China Boosts Solar Growth with Grid Rule Changes

May 30, 2024 02:18 PM ET
  • China's new plan boosts renewable energy growth, but may impact profits for power plants. Clean energy stocks rise as government pushes for more solar and battery installations.

China has eased restrictions on renewable energy utilization in areas with crowded grids, aiming to maintain its rapid pace of renewable installations. The State Council's action plan also includes policies to accelerate battery storage installations, power line build-outs, and stricter approval processes for clean energy manufacturing. These measures align with China's goals of reducing energy consumption and carbon dioxide emissions per unit of GDP by 2024, although the government may fall short of its targets.

Shares of Chinese clean energy companies rose following the announcement, with companies like GCL Technology Holdings Ltd. and China Longyuan Power Group Corp. seeing gains. The plan allows for increased deployment of renewables in areas previously deemed overcrowded, potentially leading to an additional 30 gigawatts of solar panel installations this year. However, this could also impact profits for renewable power plants as more generation may be curtailed.

Additionally, the plan focuses on better deployment of new energy metals production capacity, such as silicon for solar manufacturing and lithium for batteries. It also prohibits preferential power rates for high-energy intensity sectors, benefiting companies with low-energy production methods. The government aims to raise battery storage capacity to 40 gigawatts by 2025, up from the previous target of 30 gigawatts.

How will China's eased restrictions on renewable energy utilization impact the solar industry?

  • China's eased restrictions on renewable energy utilization will likely lead to increased investment in the solar industry.
  • The solar industry is expected to see a boost in demand for solar panels and other solar equipment as China looks to expand its renewable energy capacity.
  • Chinese companies in the solar industry may benefit from the government's support for renewable energy projects, leading to potential growth and expansion opportunities.
  • The easing of restrictions could also attract foreign investment in China's solar industry, further driving growth and innovation in the sector.
  • Overall, the impact of China's policy changes on the solar industry is expected to be positive, with increased focus on renewable energy and sustainability.
Tags:
Source:
bloomberg.com

299


SOLAR DIRECTORY
Solar Installers, Manufacturers