Page 362 - 2021 White Paper
P. 362
1 White Paper on the Business Environment in China
growing environmental concerns. However, with GW in 2020 due to COVID-19 related challenges. If
the economic downturn induced by the outbreak of these assumptions are correct, there was enough
Covid-19, demand from the residential PV segment grid capacity to accommodate the newly installed
will be severely affected due to the financial solar capacity in 2020 (Nairwrite). By the end of
uncertainty faced by the customers. Commercial 2020, renewable energy will generate 1.9 trillion
and industrial installations are expected to be kilowatt-hours of electricity, which represents 27%
negatively affected as discretionary spending will be of the country’s total power generation, according
delayed, and preserving short-term cash flow will to the government’s 2016-2020 renewable energy
become a priority. Further, in the utility segment, plan (Reve).
supply chain disruptions and weaker investment will
lead to delays in project commissioning. Despite the Hydroelectric
2020 slowdown due to the coronavirus pandemic's
challenges, the outlook for solar remains strong in China has more than quadrupled its hydropower
the medium term, and the market is expected to capacity since the turn of the century, accounting
expand during the forecast period as the cost of for over half of worldwide growth. The economy has
generation from solar PV is increasingly becoming benefitted hugely from the development of its vast
cheaper than its alternatives (Cision). hydropower resources, which account for around
17% of total electric power installed capacity. Total
With that in mind, the Chinese state-owned hydropower capacity reached 356 GW in 2019 after
utility Huanghe Hydropower Development finished a further 4.2 GW in capacity was added and China’s
building the world's second largest solar power total estimated hydropower generation reached
project in a desert in the northwestern Chinese 1,302.00 TWh. Pumped storage hydropower capacity
province of Qinghai in 2020. The 2.2 GW solar plant grew by just 300 MW in 2019, with a temporary pause
was built in five phases. It involved an investment on new projects. This was due to a lack of progress
of 15.04 billion RMB (US$2.2 billion) and includes in electricity market reforms affecting investment
202.8 MW/MWh of storage capacity (Bellini). returns for energy storage projects, and pressure
to reduce electricity prices for consumers. With the
Altogether, the cumulative installed solar power outbreak of the Covid-19 pandemic, a number of
capacity of China till the end of March 2020 reached hydropower projects were halted and construction
208 GW, out of 802 GW renewable energy capacity. schedules were disrupted. As China has eased its
On a cumulative basis, the NEA says this is a growth social distancing measures, construction has since
of 15.6% for solar PV segment. The NEA recently resumed. In addition, a number of pumped storage
tasked its power grid companies to calculate the and grid infrastructure projects have been resumed
amount of clean power from wind and solar that to stimulate the recovery. In the next five years,
can be accommodated into the grid in 2020 with a China expect to see new hydropower projects being
view to promote the expansion and stable growth commissioned including mega projects such as
of these industries. A Chinese local media report Wudongde (10,200 MW) and Baihetan (16,000 MW)
claimed there is enough grid capacity to connected on the Jinsha River, as well as Lianghekou (3,000
47 GW of solar in 2020, and for wind it would be 37 MW) and Yangfanggou (1,500 MW) on Yalong River
GW this year. It added that as overseas PV market will be completed between 2021 and 2022. The first
has ‘basically shut down’ due to COVID-19 pandemic, batch of generating units at Wudongde has been
domestic demand is now the ‘main battlefield’ for commissioned in July 2020. In recent years, annual
companies operating in the clean energy space. In capacity growth has slowed in line with weaker
such a situation, knowledge of grid availability is a economic conditions and reduced power demand
helpful factor as the administration works to ensure growth, resulting in overcapacity and renewables
power curtailment is curbed. In this direction, the curtailment. Inter-provincial power transmission
NEA has launched a draft on establishing and channels have been constructed to export excess
improving a long-term mechanism for clean energy hydropower generation and in 2018, two further
consumption and is seeking public comments. transmission lines from Yunnan province achieved
Notably, several market intelligence firms claim the significant progress. The 800 kV Northwestern
Chinese solar market grew between 33.4 GW to 45
362
growing environmental concerns. However, with GW in 2020 due to COVID-19 related challenges. If
the economic downturn induced by the outbreak of these assumptions are correct, there was enough
Covid-19, demand from the residential PV segment grid capacity to accommodate the newly installed
will be severely affected due to the financial solar capacity in 2020 (Nairwrite). By the end of
uncertainty faced by the customers. Commercial 2020, renewable energy will generate 1.9 trillion
and industrial installations are expected to be kilowatt-hours of electricity, which represents 27%
negatively affected as discretionary spending will be of the country’s total power generation, according
delayed, and preserving short-term cash flow will to the government’s 2016-2020 renewable energy
become a priority. Further, in the utility segment, plan (Reve).
