China's new flirt with mega-solar

Could an ambitious 1000 MW solar project in China's stark western region signify a resurgence for the global PV market – or will it fail the financing step?

Climate Progress

China’s second-largest maker of solar photovoltaic panels will develop a huge 1000 megawatt ground-mounted solar power plant complex in a remote Chinese desert, which the company announced last week – a move that some say is a sign of big things to come for the global solar industry in 2014.

The complex will be built by Trina Solar in the western region of Turpan Prefecture, a “harsh, drastic, cold desert” in the western Xinjiang province. Plants are scheduled to begin construction over a four-year time frame starting in early 2014, the company said, with installed capacity of 300 MW scheduled to be completed and connected to the grid by the end of this year. The project is subject to Chinese regulatory approval, but if completed, it would be the largest solar power plant project in Xinjiang.

“Xinjiang’s abundant land and solar resources make Turpan an ideal location for this project,” Trina Solar chief executive Jifan Gao said in a statement. “We look forward to working in close collaboration with the local authorities to satisfy the conditions needed for phase one.”

The announcement is welcome news for China, a country with world-famous pollution that has recently been found to be largely caused by too-abundant fossil fuel production. That production is led by more than 2300 coal-fired power plants, though emissions from other types of fossil fuel combustion also contribute to the smog. However, Trina’s new solar project will only supply power for the areas in which the project surrounds – Turpan Prefecture itself has a population of just 570,000 – dashing the chances that it might alleviate pollution in the smog-centers of Beijing or Shanghai.

Graph for China's new flirt with mega-solar

Still, Todd Woody at Quartz writes that Trina’s new project “marks a significant shift in the global solar market”, revived by the Chinese government’s projected solar goals for 2020. By that year, China is aiming to have a total of 700,000 MW of renewable energy online, including 50,000 MW of solar.

“The new policy came as China’s photovoltaic panel makers faced falling revenues and multibillion-dollar deficits after embarking on a manufacturing boom that allowed them to corner the global solar market but sent prices plummeting,” Woody writes. “Projects such as the power plant in Turpan Prefecture ... help soak up China’s excess manufacturing capacity while creating jobs for local workers.”

The project itself will eventually represent 12.5 per cent of Trina’s annual manufacturing capacity, according to the Quartz report, which says business in China will also account for as much as 30 per cent of Trina’s revenue in 2013 – up from 13 per cent in 2012.

Doug Young at Renewable Energy World, however, has his doubts.

“I certainly don’t want to throw too much cold water on this nascent rebound for China’s solar panel makers, who along with their global peers have suffered through a prolonged downturn dating back to early 2011 due to massive overcapacity,” Young writes. “But amid the bright news, potential downside lurks in the risk that payments for some of these mega-orders could be slow to come, as many solar plant operators are big state-owned entities that may lack the funds and skills to pay for and operate all of their ambitious new projects.”

In other words, the scope of the project is aggressive – maybe too aggressive, which may translate to difficultly obtaining financing, causing delays. But if China, which has set a goal of having 35 gigawatts of installed solar power generating capacity by 2015, are to reach those goals, aggressiveness may be their only choice.

“Achieving such a grand target will be tough,” Young writes, “but big state-run companies are showing they will embark on a major new building spree to help Beijing reach the goal.”

This article was originally published at Climate Progress. Reproduced with permission.

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