China’s National Energy Administration (NEA) and State Grid Corp. of China (SGCC) are deliberating on the possibility of elevating the current cap on photovoltaic (PV) curtailment to accommodate the mounting pressure from new renewable energy projects struggling to secure grid connections.
Presently, only a maximum of 5% of PV output can be curtailed from solar plants, but authorities are weighing the option of increasing this percentage to alleviate grid congestion.
The imposition of a 5% curtailment cap on wind and solar projects was introduced by China’s National Development and Reform Commission (NDRC) and the NEA back in 2018. This directive aimed to uphold a minimum utilization rate of 95% for solar and wind power projects in specified Chinese provinces.
Initially intended to ensure the efficient utilization of renewable energy installations and safeguard investment returns for power companies, the strict enforcement of this policy has hindered the expansion of renewable energy projects, particularly in regions grappling with high abandonment rates. Consequently, the approval and development of new projects have been severely curtailed.
China Contemplates Expansion of PV Curtailment to Facilitate Renewable Energy Growth (Credits: PV Magazine USA)
Despite notable advancements in solar technologies resulting in reduced installation costs and improved returns on investment for power projects, state-owned energy companies remain hampered by existing curtailment regulations when setting installation targets.
This bottleneck has led to numerous projects struggling to obtain approval for construction. Furthermore, the sluggish progress of the State Grid’s ambitious ultra-high voltage transmission network, which necessitates substantial investment, has failed to effectively address the issue.
In parallel, several local governments have shown support for increased renewable energy consumption. Notably, the Jiangxi Energy Bureau has proposed policies to incentivize the expansion of distributed rooftop PV, while the government of Tibet has initiated programs for the development of new energy sources in the region to accelerate grid-connection projects.
Consequently, there is a mounting chorus advocating for an expansion of the curtailment limit to foster industry growth. Industry insiders foresee this adjustment potentially leading to a significant uptick in permits for new renewable energy installations, encompassing both wind and solar projects. While this may entail lower returns on investment for projects, the primary focus is on boosting installation rates, deemed crucial for the industry’s sustainable growth in 2024 and beyond.
