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Solar Power Can Help Solve China’s Coal Power Dilemma
Caught between meeting rising electricity needs and loss-making coal power plants
China’s power companies are in a coal power dilemma: meeting energy needs despite financial woes. Solar power can be an attractive option for redressing this dilemma. Once it is built, solar power has specific and predictable cost profiles involving mainly operating and maintenance costs, whereas the cost profiles for coal power are often affected by volatile fuel prices.
China’s recent ramp-up of policy support for rooftop solar PV further vindicates the practicality of this option. National Energy Administration (NEA) – the national energy policymaker and planner – issued a document in July this year that sets up a rooftop PV mandate for selected counties: at least 20% of all residential rooftops; at least 30% of commercial and industrial buildings; more than 40% of non-government public buildings, such as schools and hospital; and over 50% of government buildings.
This signals a policy shift towards a more inclusive approach to electricity decarbonisation in China that goes beyond utility-scale projects to include small-scale technologies, like rooftop solar PV, which have historically received less attention. This approach could help ramp up clean power, and alongside a significant efficiency improvement, contribute to closing the gap between rising needs for electricity and the supply capacity of clean power – essential for a timely and orderly phase-out of coal power.
Besides this policy shift, reconfiguring of the power system, encompassing all its constitutive elements (e.g., market mechanisms, network infrastructure, and regulatory processes), should also speed up to accommodate large outputs from variable distributed renewable sources, while maintaining supply sufficiency and reliability. The financial difficulties recently experienced by many power companies in China provide additional stimulus for these changes.
Through embracing cost-stable solar power, a net-zero power system could emerge more smoothly and rapidly in China.
Many power companies in China are caught in a dilemma between pressure to meet rising needs for electricity and financial woes arising from their loss-making coal power plants. A rapid scale-up of solar power provides a stable-cost alternative for redressing this dilemma.
Author: Dr. Muyi Yang, Prof. Xunpeng Shi of the University of Technology Sydney, Dr. Peng Wang of Guangzhou Institute of Energy Conversion
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