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Photovoltaic "zero subsidy era" parity projects will be a large-scale trend

Recently, the National Energy Administration issued a "Notice on accelerating the work of wind power and photovoltaic power generation parity Internet Access (draft for Comments)" (hereinafter referred to as the "draft for Comments"), once again triggered a discussion in the industry -- "Scenery zero subsidy era" may come ahead of schedule.  According to the 13th Five-Year Plan for the Development of Renewable Energy, the electricity price of wind power and local coal-fired power generation will compete with the platform in 2020, that is, parity will be realized on the generation side.  Photovoltaic power generation and grid sales price, that is, the power side to achieve parity, in order to achieve scenery "zero subsidy".  


According to the draft, local governments should organize the construction of affordable Internet access and unsubsidized wind and photovoltaic power generation projects.  For projects that meet the requirements of monitoring and early warning management, the National Energy Administration shall not carry out annual construction scale management.  It is worth noting that local governments can introduce subsidy policies for a certain period of time on their own, and encourage local governments to carry out pilot projects of direct transactions between wind power and photovoltaic power generation and consumers in combination with pilot projects of incremental distribution networks, pilot projects of market-based trading of distributed generation and direct trading of electricity.  


"Zero subsidies will drive down both manufacturing costs and non-technology costs."  


How to understand the draft?  "Don't read too much into the document," said a senior figure in the renewable energy sector. "It just means what it says -- you can do it without state subsidies, you can do it if you want, and you need to do it yourself."  


In 2017, wind power took the lead in launching the first batch of low-cost online demonstration projects, with a total scale of 707,000 kW, widely distributed in Hebei, Heilongjiang, Gansu, Ningxia, Xinjiang and other regions.  But whether the scenery has affordable access to the Internet has been controversial, especially after the "531 New Deal", the photovoltaic industry accelerated reshuffle, is still in a "semi-frozen" state.  


This draft is only half a month after the National Energy Administration approved the Letter on Matters related to the Construction of Photovoltaic Power Generation Projects without State subsidies at the end of August.  The National Energy Administration in the "May 31 New Deal" after the public said that photovoltaic affordable Internet pilot is expected to start within the year.  Some industry insiders speculated that the photovoltaic pilot will be accelerated, and some photovoltaic senior figures, who did not want to be named, held the opposite view.  According to the calculation of Zhihui Photovoltaic, at the current level of photovoltaic electricity price, photovoltaic kilowatt subsidy is between 0.2 yuan and 0.37 yuan/KWH, and the benchmark price of photovoltaic power generation is very close to the price on the user side.  In this context, "there should be no photovoltaic affordable Internet pilot, such as Dongying city, Shandong Province, can build their own."  "The person said.  


On the other hand, China's scenic parity Internet access has always been limited to high non-technical costs.  The draft makes it clear that energy authorities of provincial and below local governments should comprehensively reduce non-technical costs.  According to the statistics of China Photovoltaic Industry Association, the non-technical cost of photovoltaic power station construction has accounted for more than 20% of the total investment cost, while the cost of wind power grid connection is high due to the system and mechanism problems.  


"Zero subsidy will drive down both manufacturing costs and non-technical costs, which is expected to make The Scenery running towards the era of comprehensive affordable Internet access."  Some new energy enterprise project manager Yin mou told reporters.  


It is understood that the price of wind power equipment and photovoltaic modules has decreased by about 20% and 60% respectively in the past five years.  An industry in an interview said, the draft or for scenery "zero subsidy" pave the way, "from the technology, some areas have affordable access to the Internet, wind power overall conditions better than photovoltaic.  China's wind turbine equipment cost is the lowest in the world, after solving the non-technical cost, wind power will be the first to enter the comprehensive affordable Internet era."  


