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China's PV Installed Capacity Will Increase Five Times In The Next 5-7 Years
- Apr 03, 2018 -

     

     According to a report issued by the UN Renewable Energy Agency, the cost of photovoltaic power generation has dropped by 70% in the past 7 years. With the advancement of technology, the world has witnessed explosive growth. Last year, China’s PV industry also ushered in the best development opportunities in the past decade. The country’s newly installed capacity exceeded 50 GW for the first time, and completed the “13th Five-Year Plan” ahead of schedule. The development situation is excellent. Imagining the future, the development trend of the photovoltaic industry and development bottlenecks have become the focus of attention in the industry.


     1000GW, 1 billion kilowatts. This is the installed capacity of the global PV power generation installed in the next 5-7 years in the China (Xi'an) Photovoltaic Hard Technology Innovation Summit held recently.


     Compared to the current scale of only 200 million kilowatts, 1 billion kilowatts means a nearly 5-fold increase. However, according to Li Junfeng, chairman of the China Energy Research Association Renewable Energy Professional Committee, this scale is still far from large enough. Not only is it unable to meet global demand, it is even unable to meet China's development goals.


     1. The development of photovoltaic industry is strong enough


 “Everyone can see that the photovoltaic industry is very interesting, because we are talking about the global market nominally, but in fact, the global market is mainly the Chinese market, or the Asian market. The installed capacity of photovoltaic power in Asian countries accounted for global in 2016. Half, the current data is 2/3, of which 50% is in China. We can clearly see that the main force of solar energy development is China.” Michael Schemla, senior advisor to the European Photovoltaic Industry Association, said at the meeting.


     According to data from the Citi think tank, China’s polysilicon production was 238 thousand tons in 2017, a year-on-year increase of 22.6%, accounting for 59% of global production; wafer, cell, and module production were 85, 71, and 66GW, respectively. It accounts for 85%, 63% and 68% of the world's total production. There are more than 5 companies in all aspects of the industry chain, which ranks among the top 10 in the world. From the perspective of the installed capacity of the power station, China's newly installed photovoltaic capacity reached 53 million kilowatts last year, ranking the first in the world for five consecutive years. It also replaced thermal power for the first time in the country, becoming the largest installed power source in the year. As of the end of last year, China’s cumulative installed capacity exceeded 130 million kilowatts and completed the “13th Five-Year Plan” ahead of schedule.


      Geng Zheyi, deputy chief engineer of the State Grid Corporation Dispatching Control Center, disclosed more positive information at the meeting. According to him, distributed photovoltaics will also complete the "13th Five-Year Plan" ahead of schedule: "As of the end of December last year, China's distributed photovoltaic installed capacity was 19.44 million kilowatts, an increase of 3.7 times year-on-year. If growth continues at this rate, In 2019, the photovoltaic industry may complete the '13th Five-Year' plan of 60 million kilowatts of distributed targets."

Qi Zheyi also stated that “the 13th Five-Year Photovoltaic Power Generation will continue to develop rapidly, as will the international community. The development momentum of the photovoltaic industry is very strong.”

  

      2. Cost decline supports expansion of scale


      According to Li Zhengguo, president of Longji Green Energy Technology Co., Ltd., the rapid development of China's photovoltaic industry is due to the continuous reduction in the cost of the photovoltaic power generation industry. “This makes the competitiveness of photovoltaics for traditional energy sources continue to increase, so the development of the photovoltaic market has reached 100 million kilowatts in 2017 from the scale of the 100,000-kilowatt market in the beginning of this century.”


      According to Li Zhenguo, in recent years, photovoltaic industry technology has continuously improved, costs have been declining, and efficiency has been continuously improved. In the past ten years, the cost of photovoltaic power generation systems has been reduced from US$10/W to US$1/Watt, a drop of 90%. Among them, the monocrystalline silicon wafer market price per watt 10 years ago was 100 yuan, but has recently dropped to 4.55 yuan, less than 5% a decade ago. The cost of electricity is reduced from US$1/kWh to below US$0.1/kWh. In recent years, several power plants have fallen below 3$/kWh in the Middle East and South America.


     However, Guodian Investment Xie Xiaoping, chairman of the upper reaches of the Yellow River, pointed out that the main problem in the development of photovoltaics in China is the cost issue: “So far, the photovoltaic industry still needs subsidies, and the industries that need subsidies are actually not sustainable. Therefore, photovoltaic Early access to affordable Internet access is the key to the healthy development of the industry."


      Li Zhenguo said that although China's photovoltaic industry is currently pursuing low-cost Internet access, photovoltaics have become the cheapest clean energy in the world. “The development of energy storage industry is not as fast as photovoltaic, but if we look forward to the next decade, the cost of energy storage will probably be reduced. The current 1/3. Therefore, it is believed that the economical nature of 'photovoltaic + energy storage' will be realized within 10 years."


     3.billion kilowatts is enough?


     How large will the future PV market be? “The result of our speculation is that in the next 5-7 years, the global PV installation will reach 1,000 GW. This scale is equivalent to the capacity of all existing thermal power installations in China and half of the world's thermal power installations. Considering the 20-30 years of life of photovoltaic power plants. In the future, the photovoltaic market will add thousands of GW each year and become an industry that can continue to develop. The prospects are extremely large, said Li Zhenguo.


      For Li Zhaoguo's 1000GW development goal, Li Junfeng made a straightforward assessment: “This scale is too conservative and far from enough.” He said that the National Development and Reform Commission and the National Energy Administration released the “Revolution Strategy of Energy Production and Consumption” last year (2016— 2030), where it is clear that non-fossil energy will account for 15% of the total by 2020, 20% by 2030, and more than 50% by 2050. “At present, the development of nuclear power has encountered unprecedented difficulties, and hydropower and wind power have been exhausted. No subversive changes are possible. All countries in the world are facing the same problem. Therefore, photovoltaics will have high hopes.”


       Li Junfeng calculated an account: China's preliminary idea to 2030 is that per capita consumption of 8,000 kWh, calculated by 1.4 billion people, will consume 10.2 trillion kWh per year. Last year, the photovoltaic power generation amounted to 110 billion kWh, equivalent to 1% of the national electricity generation. If the ratio of photovoltaic power generation reaches 10%, that is, 1.1 trillion kWh. According to current efficiency, photovoltaics need at least 800 million kilowatts to achieve this goal. Therefore, 1 billion kilowatts should not be a global goal, and even China’s goals will not be met. If PV reaches about 1.5 trillion kWh by 2030, it will require 1.2 billion kilowatts.


     “According to the scale, photovoltaics are a long way to go,” said Li Junfeng. “At present, there are 12 years left until 2030. If we want to reach 800 million kilowatts of installed capacity, we will have at least 50 million kilowatts of new installed capacity each year. Therefore, we should not reduce the scale. But should increase moderately."


       In addition, Li Junfeng believes that PV has been in a phase where costs have been slowly declining, and the space for technological breakthroughs in driving down costs has been very limited. The reason why a number of projects in foreign countries can realize a cost of 3 cents for electricity is not mainly due to technological advances in hardware, but benefits from "soft" policies. “So, ‘hard’ technologies have to be improved, and ‘soft’ policies must keep up. As the industry continues to develop on a large scale, the role of ‘soft’ policies will become increasingly apparent.”



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