China cools solar power drive

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China has moved to curb new solar capacity. Above, Chinese fishermen casting a net next to a photovoltaic power station built on top of fish ponds in Yangzhou, in China’s eastern Jiangsu province. (AFP)
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China has moved to curb new solar capacity. Above, Chinese employees working on a floating solar power plant in Huainan, a former coal-mining region, in China’s eastern Anhui province. (AFP)
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China has moved to curb new solar capacity. Above, Chinese fishermen next to a photovoltaic power station built on top of fish ponds in Yangzhou, in China’s eastern Jiangsu province. (AFP)
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China has moved to curb new solar capacity. Above, Chinese fishermen next to a photovoltaic power station built on top of fish ponds in Yangzhou, in China’s eastern Jiangsu province. (AFP)
Updated 17 January 2019

China cools solar power drive

  • China announced last year that it would suspend new projects after a record 53 GW capacity increase in 2017 left it struggling to find spare grid capacity
  • China is also aiming to gradually phase out direct financial support to the solar industry after a decline in costs

SHANGHAI: China put just over 43 gigawatts (GW) of new solar generation capacity into operation in 2018, down 18 percent from a year earlier, an industry group said on Thursday, after a government move to curb new capacity and ease a subsidy payment backlog.
The new generation took the country’s total installed solar power capacity to more than 170 GW by the end of the year, the China Photovoltaic Industry Association (CPIA) said.
China announced last year that it would suspend new projects after a record 53 GW capacity increase in 2017 left it struggling to find spare grid capacity and pay a renewable subsidy backlog amounting to more than 140 billion yuan ($20.69 billion) last year.
China is also aiming to gradually phase out direct financial support to the solar industry after a decline in costs, announcing last week that it would launch a series of new subsidy-free projects.

 

 But solar manufacturers are already feeling the pinch, and warned last year they were facing closure after a surge in new production capacity in previous years sent component prices plummeting.
“Facing a lot of complicated domestic and overseas trends, the sector as a whole is under big pressures and substandard producers are expected to promptly exit the market,” said Wang Bohua, CPIA vice-chairman, in a speech on Thursday.
Wang said output of solar equipment continued to increase in 2018 despite the decline in new domestic capacity, with solar module production up 14.3 percent to an equivalent of 85.7 GW.
Much of the surplus production was diverted to overseas markets, with solar component export earnings rising 10.9 percent from a year earlier to $16.11 billion, Wang said, according to a transcript published on CPIA’s official WeChat social media account.
China’s solar manufacturers have been accused of using subsidies to drive down prices and put foreign competitors out of business, but they claim they have been the beneficiary of a fierce competitive environment forcing them to reduce costs.
The US imposed tariffs on China’s solar products last year, and its share of China’s exports fell from 5.9 percent in 2017 to 0.24 percent in 2018. The bulk of China’s overseas shipments went to India, South East Asia and Europe.

FASTFACTS

170 gigawatts — China’s total installed solar power capacity


Saudi energy giant to invest $3bn in Bangladesh’s power sector

Updated 22 October 2019

Saudi energy giant to invest $3bn in Bangladesh’s power sector

  • Experts say deal will usher in more economic and development opportunities for the country

DHAKA: Saudi Arabia’s energy giant, ACWA power, will set up an LNG-based 3,600 MW plant in Bangladesh after an agreement was signed in Dhaka on Thursday.

The MoU was signed by ACWA Chairman Mohammed Abunayyan and officials from the Bangladesh Power Development Board (BPDB), officials told Arab News on Monday.

According to the agreement, ACWA will invest $3 billion in Bangladesh’s energy development sector, of which $2.5 billion will be used to build the power plant while the rest will be spent on an LNG terminal to facilitate fuel supply to the plant. Under the deal, ACWA will also set up a 2 MW solar power plant.

In recent months, both countries have engaged in a series of discussions for investment opportunities in Bangladesh’s industry and energy sectors. 

During the Saudi-Bangladesh investment cooperation meeting in March this year, Dhaka proposed a $35 billion investment plan to a high-powered Saudi delegation led by Majed bin Abdullah Al-Qasabi, the Saudi commerce and investment minister, and Mohammed bin Mezyed Al-Tuwaijri, the Saudi economy and planning minister.

However, officials in Dhaka said that this was the first investment deal to be signed between the two countries.

“We have just inked the MoU for building the LNG-based power plant. Now, ACWA will conduct a feasibility study regarding the location of the plant, which is expected to be completed in the next six months,” Khaled Mahmood, chairman of BPDB, told Arab News.

He added that there are several locations in Moheshkhali, Chottogram and the Mongla port area for the proposed power plant.

“We need to find a suitable location where the drift of the river will be suitable for establishing the LNG plant and we need to also consider the suitability of establishing the transmission lines,” Mahmood said.

“It will be either a JV (Joint Venture) or an IPP (Independent Power Producer) mode of investment, which is yet to be determined. But, we are expecting that in next year the investment will start coming here,” Mahmood said.

BPDB expects to complete the set-up process of the power plant within 36 to 42 months.

“We are in close contact with ACWA and focusing on the successful completion of the project within the shortest possible time,” he said.

Abunayyan said that he was optimistic about the new investment deal.

“Bangladesh has been a model for the Muslim world in economic progress. This is our beginning, and our journey and our relationship will last for a long time,” Abunayyan told a gathering after the MoU signing ceremony.

Economists and experts in Bangladesh also welcomed the ACWA investment in the energy development sector.

“This sort of huge and long-term capital investment will create a lot of employment opportunities. On the other hand, it will facilitate other trade negotiations with the Middle Eastern countries, too,” Dr. Nazneen Ahmed, senior research fellow at the Bangladesh Institute of Development Studies (BIDS), told Arab News.

She added that Bangladesh needs to weigh the pros and cons before finalizing such contracts so that the country can earn the “maximum benefits” from the investment.

“It will also expedite other big investments in Bangladesh from different countries,” she said.

Another energy economist, Dr. Asadujjaman, said that Bangladesh needs to exercise caution while conducting the feasibility study for such a huge investment.

“We need to address the environmental aspects, opportunity costs and other economic perspectives while working with this type of big investment. Considering the present situation, the country also needs to focus on producing more solar energy,” Dr. Asadujjaman told Arab News.