The shifting economics of solar power in Chinavar abtest_1803649 = new ABTest(1803649, ‘click’);

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The incredible drop in the price of photovoltaic systems has made solar power an affordable option for much of the world. And, as long as solar is providing a small fraction of the electricity on a given grid, there is little barrier to adding new photovoltaic facilities. But as the share of solar power increases, managing the fact that it generates only intermittent electricity becomes a significant grid-management challenge.

At that point, factors other than price become important in determining how much solar power matters. And those factors can vary from country to country. This means country-specific analysis is needed to understand the potential of solar energy. This week, researchers in China released an analysis from their home country, showing that solar has now reached a point where it is cost-competitive with coal. The report also said that solar (when combined with storage) could meet almost half of China’s needs by mid-century.

a changing landscape


Like everywhere, China has seen a decline in the cost of solar power over the past decade, with a 63 percent drop between 2011 and 2018 alone. In line with that, the installation of solar has increased dramatically. Currently, a third of the entire planet’s new solar capacity is being commissioned in China; The country exceeded the installed capacity of the US in 2013 and Germany in 2015, and now has more than 250 GW of active power – more than double that specified by its economic plan by this point.

Given that China plans to hit net zero emissions by 2060, this manufacturing spree is likely to continue.

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But the forecast isn’t all rosy. Most of the population of China is located in the southeast of the country. The best solar resources (in terms of cloudless days and available land) are in the north-west, which is also less populated. This mismatch has left solar facing constraints due to limitations in its ability to transfer electricity across vast distances of China’s grid. Solar plants in the North-West have often ceased production, as there is no capacity to send it where it is needed.

As a result, it has become a bit difficult to fully understand the economics of solar energy in China.

To get a clearer picture, the researchers built a model that takes into account most of the factors that affect solar performance. The model tracks changes in technology, economics, solar resources and the Chinese grid for the period 2020 to 2060. It used six years of satellite weather data to estimate specific productivity in different regions of the country, and included existing land information. Uses that would interfere with solar-farm seating.

lots of possibilities

Among other things, the model produces what the researchers call “technical efficiencies” — the amount of solar energy that could be produced if all accessible sites were used to produce it. For 2020, the technical potential for solar power in China is less than 100 petawatt-hours, or about 13 times China’s electricity demand. Due to improvements in technology, that technical capacity is projected to increase to about 150 PW-hr by 2060, the year China plans to reach net-zero emissions.

But many of those sites are relatively poor. The average capacity factor (actual output versus rated capacity) is estimated to be only 17.6 percent (for reference, the average of plants operated in the US is in the region of 25 percent).

The analysis also generates an estimated value that will provide a benefit for the solar facilities at each location, taking into account initial costs, maintenance and financing. He suggests that, in 2020, most countries could produce solar power at a cost comparable to coal. About 80 percent of the potential capacity will reach price parity by 2022, and this will be true everywhere before the end of this decade.

This gap will also continue to widen, as the price of solar is likely to fall further. It currently stands at $49.3/MW-hr, but is projected to decrease to $13/MW-hr by 2030 and $3/MW-hr by 2060. And the researchers note that solar’s competition with coal comes despite the fact that the health and environmental cost of coal is not at the expense of the electricity generated from its use. If carbon had a price, the price gap between coal and solar would already be large, and by mid-century it would have been much greater.

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