China’s National Energy Administration (NEA) has reportedly increased the 2014 target for new solar PV capacity installations to 14GW – up from its previous target of 12GW.
The increase was noted by Deutsche Bank analysts, who said the target represents a near 50 per cent increase on the actual capacity installation of 9.5GW of solar PV in 2013.
Chinese officials had previously said that two thirds (8GW) of the 2014 target would come from distributed solar PV (on rooftops or in smaller arrays close to consumption), but it is not clear what the percentage is in the new target.
Earlier this month, Deutsche Bank said surging demand in China, Japan and the US would underpin a “second solar gold rush”. It tipped global installations to rise to 46GW in 2014 (based on the previous 12GW target for China), and to 56GW in 2015.
China is expected to be by far the largest installer of solar PV, followed by Japan, US and Europe, each with around 8GW.
Giles Parkinson is the founding editor of RenewEconomy.com.au, an Australian-based website that provides news and analysis on cleantech, carbon, and climate issues. Giles is based in Sydney and is watching the (slow, but quickening) transformation of Australia’s energy grid with great interest.
Chinese state news has announced that the country’s on-grid solar power capacity will reach 10 GW by the end of 2013, a 200% increase from a year ago, based on figures forecast by the National Energy Administration.
The total energy generation capacity of the Chinese power grid is expected to reach 1,235 GW by the end of this year, with solar’s 10 GW helping to reduce the thermal energy share to 69.9% — down from 2012′s 71.5%, despite overall growth. Hydro power is expected to make up 25.5%, on-grid wind power 6.1%, and nuclear power 1.2%.
The state news agency Xinhua noted that, “China has taken a number of measures, including increasing investment in clean energy to boost the share of non-fossil fuels in its power structure.”
NPD Solarbuzz projected in August of this year that China would top PV deployment in 2013, predicting that the combined demand from China and Japan was expected to reach 9 GW in the second half of 2013.
“The record level of PV shipments to China and Japan coincides with corporate margins returning to positive territory and the final shakeout phase of uncompetitive manufacturers nearing completion,” said Finlay Colville, vice president, NPD Solarbuzz.
“Having entered 2013 with a highly cautious outlook, tier-one suppliers are poised to exit the year with restored confidence, ahead of optimistic shipment and margin guidance for 2014.”
In July of this year, China also stated they intended to to add 10 GW of solar power a year over the next three years, boosting the country’s solar capacity up to at least 35 GW by 2015. China also recently announced that it intended to stretch its distributed-solar capacity target to 20 GW by the same time. In early 2011, China’s 2015 solar PV capacity target was just 5 GW.
Joshua S Hill I’m a Christian, a nerd, a geek, a liberal left-winger, and believe that we’re pretty quickly directing planet-Earth into hell in a handbasket! I work as Associate Editor for the Important Media Network and write for CleanTechnica and Planetsave. I also write for Fantasy Book Review (.co.uk), Amazing Stories, the Stabley Times and Medium. I love words with a passion, both creating them and reading them.
When it comes to global electricity generation, coal is still king – but not for long
Fast-changing economics mean renewable energy worldwide will represent 34% of all installed capacity by 2030, according to the World Energy Perspective: Cost of Energy Technologies — a report from the World Energy Council (WEC) and Bloomberg New Energy Finance (BNEF).
The report finds many clean energy technologies are already cost competitive with fossil fuels and only getting cheaper, echoing another analysis that found US wind and solar costs fell 50% since 2008. As a result, fossil fuel’s slice of the world energy pie is projected to fall fast, from 67% in 2012 to 40%-45% in 2030.
Falling Renewable LCOE Powers Clean Energy Surge
Vast differences in the cost of building and generating power exist across the globe, but one trend is clear – the levelized cost of electricity (LCOE) continues to fall for mature renewable energy technologies, placing them close to grid parity with fossil fuels. In addition, the cost of producing power from renewables fall continue at a rate related to the level of usage, a trend known as the “experience curve.”
Our study finds that although fossil fuels continue to dominate, renewable energy and the investment appetite for them are growing.
