China Approves Over 20 GW of Subsidy-Free Wind and Solar Projects

China has approved over 20 GW of solar and wind projects as part of its plan to install unsubsidized renewable energy projects in the country.

This first batch of subsidy-free projects was released by China’s National Development and Reform Commission (NDRC) and the National Energy Administration (NEA).

The 20.76 GW of capacity has been split into wind (4.51 GW), solar PV (14.78 GW) and distributed trading pilot projects (1.47 GW). The announced solar grid parity projects have been distributed across 16 provinces with Guangdong taking the lead at 2.38 GW.

In an emailed statement, Frank Haugwitz, the director of Asia Europe Clean Energy (Solar) Advisory Co. Ltd (AECEA), commented, “14.78 GW of solar projects consists of 168 projects, with the average project capacity being approximately 90 MW. The latter is surprising, given that the capacities of the recent grid parity projects were in the triple-digit MW range, often between 200 MW to 300 MW and up to 700 MW.

According to Frank, “AECEA assumes that the less than 100 MW average capacity of these grid parity projects might have been influenced by last year’s module price erosion as well, given that the majority of projects are within provinces that are home to comparatively high retail electricity tariffs, which enables the execution of such projects. If one takes a closer look at the distribution of projects across the 16 provinces, it reveals that except Zhejiang, Fujian, and Hainan, all eastern coastal provinces will witness the execution of such projects. However, equally important is the form and extent of local support granted to these projects. According to NDRC’s announcement, land use fees, for instance, were partly or even fully waived.”

The 168 projects have been classified into four categories. Surprisingly, a significant number of these projects will not be grid-connected and operational by the end of 2019. Rather, it is likely to stretch until mid-2020, September 2020, early 2021, and in a few cases even by 2023. Such projects are to be developed in up to three phases, according to Frank.

In April 2019, Mercom had reported about China’s National Energy Administration (NEA), drafting a project report on promoting non-subsidized affordable projects for wind and solar power generation.

In June of 2018, China shocked the global solar markets by imposing installation caps and reduced feed-in tariff (FiT) for solar projects in the country affecting solar demand in the country after which installations declined from 53 GW in 2017 to 44 GW in 2018. The change in policy is a result of a massive subsidy backlog of 120 billion yuan ($17.4 billion).

As of now, China is the largest solar PV market in the world. Prioritization of unsubsidized projects with an off-take guarantee will further help the country in consolidating its pole position.