In recent news, China has announced a relaxation of limits on new installations of solar and wind power, despite some regions experiencing strain on their grids due to an increase in clean-energy projects. According to a central government work plan released late Wednesday, wind and solar farms in areas with better resource conditions can now have up to 10% of their generation curtailed, marking an increase from the previous cap of 5%.
This change is aimed at allowing more renewable energy to be deployed in regions where grid congestion would have been an issue. However, it may also put pressure on the profits of renewable power plants as they could see more of their generation cut off. The increase in curtailment comes after China broke records for solar and wind installations in 2023.
The relaxed caps on curtailment could benefit solar equipment manufacturers who have been struggling with profitability due to a price war driven by excess production capacity. The State Council’s action plan for energy saving and carbon reduction in 2024 and 2025, dated May 23 but released on Wednesday, also emphasizes the need for a more rational deployment of new production capacity for metals like silicon.
Furthermore, the plan states that new polysilicon and lithium battery manufacturing capacity must meet higher standards in order to ensure efficiency and sustainability in China’s clean energy sector. Overall, these changes in curtailment policies and production standards are a step towards promoting sustainable growth and development in the renewable energy industry in China.