With wider deployment the price of renewables will fall, reducing the risk for investors, and we expect to see greater uptake over the years. — Guy Turner, Chief Economist at BNEF.
The WEC report uses several cost metrics exist to evaluate power generation including capital expenditures, operating expenditures, and capacity factor, but LCOE stands as arguably the most important indicator of renewable energy’s value because it’s the only one that evaluates the total lifecycle costs of producing a megawatt hour (MWh) of power.
LCOE is best explained as the price a project must earn per MWh in order to break even on investment and considers cash flow timing, development and construction, long-term debt, and tax implications to equally evaluate all energy technologies on an equal basis in terms of their actual costs.
But most importantly, LCOE underlines the ascendance of renewable energy across the world – especially wind and solar.
Wind Power Gusts Ahead
Wind power has already become the largest non-hydro renewable electricity source and is projected to more than triple from 5% of global installed capacity in 2012 to 17% by 2030, breezing past large hydropower. From 2000-2010 global onshore and offshore wind capacity increased 30% per year, reaching 200GW installed in 2010.
Onshore wind’s LCOE has fallen 18% since 2009 on the strength of cheaper construction costs and higher capacity factors.
Turbine costs have fallen nearly 30% since 2008, outpacing the traditional experience curve.
The LCOE for onshore wind is cheapest in India and China, running between $47-$113 and making well-sited wind farms in these countries among the cheapest in the world – an incredibly important factor considering their surging demand for power is currently being met by coal.
The LCOE picture isn’t as clearly defined for offshore wind, as 95% of the world’s 4GW installed offshore wind capacity is located in European waters.
By 2020 installed capacity growth in Asia will surge, offsetting Europe’s dominance with 40% of all installed annual capacity – China alone will have 30% of all new capacity. As more offshore wind comes online in different markets, LCOE will become clearer.
Solar’s Remarkable Shine
But if wind’s LCOE drop has been steady, solar energy’s has been meteoric.
The WEC reports feed-in tariffs and plummeting photovoltaic module prices make solar competitive with most forms of power generation – in some markets with expensive power, like Germany, businesses with installed solar now find using their generated power more profitable than selling it to the grid.
As a result, solar power’s worldwide capacity will absolutely boom, growing from 2% of installed capacity in 2012 to 16% by 2030. China and Japan will be biggest beneficiary of solar’s rise, with China set to exceed 50GW installed solar by 2020.
The WEC’s forecast for solar power is incredible, but even this outlook is underestimates solar’s clean energy potential, because it only includes projects above 1 megawatt in capacity – completely ignoring the spread of small-scale rooftop solar and the rise of distributed generation
Fossil Fuel’s Achilles Heel: Operational Costs
In spite of falling renewable costs, fossil fuel generation is still cheaper in most regards, except for one – the price of operation.
This trend is most clearly seen in developed nations like Western Europe, America, and Australia, where the WEC says the potential for significant amounts of new coal generation to come online is low.
Today, developing nations buck this trend and coal is a growing generation source in Brazil, China, and India. In fact low capital costs make China the cheapest country to generate power from coal, less than half the LCOE in Europe or the US.
Put it all together, and it’s clear to see global energy economics are changing fast.
While coal still dominates global electricity production, renewables are catching up with net investment growing seven-fold from 2004-2011, outpacing fossil fuels for the second year in a row in 2012. And as more renewables come online, their costs continue to fall faster and faster from larger economies of scale.
The cost of most technologies, and most dramatically that of solar PV, is coming down with production scale-up in many areas of the world.
With such growth, grid parity will become reality in the coming years. — Dr. Christoph Frei, World Energy Council Secretary General
A recent Ernst & Young (EY) study found that the global cleantech sector grew a staggering $26 billion in the last fiscal year.
The study analyzed 424 companies that got more than half of their value from the clean energy business. It found that these 424 companies employed 512,500 people and together had a market capitalization of $170 billion in April 2013, 18% higher than the same time the previous fiscal year.
