Chinas National Development and Reform Commission (NDRC) has issued a edict this week that forces grid operators in some of the countrys most network-congested regions to begin purchasing more solar and wind power.
Eleven of the most congested networks where vast amounts of solar and wind plants lay idle because of grid curtailment have been identified for the new power purchase order, which has stipulated that at least 1,300 hours of solar power must be purchased by grid operators.
For wind, that utilization target is higher at 1,800 hours, and the result of the NDRC edict has been a sharp increase in wind and solar shares, Bloomberg has reported.
According to JinkoSolar CEO Chen Kangping, the requirement passed down by the NDRC will offer strong support for the countrys PV industry, telling Bloomberg that "guaranteed utilization hours are satisfying enough to ensure stable return from profits".
The issue of delayed subsidy payments and curtailed solar PV projects proved a hot topic at the recent SNEC exhibition held last week in Shanghai, so any moves by the government to ease these bottlenecks is to be welcomed, the industry said.
As the solar sector in China has soared, grids in some regions have struggled to absorb the extra capacity, leading to an uncomfortable number of completed projects being curtailed sitting idle while producing clean energy that was left unused.
The situation is chronic in the northwestern province of Gansu, with an estimated one-third of installed PC panels effectively going unused, according to data from the National Energy Administration (NEA). The problem has been one of geography and economics the abundance of land and sunshine in the northwest is at complete odds with power demand, with most of Chinas population and therefore thirst for affordable and renewable energy located further east.
This minimum purchase agreement could prove a short term compromise, said BNEF analyst Wang Xiaoting. "Its better than nothing. If its implemented in practice, it will improve the situation."