Abandoned Wind Abandoned Light Problem Should Be Solved As Soon As Possible To Change The Wind Photovoltaic Subsidies

- Dec 01, 2017 -

In recent years, the development of China's new energy industry has attracted worldwide attention. By the end of 2012, China had installed 61 GW of wind power and 3.4 GW of installed photovoltaic power. The total annual production of wind power totaled 106.6 billion kWh, accounting for 2.1% of the total generating capacity. As of the end of 2016, the installed capacity of wind power in China reached 149GW and the installed capacity of photovoltaic power reached 77GW, generating an annual total of 307.2 billion kWh, accounting for 5.1% of the total power generation. China's landscape installed capacity has ranked first in the world, large-scale industrial applications contributed to a substantial cost reduction. Take photovoltaic as an example. The price of PV modules in 2007 was around 30 yuan / W, down to 10 yuan / W in 2012 and the latest price in 2017 was as low as 2 yuan / W. Simple calculation of the domestic market, equivalent to doubling the cumulative installed capacity, product cost reduction of 35%. The cost advantages also make China's wind power and PV manufacturing industry a leader in the world's new energy market.

The achievements of China's new energy development fully demonstrate that the feed-in tariff subsidy policy is effective. The biggest advantage of the feed-in tariff policy is that it can anchor the entire life cycle of power generation products, give investors a clear price information, and effectively support the start-up during the initial stage of the development of a new industry.

With the dramatic expansion of scenery installed capacity, the total new energy subsidies are also rapidly increasing. Compared with 2012 and 2016, the total amount of scenery subsidy calculated by the average on-grid electricity price was about 60 billion yuan in 2012 and expanded to 180 billion yuan by 2016. Although the state slightly reduced the level of landscape subsidies several times during this period, the total amount of subsidies continued to expand rapidly following the scale. In theory, the subsidy for new energy should be compensated by the renewable energy surcharge levied at the sales price. In 2012, China's renewable surcharge was 0.015 yuan / kWh, up to 0.019 yuan / kWh in 2016. Based on this calculation, there will be a surplus of 15 billion yuan in the "New Energy Subsidy" account in 2012 and a deficit of about 70 billion yuan by 2016. Based on this, there was an appeal in 2016 to raise the issue of renewables to a third of a penny, but even then this could only be roughly balanced by 2016. However, China's PV installed capacity increased substantially in 2017, 42GW completed in just nine months, bringing the subsidy demand of nearly 30 billion yuan. In addition, due to the instability of new energy power generation, its consumption will also bring to the grid costs (such as stability, etc.) increase, although this part of the cost is difficult to clearly calculate, but with the proportion of new energy power generation may also be Bigger "subsidies."

Therefore, the expansion of new energy will inevitably bring about a rapid increase in subsidies. Different solutions lead to two phenomena: one is the rapid growth of sales electricity price (eg Germany); the other is that maintaining high subsidies (China) is hard to restrain the inefficient installation of machines and the abandonment of wind and discarding of light is unavoidable.

The rapid growth of renewable energy in Germany has led to a significant rise in electricity prices, which nearly doubled in a decade, making Germany one of the most expensive in Europe. Among them, the largest part of the increase is renewable addition, the current German renewable surcharge of nearly 0.8 yuan, only this one is equivalent to China's average sales price. The rise of electricity price has caused considerable negative impact on economic development and people's livelihood in Germany, which has led to a great opposition. Therefore, the development of new energy in Germany has been rapidly decelerated in the past two years. As the annual installed capacity of scenery fell below 10GW, the world was rapidly emerging Energy development leader position.

Of course, the abandonment of wind in China largely stems from the imbalance in China's energy endowment. However, the concentration of new-energy power generation in the western part of China is limited but the capacity of wind power photovoltaic is limited. Taking into account the actual situation of China's power market, electricity market will be a longer process. In this way, despite the government's efforts, if the installed capacity of new energy sources increases rapidly, the relatively large abandonment of wind and light will be objective. Therefore, at this stage, the government should consider reducing subsidies for new energy and power generation, changing subsidies and industrial chain nodes, and striving to eliminate subsidies as soon as possible.

First, subsidies are, after all, temporary and unsustainable, and as the share of new energy subsidies increases rapidly and rapidly, the burden of subsidies inevitably leads to the reduction and cancellation of subsidies. In any industry, it is difficult to rely on the subsidy program for long-term development. As the cost of wind power photovoltaic has dropped drastically, the marginal stimulus effect of subsidies on its development has been greatly reduced. Under the background of carbon emission restriction, it is more effective to promote the development of new energy by implementing environmental taxes, carbon trading and carbon taxes on traditional energy generation. In this way, the development of thermal power can be restricted by marketization measures, the marketization of electric power can be realized, the competition of various power generation varieties can be realized, and the optimization of resources can be more beneficial to improve the efficiency of the entire power industry. The Chinese government can learn from Germany by issuing a clear schedule for the reduction and exit of subsidies ahead of schedule and giving the market a certainty of anticipation so as to curb the rush-buying and other acts.

Second, under the background of short-term power surplus, reducing subsidies in time according to the reduction of installed costs can inhibit inefficient installation. Reducing and scrapping subsidies can force wind power PV manufacturers and generation investors to take the initiative to reduce costs and encourage them to choose more economical projects. In particular, before the project can be more in-depth study of the project to solve the problem of how to better achieve the combination of electricity generation and electricity to ensure project returns. Improve the abandonment of light Abandoned the status quo must be economic means, for photovoltaic power generation "supply-side reform" to improve its power generation investment efficiency.

Third, reduced subsidies for new energy sources can be partially used to address grid disruptions and business model innovations. As for the development of new energy sources, the cost of power grids is a problem that can not be circumvented. As the proportion of scenery increases, the cost of power grids will increase substantially. Intelligent power grids are the main way to reduce the cost of power grids. The government can help solve some of the technical innovations in power grids the cost of. In addition, to solve the abandonment of wind and light, the emerging energy storage, micro-grid, demand-side response and other business models also need early access to policy support.

Edit: NdFeB Industry Network

href Finally, subsidies need to be used to support further technological advances and innovations in the new energy itself. Only the cost reduction brought about by technological progress is permanent. The 21st century will inevitably be the century of development of new energy sources. There is consensus here. However, a few decades later, the cleantech route to solving the human energy needs may not necessarily be the dominant mode now. The research and development of new energy sources and new technological advances still need adequate financial support. In recent years, some new energy technology routes have been suppressed by cost factors and require the initial period of government subsidies to support development.

We say that good steel should be used on the knife edge. China's new energy industry has entered a stage of growth and expansion. The government's subsidy policy can also have greater and more flexible operational space. The government needs to make better decisions on subsidies and solve the problem of new energy development in the long run.

Source: China Battery Network

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