China: Photovoltaic Industry Steps into the Age of Oligarch 01-21-2016

The ages when the “shell companies” of the photovoltaic industry can be thrived depend merely on the connections and “permits” may end.

 

Recently, the National Energy Administration (NEA) issued the Letter for Soliciting the Opinions to Complete the Guidance among the Management of the Scale of the Solar Generation and Allocating Project by the Competing Manner (The Guidance). According to The Guidance, we should implement the systematic management to the annual scale of the photovoltaic generation in accordance with the characteristics of different kinds of the photovoltaic generation and the degree of the priority.

 

The annual construction scale of advanced photovoltaic generation needs to be examined and approved by the relevant department; while the rooftop PV and the ground distributed PV for the private use need not. The other projects would be allocated by the means of competition, among which the grid purchase price is one of the important race conditions, account for at least 20%.

 

According to the industry sources, once the new policy of the Electricity Bidding is launched and implemented nationwide, the era of photovoltaic power to grid parity will come in the accelerated speed.

 

As the biggest private green power magnate, the head of the Golden Concord Holdings Limited (GCL) Zhu Gongshan has all the way propelled the grid parity. According to Zhu, with the development of the technology, the photovoltaic industry should gradually get rid of the dependency of subsidy; and the enterprises should increase the investment for the research and development and improve the ability of innovation.

 

According to a source of the Canadian Solar, the third largest modules giant around the world, the NEA intend to propose the new policy of the Electricity Bidding, which would turn to be the second reform in China’s photovoltaic industry. The new policy would effectively control the abnormal phenomenon, like the resell of the “permits”, and the cost of the photovoltaic industry; and would greatly push forward the grid parity.

 

 “The federal government vigorously promotes the electricity bidding of the photovoltaic power plants from the perspective of the superstructure of the country, so as to guide the development of China’s photovoltaic industry toward right direction and avoid falling into the same old failure of the photovoltaic bubble again.” according to a source of Trina Solar.

 

China’s photovoltaic industry once ranked the first globally in a short term, but paid expensive tuition on the photovoltaic bubble. The photovoltaic giants, like the Suntech Power and LDK Solar, shared the fate of bankruptcy, reorganization or investing the other industry. The Yingli Green Energy, who suffered huge losses in four consecutive years, still on its way to survive. The Tianwei Group was not the only one who invested large sum of money but gained a complete failure, many of which then turned back from the photovoltaic industry.

 

In The Guidance, NEA emphasized that the disorder of project configuration of the photovoltaic power plants in some areas damaged the healthy development of the solar electrical energy generation. It seems that some enterprises are even the instable mines for the financial system.

 

The practical problems of the huge waste on wind power and solar power can be the evidence of the Disorder of Allocation.

 

According to Zhu Gongshan, the characteristics of the clean energy is to be consumed on the spot, while in the future, the solar energy would integrate with the stored energy thus make everyone the producer of the energy as well as the consumer of the energy.

 

Correspondently, the operators of power grid and the whole society should renovate their innate opinions. He proposed that we should use the experience of the new energy consumption policy of the US. The federal government should stipulate the consumption proportion in each province and power grid enterprises; the enterprises of the wind power generation and solar power generation should on the one hand leave enough time for power grid construction and on the other hand give priority to the consumption ability of the site before investing.

 

The project of the photovoltaic plants electricity bidding in The Guidance refers to the one that acquired the qualification by the means of the market-oriented bidding. Under the precondition of ensuring the generating efficiency and quality, those who offer lower price gain the right of the project construction.

 

According to the source of the Jiangsu Photovoltaic Association, the proposal of the electricity bidding is good news for the mass-manufacturing enterprises and the power plant developers with the low-cost.

 

At present, the total scale of the photovoltaic power plants project is under control, moreover, the subsidies for the photovoltaic generation are limited, therefore made the so-called “permits” precious. Some small-scaled enterprises who own the connections with the local government and relevant departments are easier to gain the official approval (“permits”).

 

"The goal of the polity is grid parity. It is designed to help the enterprises possess the advantages of technique, costs and management gain bigger market shares.” remarked Zhang Linfeng, a senior observer of the photovoltaic industry.

 

With more competitions, the grid purchase price would decline step by step, as the result the pressure of the fiscal subsidies would reduce, the generating efficiency would improve as more and more enterprises are encouraged to be focused on the technique development, and the enterprises that rely on the connections and “permits” would be forced out of the market.

 

With the era of the parity draws on, the mandatory policies issued by the federal government become more and more complete. The enterprises that all the way focused on the oversea market accelerated their steps to return to the domestic market.

 

The industry giants Trina Solar, Canadian Solar and Jinko Solar, ranked top three across the world in terms of the delivery of the photovoltaic modules, increased the investment in the domestic market. Those companies has already established domestic departments and concentrated their force for exploiting the domestic market.

 

According to the global marketing director Zhang Hanbing, the policy of the photovoltaic power plant electricity bidding may cause the vicious completion in short term, however, in the long run, as the execution of the policy turns more and more complete, it would give full play to the advantage of conquering the global market by the mean of the technique and the keep  the domestic market go forward with the oversea market.

 

According to Zhang Linfeng, with the era of the grid parity approaches, China’s large-scale companies, who have grown more and more mature under the of pressure of the double-anti in the Europe and US, would be encouraged to pay more attention to the domestic market; the former active non-mainstream enterprises cannot compete with those giants thus lead China’s photovoltaic generation industry to the Age of Oligarch.

 

*This article is a re-edited and translated version by CCM. The original version comes from www.cnchemicals.com/.

 

If you would like to know more about what's happening in China, go and have a look at CCM's Online Platform! Instant access to CCM's entire resources across 15 segment-industries all at once! Free trial is available NOW, come check it out! 

  

Access to CCM’s entire resources, literally

Over 180,000 reports, news, data

Across over 15 segment industries

 

GET FREE TRIAL NOW!

Subscribe to our Newsletter

 


Next Press