News & Events

JUL
02
2020

A bright future for China

Renewable Energy in Asia after Covid-19

CHINA by Caris Chan, Market Director

COVID-19 has hit hard and incredibly fast everywhere, and it looks like we are going to be living with the consequences for some time. But despite the damage, the delay's, the social, economic, and human impact, there are grounds for optimism and a chance, in this next phase, for a renewed drive towards a renewable future.

 

Solar, wind and hydro prove resilient during COVID-19 crisis

According to a recent study published by the International Energy Agency (IEA), ‘renewables are the only energy source likely to experience demand growth across the remainder of 2020 regardless of the length of lockdown or strength of recovery’.

That the IEA should publish this finding is remarkable, if not surprising to those working in the energy industry today. Renewables are set to thrive despite the old, but the still vocal, argument against them; that solar and wind are intermittent and therefore cannot serve in an energy-on-demand basis in the way that nuclear and fossil fuels can.

COVID-19 has exposed the short-sightedness of that argument, the fast-growing value of renewables in the energy mix, and the inherent weakness of traditional energies. While ‘intermittence’ was the stick used to beat wind and solar, we can now rightly point to the inability of coal, oil, and gas to scale.

The IEA report predicts that annual energy demand could drop by 6% in 2020, wiping off the last five years of demand growth.

  • Due to the fall in demand, coal-generated power will decrease by more than 10%
  • Gas by 5%
  • Due to the restrictions imposed on land and air travel, oil demand will decline by 9%
  • While global demand for biofuels is also likely to decrease
  • Nuclear is also expected to drop by 3%
  • The report nonetheless has stressed the importance of the priority dispatch, which has helped the renewables to remain unfazed by the pandemic.

 

Solar manufacturing expansion plans for Q1 2020 top 500GW

Meanwhile, the solar industry announced unprecedented plans for capacity expansion in the first quarter of the year - some 500GW - easily surpassing any total annual plans in the history of the sector, according to preliminary data compiled by PV Tech.

PV Tech’s preliminary analysis of upstream manufacturing capacity expansion announcements in the first quarter of 2020, across ingot/wafer, solar cell and module assembly segments combined, exceeded a staggering 500GW.

While solar manufacturers across China couldn’t escape the impact of the COVID-19 pandemic, with production and supply-chains hindered for several months, most have now achieved a full return to work and resumption of production with the strong support of local government.

While the postponement of solar energy projects may cast doubt on pre-pandemic growth plans for new solar installations, there is certainly room for optimism. Pandemic-induced restrictions are easing, the cost of production continues to decrease; and, despite a 50% cut on the PV subsidy for 2020 compared to 2019, the fact that it has been announced 2-months earlier gives the industry certainty as manufacturers prepare to scale production back up. All-in-all the signs are that the PV industry can expect a rapid return to growth while moving towards economic self-sustainability.

 

Key Numbers

2020 PV Subsidy Policy

  • The PV subsidy for 2020 is about US$212 million (RMB 1.5 billion)
  • 1/3 of the total amount will be allotted to residential rooftop solar projects, about US$70.69 million (RMB 500 million)
  • 2/3 of the total amount will be allocated to auction projects (distributed, and utility PV projects), about US$141.38 million (RMB 1 billion)
  • The PV subsidy budget has been cut by 50% from US$424.14 million (RMB 3 billion) in 2019

 

The National Development and Reform Commission (NDRC) ‘Guided Electricity Prices’ for utility-scale and distributed PV projects 2020

  • The guided electricity prices for utility solar power are US$0.05 (RMB 0.35), US$0.06 (RMB 0.40) and US$0.07 (RMB 0.49) for zones 1, 2 and 3
  • The subsidy for residential PV and specific distributed PV projects has been substantially reduced by US$0.014 /kWh (RMB 0.1 /kWh) and US$0.007 /kWh (RMB 0.05 /kWh), respectively

 

Open for business

At EKO, we were fortunately well prepared to weather the global pandemic, with remote working tools already in place. We were able to remain operational and maintained our manufacturing capabilities while continuing to work with our partners to deliver services and solutions to our customers.

We have launched a new online call booking system and continue to develop new resources. In summary, EKO China is open for business; ready to support you as we all work towards a brighter, solar-powered, future for China.   

 


 

Anyone wishing to contact our offices around the world can now book an online video meeting using Calendly and Zoom.

Calendly is a booking tool that allows you to choose the date and time of your meeting. Simply make a selection from the available timeslots, and you will receive an automated email with the details and a Zoom link.

Please click here to access the full list of available meetings with our global team.

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