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China’s solar ambition: how the country is pushing for fossil-free

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Sunshine on solar panels, Shanghai, China

China’s National Energy Administration (NEA) recently released its annual plan of solar installation for 2015, encouragingly aiming for 17.8 GW. If it reaches its goal, it would be able to generate enough electricity to power the equivalent of 2.9 million US households – all through clean, renewable energy.

This ambitious move is also not easy for China, since annual solar installation in 2014 was just 10.6 GW. China very seldom under-delivers its renewable energy development targets, but last year the country failed to reach its annual solar target of 14 GW by a large margin.

So what went wrong? There are a number of reasons for the shortfall – the delay of policy roll-out and insufficient messages delivered to key stakeholders played a role, while the slow-down of China’s economic growth also lead to concerns among investors around an over-supply of power generation capacity.

Additionally, the current regulation framework of wind power has not solved the problem of curtailment – where wind farms are forced to waste power they have generated because the electricity is prevented from feeding into the grid. Will solar face the same challenge?

Renewable ambition

The delayed installation of solar is due to a delayed response to policy roll-out, and that also explains the exceptionally high target China has set for 2015. By taking that factor out, China’s new and additional solar target is around 14 GW. That is still much higher than national government’s targets for 2013-2015 at 10GW each year, and this is the target that enables the sustainable development of the solar industry in China.

The utilization rate of China’s power generation capacity was historically low last year, particularly for coal-fired power plants. This is largely due to the “new normal” of economic development, characterized by economic structure and sectoral slow-down particularly in energy/carbon intensive industries.

However, political resolution and policy incentives remain robust for China’s energy transition towards cleaner and zero carbon energy. Non-fossil fuel use increased remarkably – over 30% – and the largest share of that increase comes from renewable energy.

Currently, one of China’s every 5 kWh of electric power is from hydro power, and electricity generated by solar power was about 3 times larger than in 2013. Even with wind resources not so favorable in 2014, China invested quite some effort into addressing the curtailment challenge, making the problem much smaller than before.

Towards a fossil-free future

Wind farm near Hujifumo in Heilongjiang Province, China

While we should applaud China’s continued ambition on solar, policy framework still needs further improvement. NEA introduced more than 10 pieces of policies to support distributed solar PV development in 2014, which almost covers the whole chain of solar power generation.

However, there was a significant delay not only in project development, but also in the financing stage. Furthermore, the supportive measures have not fully resolved the challenges yet. In order to set a solid cornerstone for renewable energy scale-up, leveling the playing ground for renewable energy vs. fossil fuels is the most significant and necessary step for steady and ambitious long-term energy transition.

Less than one week after NEA released its 2015 solar target, it issued an administrative document to require sub-national governments and power companies to ensure the electric power system utilizes more clean energy.

This document came along at a time when the documentary “Under the Dome” ignited nation-wide awareness on air pollution and the problems with fossil fuel burning, and it also marks the start for another round of electric power system reform, hopefully leading to greater economic efficiency and environmental integrity.

2015 is going to be a fascinating year for China’s energy transition. Let’s keep our fingers crossed it’s a good year for renewables.

Liangchun Deng is the Policy Program Manager for Climate and Energy for WWF China. This post was also contributed to by Ang Li, a consultant for the Climate and Energy Programme for WWF China. LCHDeng@wwfchina.org.

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