The report, Cleantech Industry Performance 2013, highlighted clean energy growth in the Asia-Pacific region as a key reason for the strong upturn. This is certainly where solar power growth is booming right now, helping the global solar market to get going in a positive direction again.
“Globally, the cleantech sector saw the creation of 68 new PPP companies and lost 63 companies in 2012,” EY wrote in a news release about the new report. “The Asia-Pacific region was the main winner, increasing 16% to 177 companies, while the company population in Europe, Middle East and Africa (EMEA) contracted by 8% to 135 companies. The US and China remain the leading countries in terms of PPP companies, with 70 and 64, respectively.”
Energy Efficiency Sector Growing Strong
In terms of cleantech sectors, the energy efficiency sector was a key growth sector on the stock market. The number of companies grew 14%, reaching 50 in total. Their combined market capitalization grew 25%, hitting $34.6 billion.
Renewable Energy Sector Rebounding
In the renewable energy space, the number of companies grew 14% to 32 in total. Their combined market capitalization increased 8%, reaching $25.5 billion. And their combined revenue increased 23%, totaling $11.1 billion. “The renewable energy sector showed important signs of recovery as generation companies showed across the board gains, benefitting from lower equipment costs,” EY wrote.
Here are more details on the wind, solar, and biofuels sectors:
While the number of wind equipment companies fell by 2% to 53, market capitalization increased by 2% to US$30.8b and revenues increased 14% to US$35.3b. The picture for solar is more mixed, with the number of solar equipment companies falling by 2% but market capitalization up 14% to US$28.8b; however, solar revenues declined by 16% to US$42.5b.
Biofuels also experienced significant growth in 2012 as the number of companies in the segment increased 8% to 41, market capitalization shot up 25% to US$13.1b and revenues grew 14% to US$26.0b.
“The cleantech sector globally has shifted to growth. Resource scarcity, energy security concerns, population growth and increasing consumption, by expanding middle classes in emerging markets, will continue to drive this cleantech market growth,” Gil Forer, EY’s Global Cleantech Leader said. “China is consolidating its position as the most important cleantech market and is poised to overtake the US as the number one center for public cleantech companies.”
Zachary Shahan is the director of CleanTechnica, the most popular cleantech-focused website in the world, and Planetsave, a world-leading green and science news site. He has been covering green news of various sorts since 2008, and he has been especially focused on solar energy, electric vehicles, and wind energy for the past four years or so. Aside from his work on CleanTechnica and Planetsave, he’s the Network Manager for their parent organization – Important Media – and he’s the Owner/Founder of Solar Love, EV Obsession, and Bikocity. To connect with Zach on some of your favorite social networks, go to ZacharyShahan.com and click on the relevant buttons.
China’s Bureau of Energy has announced a designated group of Distributed PV Generation Application Demonstration parks. This focus on self-consumption of photovoltaic solar power generation by the Bureau of Energy moves China in a clear direction. Over 1.8 GW of solar PV pipeline was approved (out of which up to 750 MW may begin construction in 2013).
The rooftop segment of the Chinese PV market, along with the desired supply pipelines, will expedite completion of the remarkable renewable energy plans.
Steven Han from Solarbuzz has more regarding this noteworthy news from China:
Until now, financing and tariff distribution timeliness have been major barriers for developer groups. Sources say that additional policies will be established in the second half of year to lower these barriers.
All sixteen commercial developer groups and two utility developer groups can now receive FITs of CNY 0.42/kWh, in addition to the desulfurization tariff. In some regions, such as Jiangsu and Anhui, developer groups can also receive extra rebates.
Everyone in the solar industry is keeping a close eye on China. The country has very ambitious solar PV growth plans, and it has increased those on a number of occasions. From small-scale solar to utility-scale solar projects, China is sailing forward with solar PV.
Cynthia Shahan is an Organic Farmer, Classical Homeopath, Art Teacher, Creative Writer, Anthropologist, Natural Medicine Activist, Journalist, and mother of four unconditionally loving spirits, teachers, and environmentally conscious beings who have lit the way for me for decades.