China retains its position as most attractive renewable energy market

Image source:

Despite subsidy cuts which dramatically stalled the growth of solar installations, China retained the global distinction as the most attractive renewable energy market in 2019, according to EY’s latest Renewable Energy Country Attractiveness Index (RECAI) report.

The report, which ranks 40 countries on the attractiveness of their renewable energy investment and deployment opportunities, found that whilst policy-makers in China have reversed course on some of their harshest moves to slow the sector, they are also moving forward with measures to encourage subsidy-free development, demonstrating the growing viability of clean energy technologies.

By the end of 2018, China accounted for 35% of global solar capacity, with 172GW, and 32% of total wind capacity, with 181GW.

Fitch Solutions estimates that solar capacity will grow at an annual average of 36GW between 2019 and 2028, whilst wind will grow at an average of 23GW/year.

According to Citigroup, China is expected to allocate around $400m (RMB3b) of subsidies to solar projects in 2019, and it forecasts 42GW of new capacity under its base case, with the potential to rise to 50GW.

Meanwhile, the Chinese government reportedly continues to support wind energy through its FiT regime, although rates are continuing to decline. Since 2017, the tariffs have decreased by 5% to 15%, depending on an area’s wind resource. Authorities are also actively supporting its offshore wind sector, which continues to qualify for attractive subsidies.

The government is also promoting subsidy-free renewables projects as technology costs fall, EY noted, with the National Energy Administration (NEA) proposing to set up an auction system, backed by 20-year offtake contracts, guaranteed grid connections, lower transmission fees, protection against curtailment, and eligibility for an expanded green certificate program, amongst other things.

EY further noted that one landmark planned project is the giant 6GW Ulanqab Wind Power Base, which is a series of wind farms in Inner Mongolia under development by the State Power Investment Corporation at a cost of $6.3b (RMB42.5b). The scheme will supply power to the 2022 Winter Olympics, to be held in Beijing and neighbouring Hebei province.

Another landmark development is the country’s first large, concentrated solar power and energy storage project, at 100MW and 390GWh, using a 260m-tall tower on the fringes of the Gobi Desert.

To date, foreign investors have had little involvement in China’s renewables sector, with overseas investment accounting for less than 1% of the total, EY noted. However, improved market practices and transparency are tempting investors back, this time into renewables.



Please enter your comment!
Please enter your name here