Local subsidies will still be allowed  


According to the draft, under the condition that relevant conditions and management requirements are met, the energy department in charge of provincial and local governments and other relevant departments can independently introduce subsidy policies for a certain period of time, and the local subsidy policies do not affect the identification of project evaluation attributes.  In fact, the local subsidy policy after the "531 New Deal" has been highly anticipated, and the "cliff type" reduction of the national subsidy for photovoltaic has helped the photovoltaic affordable access to the Internet.  


Recently, photovoltaic local subsidies continue to benefit, September 17, "May 31 New Deal" after the first provincial photovoltaic project subsidy policy landing, causing a sensation in the industry, is regarded as a "timely help" to the downturn of the photovoltaic market.  


On the same day, the National Development and Reform Commission of zhejiang province and so on six departments jointly issued by the relevant notice, in addition to maintaining the province for 0.1 yuan/KWH, also provides for eligible families photovoltaic roof project subsidies: "more than spontaneous for private use, electricity on the Internet" according to 0.32 yuan/KWH subsidies, "full access to the Internet," according to 0.7 yuan/KWH.  


Some enterprises expect that the household market, which has been stagnant for about three months, will recover first in Zhejiang, and "there will be jobs all over the country in the next few months".  Hefei also launched a local photovoltaic subsidy policy on September 20, with distributed photovoltaic subsidies of 0.15 yuan per KWH for five consecutive years.  


According to incomplete statistics, there are more than 20 photovoltaic subsidy policies in more than 10 provinces such as Zhejiang, Anhui and Shandong. Some provinces and cities with relatively good economic conditions attach importance to new energy have even "attractive" subsidies.  


Wind power now has few local subsidies.  According to a circular issued by the National Energy Administration in May, starting in 2019, all newly approved centralized onshore and offshore wind projects in provinces should be allocated and fixed through competition, while decentralized wind projects will be exempted from competitive allocation and will gradually be included in market-based transactions for distributed power generation.  


"The process of photovoltaic affordable Internet access is likely to be faster than wind power, photovoltaic provincial and municipal subsidies will support a significant increase in the number of photovoltaic installed, photovoltaic cumulative installation will undoubtedly exceed wind power."  North China Electric Power University professor Yuan Jiahai told reporters.  Photovoltaic industry technological progress follows the "Moore's Law", if there is no original, disruptive technology, wind power industry cost will fall faster than photovoltaic.  


Recently, north China Electric Power University released the research results of "Wind power and Photovoltaic Power Generation Affordable Access Path and Policy Suggestions in 2020", which showed that based on the actual situation of wind power generation in 2016, the wind abandoning rate and light abandoning rate should not exceed 5% in 2020, and the financing cost should be set at 4%.  The cost of wind turbines and photovoltaic modules continues to decline at a rate of 8% and 15% respectively, and is no more than the cost of technology. Only 1/3 of the wind power in China can achieve the goal of stroke power parity in the 13th Five-Year Plan.  The cost of centralized photovoltaic power generation in about 3/4 regions of China is comparable to the electricity price of local residents. The cost of distributed photovoltaic power generation in most regions of China is lower than or close to the electricity price of local industry and commerce, achieving the goal of user-side parity.  


Affordable project or scale presentation  


In recent years, to solve the problem of abandoning wind and light, the state has introduced a series of policies and measures to control scale, reduce subsidies, lower electricity prices and promote consumption.  Since 2017, the consumption situation of wind power and photovoltaic power generation has continued to improve, and the amount of power abandoned and the rate of power abandoned have continued to decline.  


According to Su Chen, an analyst at Industrial Securities, "The boom is expected to fully enter the power-generation parity era by 2020.  During the period, when the photovoltaic benchmark electricity price is 0.4 yuan/KWH, the system cost is 3.5-4 yuan/KWH, and the components are less than 2 yuan/KWH, the photovoltaic parity project will be presented on a large scale."  


According to industrial Securities report, in wind power, 27 provinces and cities can build projects without state subsidies, and 2 provinces have approved or recorded parity projects can be built.  In terms of photovoltaic, 15 provinces can build projects without subsidies, and 13 provinces and cities can build projects that have been approved or registered at parity.  

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