China solar installations to slow as subsidy cuts bite - exec

Dynasty Digital Holdings

06/09/2019 03:58

By David Stanway
    FUXIAN LAKE, China, Sept 6 (Reuters) - China's new
installations of solar power are expected to slow considerably
this year and over the next five years as the industry comes to
terms with a new subsidy-free era, the chief executive of a
leading domestic solar manufacturer told Reuters.
    "I think from now until 2025 we are probably looking at
20-25 gigawatts (GW) per year," Eric Luo of GCL System
Integration Technology (GCL)  002506.SZ  said on the sidelines
of the Fortune Sustainability forum in the southwest province of
Yunnan. "It is purely market driven."
    China's new solar installations hit a record 53 GW in 2017,
but slowed to 41 GW in 2018 after the government announced a
massive scaling-back of subsidies in order to ease pressures on
the transmission system and reduce a subsidy payment backlog
estimated at more than 100 billion yuan ($14 billion).
    New additions hit 11.4 GW in the first half of this year,
and Luo said it was highly unlikely that would increase in the
second half.
    Most new installations in 2019 have been unsubsidised, and
that was now the industry norm, he said.        
    Falling domestic installations have raised fears of
overcapacity among solar equipment manufacturers, with volumes
still rising, but Luo said the additional production could be
absorbed by a 25% annual increase in overseas demand.
     He estimated global demand for solar equipment would reach
115-120 gigawatts this year, including around 25 GW of domestic
Chinese demand. That compares with around 80 GW two years ago.
    GCL and others are taking advantage of a global boom that
could bring the share of renewables in the world's total
generation capacity to 80% by 2050, according to Norwegian
energy firm Statkraft.   
    The transformation will be driven by the shift to new energy
vehicles, the spread of power transmission systems in China and
elsewhere and further declines in manufacturing and installation
costs, the company said in a report released on Friday.
    While China, the world's biggest energy consumer, is still
building new coal-fired power stations, these concentrate
emissions and allow for controls to be implemented, compared
with, for example, families directly burning coal for heating,
Statkraft chief executive, Christian Rynning-Tonnesen told
Reuters.
    They also pave the way for a switch to renewables at a later
date.
    GCL's Luo said lower solar costs made solar a more feasible
proposition, especially in undeveloped countries. 
    "There is no economic feasibility to install coal or natural
gas power plants. There is a resource shortage and no one wants
to invest in traditional energy," he said.

($1 = 7.1468 yuan)

 (Reporting by David Stanway; editing by Richard Pullin)
 ((david.stanway@thomsonreuters.com; +86 21 2083 0066; Reuters
Messaging: david.stanway.thomsonreuters.com@reuters.net))