9 CHINA’S PROMOTION OF WIND AND SOLAR POWER …
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the targets of increasing installed capacity of wind power by 63% to 210
GW, and that of solar PV by 144% to 105 GW by 2020. In terms of
promoting the production of solar and wind power, the government has
been adjusting its policy prioritization from time to time, with variations
in targeted growth areas, subsidy amount, on-grid tariffs and other financial incentives for the two types of renewables, which will profoundly
change the current structure of the electricity market in the long run.
Since an economic slowdown in China has been exacerbating the issue
of excess industrial capacity, more domestic equipment suppliers in the
wind and solar sectors are expected to be pushed to the edge of collapse
without robust governmental subsidization of domestic solar PV and
wind power generation. As indicated in the case of interactions between
China’s wind energy industrial policy and wind power generation policy
(Zhang et al. 2013, pp. 342–353), there should also be a natural affinity
between the country’s solar PV manufacturing policy and solar power
generation policy, in which the improved competitiveness and capabilities of the manufacturers of solar PV equipment, components and parts
result in lower costs for the installation and generation of solar power, and
meanwhile, the development, generation and consumption of solar power
are conducive to enhancing solar panel manufacturing competitiveness
by providing a sustainable and stale domestic market demand. Thanks
to massive government subsidies flowing to renewable energy sectors
in recent years, China’s wind turbine and solar PV manufacturers have
gained competitive advantages over their foreign rivals and thus grown
dramatically to leading positions in the world.
However, the huge investment of about 2.5 trillion yuan ($361
billion) plowed into renewable power generation between 2016 and 2020
(Reuters 2017) may bring about huge waste and inefficiency if the renewable energy developers fail to take into account industrial bottlenecks
caused by uneven geographic distribution of renewable sources, grid
constraint and policy disruptions from other local interest groups. Weak
external renewable equipment demand and severe internal overcapacity
have forced China’s energy planners to make more efforts to develop
domestic low-carbon power sectors. Therefore, it’s likely that the central
government in the next few years will take concrete actions to gradually
absorb redundant local power capacity by building more UHV transmission networks, incentivizing local grid companies to purchase power from
renewable power plants and installing more solar panels and wind turbines
in coastal provinces.
219
the targets of increasing installed capacity of wind power by 63% to 210
GW, and that of solar PV by 144% to 105 GW by 2020. In terms of
promoting the production of solar and wind power, the government has
been adjusting its policy prioritization from time to time, with variations
in targeted growth areas, subsidy amount, on-grid tariffs and other financial incentives for the two types of renewables, which will profoundly
change the current structure of the electricity market in the long run.
Since an economic slowdown in China has been exacerbating the issue
of excess industrial capacity, more domestic equipment suppliers in the
wind and solar sectors are expected to be pushed to the edge of collapse
without robust governmental subsidization of domestic solar PV and
wind power generation. As indicated in the case of interactions between
China’s wind energy industrial policy and wind power generation policy
(Zhang et al. 2013, pp. 342–353), there should also be a natural affinity
between the country’s solar PV manufacturing policy and solar power
generation policy, in which the improved competitiveness and capabilities of the manufacturers of solar PV equipment, components and parts
result in lower costs for the installation and generation of solar power, and
meanwhile, the development, generation and consumption of solar power
are conducive to enhancing solar panel manufacturing competitiveness
by providing a sustainable and stale domestic market demand. Thanks
to massive government subsidies flowing to renewable energy sectors
in recent years, China’s wind turbine and solar PV manufacturers have
gained competitive advantages over their foreign rivals and thus grown
dramatically to leading positions in the world.
However, the huge investment of about 2.5 trillion yuan ($361
billion) plowed into renewable power generation between 2016 and 2020
(Reuters 2017) may bring about huge waste and inefficiency if the renewable energy developers fail to take into account industrial bottlenecks
caused by uneven geographic distribution of renewable sources, grid
constraint and policy disruptions from other local interest groups. Weak
external renewable equipment demand and severe internal overcapacity
have forced China’s energy planners to make more efforts to develop
domestic low-carbon power sectors. Therefore, it’s likely that the central
government in the next few years will take concrete actions to gradually
absorb redundant local power capacity by building more UHV transmission networks, incentivizing local grid companies to purchase power from
renewable power plants and installing more solar panels and wind turbines
in coastal provinces.