Editorial
China's low-cost subsidy for global PV power generation era ends
Seetao 2022-09-08 11:03
  • The cancellation of preferenal electricity prices means that it is difficult for related industries to enjoy electricity price dividends
  • The increase in electricity prices will raise the cost center of photovoltaic products, while increasing the weight of technological competitiveness
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Following Yunnan, Inner Mongolia also announced the cancellation of the preferential electricity price policy. On September 1, 2022, the official website of the Development and Reform Commission of the Inner Mongolia Autonomous Region issued a notice to cancel the preferential electricity price policy. The notice stated that the preferential electricity price policy for strategic emerging industries in the Western Mongolian Power Grid and the reverse-tiered transmission and distribution price policy for the large-scale industrial electricity consumption of the Eastern Mongolian Power Grid will be cancelled.

Other preferential electricity price policies that do not conform to this notice shall be suspended accordingly. After the above preferential electricity price policy is cancelled, it will be implemented in strict accordance with the current electricity price policy of the country and the autonomous region. The notice will be implemented from September 1, 2022.

The notice stated that this is to strictly implement the requirements of the National Development and Reform Commission to clean up and cancel the unreasonable preferential electricity price policy, and to do a good job in the rectification of problems found in the National Audit Office's 2021 energy conservation and emission reduction audit and the second round of central environmental protection inspectors feedback.

The cancellation of preferential electricity prices means that it is difficult for related industries to enjoy electricity price dividends, which will increase the cost of electricity consumption.

Inner Mongolia has attracted a large number of photovoltaic projects to land

On September 2, GCL Technology responded to reporters that Inner Mongolia cancelled the preferential electricity price policy, and currently it does not involve changes in the profits of power generation companies. The increase in electricity prices will raise the cost center of photovoltaic products, while increasing the weight of technological competitiveness. For enterprises with energy consumption advantages, it will bring stronger competitive advantages.

GCL Technology has deployed the FBR granular silicon project in Inner Mongolia, which is under planning and construction. The company said that in the future, it can rely on advanced manufacturing processes and lower production power consumption to enhance its competitive advantage and reduce the impact on enterprise production.

Tongwei shares told reporters that it has paid attention to relevant policy documents and is in the process of further understanding. Tongwei Co., Ltd. believes that the local area strongly supports the development of the photovoltaic green industry, with good industrial supporting facilities, sufficient element guarantees, and strong long-term development competitiveness.

LONGi Green Energy responded that the company's Inner Mongolia project is still in the construction stage, and the specific situation is being understood.

In March 2022, LONGi Green Energy announced to invest 19.5 billion yuan to build a 20 GW monocrystalline silicon rod and slice project, a 30 GW high-efficiency monocrystalline cell project and a 5GW high-efficiency photovoltaic module project in Ordos.

In August, LONGi Green Energy changed the project with an annual output of 20 GW of monocrystalline silicon rods and slices agreed in the original agreement to a project with an annual output of 46 GW of monocrystalline silicon rods and slices.

In April 2022, affected by Yunnan's cancellation of the preferential electricity price policy, LONGi Green Energy announced that half of its own silicon wafer production capacity profits were affected. As a result, LONGi Green Energy began to plan to expand production in Inner Mongolia, which has the advantage of electricity cost.

An industry insider told reporters that the cancellation of preferential electricity prices in Yunnan and Inner Mongolia basically announced the end of the era of China's low energy costs subsidizing global photovoltaic power generation, and the difference in electricity prices between provinces and cities will shrink year by year.

Since China proposed the "dual carbon" goal in September 2020, the state has gradually strengthened the control of energy consumption intensity and total energy consumption (that is, dual control of energy consumption).

Shenwan Hongyuan said that the cancellation of the preferential electricity price policy in Inner Mongolia this time has been extended to "strategic emerging industries", no special care will be given to specific industries, and the decision-making power will be returned to the market. This policy has made an obvious breakthrough. As a commodity, the market-oriented attributes of electricity are expected to be greatly improved, and the long-term distortion of the business model of the power industry is expected to be corrected.

According to the nomenclature of the "14th Five-Year Plan" outline, strategic emerging industries include new generation information technology, biotechnology, new energy, new materials, high-end equipment, new energy vehicles, green environmental protection, aerospace, marine equipment and other industries.

On October 12, 2021, the National Development and Reform Commission issued the "Notice on Further Deepening the Market-Based Reform of On-grid Electricity Prices for Coal-fired Power Generation" (hereinafter referred to as the "Notice"), which clearly expanded the range of market transaction electricity prices; Market, purchase electricity according to market price, cancel the sales price of electricity in the industrial and commercial catalogue, etc. This means that the price of electricity for industrial and commercial use will be determined entirely according to the relationship between supply and demand, which will greatly advance the market-oriented reform of electricity prices.

Inner Mongolia is a big province of electricity. According to the "14th Five-Year" Electric Power Development Plan of Inner Mongolia Autonomous Region, as of 2020, Inner Mongolia has an installed power capacity of 146 million kWh and an annual power generation of 570 billion kWh, ranking second in the country. Among them, the installed capacity of wind power reached 37.85 million kilowatts, ranking first in the country. Editor / Xu Shengpeng


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