CNREC advises reform and increased RE targets in China

CNREC has released a list of recommendations regarding renewable energy deployment in China. Chief among these is advice that the target for solar PV deployment by 2020 be raised from 110 GW to 200 GW.

The report also recommends increased targets for wind (from 210 GW to 350 GW) and biomass (from 15 GW to 30 GW), and advises the NEA to cease the approval of new coal fired plants and to halve the share of coal in China’s energy mix by 2030.

Energy consultancy Asia Europe Clean Energy Associates (AECEA) expect that a 200 GW target for solar would be met, or even exceeded by as much as 20%, and notes that wind and biomass have struggled to keep up with solar’s rapid deployment – expected to hit 50 GW for the full year 2017.

The report from CNREC, ‘China Renewable Energy Outlook 2017’ also recommends widespread reforms to China’s power sector, including the establishment of competitive power markets, and the gradual replacement of the FIT scheme with competitive auctions and a Feed in Premium or Contract for Difference scheme.

AECEA notes that China has already seen success with competitive bidding in its Top Runner Program, now extended to 8 GW. The consultancy sees 2020 and the drafting of the 14th five year plan (2021-2025) as a key turning point for Chinese energy policy, when we could see a shift away from FITs and towards an FIP/CfD system by 2021, with the possibility of grid parity for solar, and the removal of all financial support arising from 2022/2023 onwards.

“It remains to be seen to which extent China’s NEA will follow CNREC’S proposed recommendations,” warns AECEA in its press release. “In AECEA’s view, they certainly will be taken into consideration and shall serve as ‘the’ reference when drafting new policies.”