China, the world’s biggest clean-energy investor, lowered its solar and wind power targets for 2020, a reflection of how record installations of renewables have overwhelmed the ability of the nation’s grid to absorb the new electricity.
China is now aiming for 110 gigawatts of solar power by 2020, a 27 percent reduction from an earlier target, according to a webcast posted on the website of the National Energy Administration that cited the agency’s chief engineer, Han Shui. The nation reduced its goal for wind power by 16 percent to 210 gigawatts.
While China has poured billions of dollars into clean energy in recent years, the ability to deliver the newly-generated electricity from where it’s produced to where it’s needed has lagged. The mismatch has left solar and wind capacity sitting idle in some parts of the country, hurting companies such as China Longyuan Power Group Corp. and China Datang Corp. Renewable Power Co.
The Global Large Solar Energy Valuation Peers index, which counts many Chinese manufacturers among its 20 members, has slumped 42 percent this year.
“The target reduction, which was largely expected by the solar industry, comes at a time when concerns about oversupply are pressuring solar stocks,” analysts Ben Kallo and Tyler Frank of Robert W. Baird & Co. wrote in a Nov. 7 note. “Utility-scale projects will likely be most affected, and rooftop remains a potential source of upside.”
The government earlier expected to have 150 gigawatts of solar power and 250 gigawatts of wind by 2020, PVnews.cn reported last year, citing Zhu Ming, deputy director of renewable energy department at the NEA.
The lower targets were immediately criticized by some environmental groups who said the new goals aren’t good enough.
The “wind power capacity targets do not reflect the reality of the sector’s growth and solar targets fail to expand the sector beyond its record 2015 growth,” Greenpeace East Asia said in an e-mailed statement.
“Given the urgency of combating air pollution and climate change, we would expect the government to accelerate investments in clean energy, rather than stabilize or slow down,” Greenpeace said.
Since 2012, solar capacity has surged more than seven-fold, while wind has almost doubled amid a push by China to generate 15 percent of its power from renewable energy and nuclear by 2020, according to data compiled by Bloomberg.
The rapid growth in capacity has left China struggling to integrate power supplies from renewable sources even as the government continues to promote clean energy as an alternative to more polluting fuels like coal and natural gas.
China idled 33.9 billion kilowatt-hours of wind power last year, up 69 percent from a year earlier, the NEA said in August. Idled capacity at solar farms has also begun to appear, especially in the nation’s northwest, it said.
Still, even with the lowered ambitions, China is due to see a surge in new clean-energy capacity. Solar will more than double by 2020 from 2015 levels, while wind will increase by 50 percent, according to Bloomberg New Energy Finance data.
©2016 Bloomberg News
Lead image credit: energy.gov