind-generated capacity in the region growing by a factor of 20 over the next decade, powered by Beijing’s plans for a 15-fold expansion. Guangdong plans to build 23 offshore wind farms by 2030, according to China’s official Xinhua News Agency.
Meanwhile, Asia’s solar-powered electricity capacity is set to fall this year for the first time since 2001, as countries such as China cut subsidies.
Solar demand will drop 18% in 2018 due to reduced installations in China, India and Japan, according to a Wood Mackenzie estimate. Beijing has already hit its 2020 target for photovoltaic, or PV, installations, prompting a reduction in subsidies for solar power.
“Policy changes in key solar markets is what is driving the decline, rather than expansion of wind power,” said Robert Liew of Wood Mackenzie. “That said, there is increasing competition as both wind and solar are competing for grid availability before new ultra high voltage lines are completed.”
Asia accounted for nearly two-thirds of the worldwide increase in renewable energy generating capacity last year, and around 18% of total energy supply in the region was derived from renewable sources in 2014, according to a United Nations report last year. This puts Asia above the international average, meaning shifts in big markets such as China, India and Japan greatly affect the global outlook for clean energy.
India, especially, provides major opportunities for clean energy providers. The International Renewable Energy Agency estimates that 80 million of the country’s 250 million households “have limited or no access to electricity.”
But more traditional sources, such as coal, remain in common use in India and across the region. Inefficient and outdated infrastructure also hamper the possible growth of solar and wind, meaning dirty fuels are likely to remain popular.
“The grid system cannot handle the large influx from variable power sources such as renewable energy,” said Liew.
It’s a similar story across Asia, with a slew of new coal plants now operating or under construction. China’s coal power generation increased by 4% last year due to rising electricity demand, according to the International Energy Agency. In India, it rose 13%.
“Countries such as India will continue to rely on coal for a foreseeable future,” said City University’s Yarime. “But at the same time we see a significant decline in the cost of solar and wind installations in recent years, so these renewable energy sources will be able to compete with conventional energy sources such as coal soon.”
Yongping Zhai, chief the Asian Development Bank’s Energy Sector Group, said that the falling cost of photovoltaic panels means “it is likely that grid-parity [in costs] will be achieved earlier than expected so that solar PV can compete with conventional power without subsidies.”
