China’s new policy may
lead to solar slowdown,
even as emissions rise
Vietnam’s Ministry of Industry and
Trade (MoIT) has been asked to report
the list of approved solar power plants
to Prime Minister Nguyen Xuan Phuc
before July 15, 2018.
The request follows the government’s
admission that its Power Development
Master Plan VII currently
has many shortcomings, which
prompted the ministry to propose to
Deputy PM Trinh Dinh Dung a supplementation
of some solar power
projects into the plan.
The development of thermal power
plants has faced difficulties due to
stricter requirements on environment
protection as well as infrastructure and
coal supply to plants. Many projects in
the plan have been delayed, especially
those in the southern region, including
Long Phu I, Long Phu II, Song Hau I,
Song Hau II and Vinh Tan III.
Solar projects have been identified as
clean and quick to build. Deputy PM
Dung has asked the ministry to report
the specific list of approved solar projects
to be supplemented into electricity
planning in localities while improving
the management of the projects. In
addition, the ministry has been asked
to quickly complete the national solar
power development plan to submit to
the Prime mMnister.
The MoIT has approved more than
70 projects, with a total capacity of
over 3000 MW, to be operational
before June 2019.
Notably, last month B Grimm Power
said it had signed a collaboration agreement
for the development of a solar
power plant with 420 MW installed
capacity in Tay Ninh. This would be
the largest solar plant in Southeast
Asia.
Meanwhile construction of Vietnam’s
biggest solar power plant, with
a capacity of 168 MWp, kicked off in
the south central province of Ninh
Thuan on June 8th.
Support from the Asian Development
Bank (ADB) is enabling the advancement
of significant renewables programmes
in Pakistan and Indonesia.
Last month the bank announced that
it will contribute to Pakistan’s national
goal of enhanced energy security
through a $325 million loan. The
money will help Pakistan install 5204
MW of new capacity through hundreds
of micro-hydropower plants in
off-grid areas of Khyber Pakthunkhwa
(KPK), and 2330 MW of solar
capacity in Punjab by 2026 under its
project Access to Clean Energy Investment
Programme.
In its 2018 Sustainability Report, the
ADB said that the Access to Clean
Energy Investment Programme, approved
in 2016, is anticipated to benefit
about 240 000 households.
The programme will be implemented
over a period of 5-10 years and will
support the provincial governments of
KPK and Punjab to achieve increased
access to sustainable and more reliable
electricity services for vulnerable
communities.
It will see the establishment of renewable
power plants including the
construction of 1000 micro-hydropower
plants and rooftop solar panels
for 23 000 schools and over 2500 primary
healthcare facilities in two provinces
and a university in Bahawalpur,
Punjab.
The loan is part of ADB’s commitment
announced last year to double its
annual climate financing to $6 billion
for Asia-Pacific by 2020.
Pakistan also received a $500 million
loan from the World Bank in June
to support two projects to support renewable
energy in Sindh and expand
economic activity between Pakistan
and Afghanistan through the development
of an economic corridor along
the Khyber Pass.
It will support independent power
producers to develop 400 MW of new
solar power capacity (starting with an
initial 50 MW pilot project) and provide
partial grants to private sector
firms for the commercial provision of
Solar Home Systems to about 200 000
households.
“The projects will address Sindh’s
energy needs through the generation
of solar power, benefitting the entire
province and support trade between
Pakistan and Afghanistan through
regional connectivity and private sector
development along the Khyber
Pass corridor,” said World Bank
Country Director for Pakistan, Illango
Patchamuthu.
Meanwhile, the ADB has also announced
loans to support projects in
Indonesia. The bank recently extended
$40.2 million in financing to Singapore
based renewable power producer
Vena Energy, formerly Equis Energy.
Four of Vena’s subsidiaries will use the
funds to build two PV plants with a
combined capacity of 42 MW.
The ADB said the loan is part of a
portfolio of financing totalling approximately
$160 million, of which
$120.8 million was granted to a 72 MW
wind power project in Jeneponto,
South Sulawesi.
6
THE ENERGY INDUSTRY TIMES - JULY 2018
Asia News
n Cap on distributed solar PV
n Carbon emissions on track to rise at fastest pace in more than seven years
Spotlight on solar as Vietnam Master Plan questioned
ADB supports renewables
expansions
Syed Ali
China’s new solar photovoltaic (PV)
policy, aimed at rationalising capacity
growth, might not only slow the country’s
solar PV market but could also
jeopardise efforts to stem rising carbon
emissions.
The policy, which comes as a shock
to the industry, suspends approving
new, subsidised utility-scale PV power
stations in 2018. It also caps the amount
of distributed projects at 10 GW. In
addition, all utility-scale projects are
mandated to set power prices through
competitive auctions with regional authorities
ordered to suspend arrangements
for plants that require any state
subsidies.
The notice published by the National
Development and Reform
Commission, the Ministry of Finance
and the National Energy Administration,
also reduces feed-in tariffs (FITs)
for new distributed solar PV projects
by CNY0.05/kWh ($0.008/kWh)) to
CNY0.32/kWh.
Commenting on the new policy,
Wood Mackenzie Principal Consultant,
Frank Yu said: “Our initial analysis
shows that China can now add
only around 30 GW of capacity in
2018 under the policy, some 20 GW
less compared with our existing view.
The slower pace of capacity builds is
likely to reduce curtailment and improve
cash flows with faster subsidy
payment clearance.”
It said, however, that despite the
turmoil, the unexpectedly tough policy
does have its merits, noting that it
will allow the government to ease the
growing fiscal burden of renewable
energy subsidies.
The government also announced that
future wind tariffs will be determined
by a bidding process, with a gradual
elimination of government subsidies.
S&P Global Ratings believes the
reform would be negative for wind
farm operators but says most major
players should be able to absorb the
impact.
“We’re not surprised that the government
has taken this action. The steps
encourage industry-wide cost efficiency,
address the ever-widening funding
shortfall for subsidies, and guide the
sector to grow in a more sustainable
way,” said S&P Global Ratings credit
analyst Apple Li.
The cuts in renewable subsidies come
as a Greenpeace analysis, based on
Beijing’s own data, reported China’s
carbon emissions are on track to rise at
their fastest pace in more than seven
years.
Although China has invested heavily
in renewable energy such as wind and
solar, a key reason for its emissions
growth is rising demand for oil and gas
due to increased car ownership and
electricity demand.
Pointing to Chinese planning data
that indicated the country’s consumption
of coal, oil and gas would grow
this year, Niklas Höhne, a partner at
the New Climate Institute and one of
the scientists who contributes to the
Intergovernmental Panel on Climate
Change report said: “The outlook for
2018 is actually bad.”
Glen Peters, research director at Cicero,
the Norwegian climate research
institute, predicted that China’s emissions
would see “low positive growth”
this year of up to 3 per cent. “If the
economy is going to grow at 6, 7 or 8
per cent, then it is pretty hard for emissions
to go down,” he said.
The country’s ongoing nuclear programme
should, however, go some
way to reversing the growth in emissions.
According to reports, the Taishan
reactor, which will be the first EPR to
enter commercial operation, reached
first criticality on June 6th.
Further, in June Russian and Chinese
nuclear executives signed the biggest
package of contracts in the history of
the two countries’ nuclear partnership.
The package consists of four deals including
the construction of four Gen
3+ VVER-1200 units (at the Xudabao
and Tianwan sites).