A tender for 1GW of capacity in Inner Mongolia shows China’s lowest ever bids for solar electricity, according to a report from Reuters.
Reuters cited news outlet China Business News in its report that fifty solar developers and manufacturers had bid as low as CBY0.52/kWh (US$0.078) in this government-backed auction.
Reuters added this price point comes in at around the top end of China’s coal-fired thermal power prices in various regions. The widespread reality of China coal-powered electricity generation is viewed negatively by a spate of environmental champions pointing to the reality of climate change.
Even with such low prices, the solar bids are still still higher than recent record-low tariffs which were set in Chile and Abu Dhabi this month.
An unnamed bidder pointed out these policy incentives are given to China’s government-backed projects, unlike for other commercial projects, which tend to experience greater financial losses as a result of “transmission curtailment and subsidy default.”
The country’s solar industry has been dogged by curtailments in certain states and delays to subsidy payments. However Reuters said that on Friday the Ministry of Finance approved renewable power projects for subsidies delayed since 2015. Subsidy delays have also caused a slowdown in new project development as well as grid curtailments in certain regions of China.
China has also deployed far more solar power than targeted in the first half of 2016 leading to significant overcapacity in the PV equipment market worldwide as domestic demand decreases in the second half of 2016.
The current growth taking place in China’s solar infrastructure, estimated to grow dramatically by 2020, stands out as a positive.
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