supply chain disruptions and weaker investment will
lead to delays in project commissioning. Despite the Hydroelectric
2020 slowdown due to the coronavirus pandemic's
challenges, the outlook for solar remains strong in China has more than quadrupled its hydropower
the medium term, and the market is expected to capacity since the turn of the century, accounting
expand during the forecast period as the cost of for over half of worldwide growth. The economy has
generation from solar PV is increasingly becoming benefitted hugely from the development of its vast
cheaper than its alternatives (Cision). hydropower resources, which account for around
17% of total electric power installed capacity. Total
With that in mind, the Chinese state-owned hydropower capacity reached 356 GW in 2019 after
utility Huanghe Hydropower Development finished a further 4.2 GW in capacity was added and China’s
building the world's second largest solar power total estimated hydropower generation reached
project in a desert in the northwestern Chinese 1,302.00 TWh. Pumped storage hydropower capacity
province of Qinghai in 2020. The 2.2 GW solar plant grew by just 300 MW in 2019, with a temporary pause
was built in five phases. It involved an investment on new projects. This was due to a lack of progress
of 15.04 billion RMB (US$2.2 billion) and includes in electricity market reforms affecting investment
202.8 MW/MWh of storage capacity (Bellini). returns for energy storage projects, and pressure
to reduce electricity prices for consumers. With the
Altogether, the cumulative installed solar power outbreak of the Covid-19 pandemic, a number of
capacity of China till the end of March 2020 reached hydropower projects were halted and construction
208 GW, out of 802 GW renewable energy capacity. schedules were disrupted. As China has eased its
On a cumulative basis, the NEA says this is a growth social distancing measures, construction has since
of 15.6% for solar PV segment. The NEA recently resumed. In addition, a number of pumped storage
tasked its power grid companies to calculate the and grid infrastructure projects have been resumed
amount of clean power from wind and solar that to stimulate the recovery. In the next five years,
can be accommodated into the grid in 2020 with a China expect to see new hydropower projects being
view to promote the expansion and stable growth commissioned including mega projects such as
of these industries. A Chinese local media report Wudongde (10,200 MW) and Baihetan (16,000 MW)
claimed there is enough grid capacity to connected on the Jinsha River, as well as Lianghekou (3,000
47 GW of solar in 2020, and for wind it would be 37 MW) and Yangfanggou (1,500 MW) on Yalong River
GW this year. It added that as overseas PV market will be completed between 2021 and 2022. The first
has ‘basically shut down’ due to COVID-19 pandemic, batch of generating units at Wudongde has been
domestic demand is now the ‘main battlefield’ for commissioned in July 2020. In recent years, annual
companies operating in the clean energy space. In capacity growth has slowed in line with weaker
such a situation, knowledge of grid availability is a economic conditions and reduced power demand
helpful factor as the administration works to ensure growth, resulting in overcapacity and renewables
power curtailment is curbed. In this direction, the curtailment. Inter-provincial power transmission
NEA has launched a draft on establishing and channels have been constructed to export excess
improving a long-term mechanism for clean energy hydropower generation and in 2018, two further
consumption and is seeking public comments. transmission lines from Yunnan province achieved
Notably, several market intelligence firms claim the significant progress. The 800 kV Northwestern
Chinese solar market grew between 33.4 GW to 45
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