Bad Journalism on German Solar Subsidies Analysis – Why Media persistently gets it wrong

1 Feb, 2012
Solar Energy

I continue to be surprised by bad and shallow analysis of renewable energy subsidies done by media. Most of it is due to bad research and lack of investigative and unbiased journalism. Writers with little or no background in energy or cleantech sensationalize an issue taking a report from some biased thinktank. Here is one example from a website called ironically Reason.com which you can read here http://reason.com/blog/2012/01/31/black-hole-sun-germany-spends-100-billio

What the writer is saying that Germany is spending massive amounts of subsidies to get little amount of power. What he has missed

1) He is not comparing the subsidies for solar with that of fossil fuels. Does he know that Fossil Fuel Subsidies globally amount to $550 billion a year which is many times more than that given to Solar, Wind and others.Even a developed country like Norway gives 5 times more subsidies to fossil fuels than renewable energy

Norway has been hailed as the toughest cutter of Greenhouse Gas Emissions amongst the developed countries promising to cut Carbon Emissions by  30-40% by 2020 from the 1990 Levels.Compared to this USA has promised a measly  17% cut from 2005 levels and the EU  only 20% by 2020 from 1990 levels.Norway’s cost of cutting emissions is also quite huge $200 a tons of Carbon Dioxide.Norway has also promised to cut Carbon Emissions internally rather than buying cheap carbon credits from abroad using its massive sovereign fund.Note the Cap and Trade Kyoto Protocol has been criticized for being ineffectual in curbing Global Warming.However a NGO reveal today that Norway’s spending on Fossil Fuel Subsidies is $1.4 Billion annually which is 5 times more than on its Subsidy for Greener Forms of Energy.Note $550 Billion is spent worldwide on subsidizing Fossil Fuel Energy which is multiples of that spend on Renewable Energy.Norway is a major Oil Producer and its Huge Sovereign Fund of  $450 Billion has been built mainly through Oil Revenues.Therefore the massive subsidies on Oil is not surprising though incompatible with its commitment towards Climate Change.

2) He says that 18 billion euros is the cost of solar energy over 20 years . He conveniently forgets/ does not know the basic concept of time value of money.

3) He does not consider the costs on health,pollution,mining deaths and other social costs of fossil fuel electricity. He forgets to mention the BP Oil Spill and Fukushima Disaster.

4) He says it is cheaper to do energy efficiency than solar energy , a fact that is well know but will energy efficiency alone solve our global warming problems. Nobody doubts the fact that energy efficiency is cheaper but you need renewable energy as well

Mainstream media is woefully inadequate in presenting the problems that we are faced with particularly in a topic as complex as climate change. Taking a report and presenting it without a balanced opinion makes it worse.

Germans are happy paying 10-15% extra for electricity  Green and Clean Energy which would make a Better World. Most of the other developed countries like USA,Canada have shown only shocking apathy towards global warming . Which is better , it does not take a rocket scientist to figure it out. Germany has alone brought solar energy prices near grid parity due to its strong and pragmatic support to green energy  .Though the FIT policy is not perfect it is much better than policies implemented elsewhere.

Read more on Pros and Cons of Renewable Energy here

Global Warming of 2 Degrees to Halve India’s Wheat Production to 40 Million Tons

1 Feb, 2012
Climate Change

In these days of economic crises it has become unsexy to talk about Global Warming and Climate Change which pose a much greater threat to mankind. The Western countries have turned apathetic towards climate change with most like Canada, USA and UK showing shocking attitude towards Global Warming . The reason is that rich countries can throw resources at ameliorating the affects of climate change . The poor countries have little in terms of resources to either slowdown climate change or change the attitude of the richer countries. South Asia and Africa two of the poorest regions in the world will face the worst of the global warming affects. A new study has indicated  that India’s wheat yield could be halved to 40 million tons a year from the current 80 million tons due to rising temperature. The reason is that wheat yields will come down as temperature goes up by 2 degrees centigrade or more.

Extreme heat can accelerate wheat aging, an effect that reduces crop yields. The overall decline could be as much as 50 per cent with two degree increase in temperature and is way above than what has been anticipated in existing crop forecasting models.The new research implies that climate warming presents even greater challenges to wheat production in Punjab, Haryana, Uttar Pradesh and Bihar than current models predict.
The team comprising scientists from Stanford University and International Maize and Wheat Improvement Centre in Mexico studied the wheat growing regions of Indo-Gangetic plains with satellite data for nine years to pick up the signs of early maturity in wheat and compare it against rising temperature.

Climate Change has started happening already but like IPCC it is being ridiculed because there is no proof. Climate skeptics can use the complexity of the science of global warming as a weapon to disrepute the whole theory. But there is too much overwhelming series of facts like the hottest years in centuriers, ice sheets melting , ferocious storms to just say that we can’t say for sure.

Recently the weather conditions have become extreme in many parts of Asia and Europe.While the global temperatures this year are said to be the highest since records were kept,devastating climate conditions have affected different parts of the world.It reads straight out of an Global Warming Disaster 101.Global Wheat and Rice Prices have increaseddramatically as a Record Drought Affects Russia . China and Pakistan are seeing devastating floods which have displaced millions besides endangering the fragile Pakistani Economy.While  the anti Climate Changers will say that it has nothing to do with human induced carbon emissions,there is still nothing to prove that it is not so.Doomsday scenarios projected by the end of the century if global temperatures increase by more than 2 Degrees Centigrade are playing out right now.

Rising Food Prices in India and elsewhere are already causing havoc with Food Riots, Hunger and Malnutrition. Hundreds of Millions in India go Hungry everyday without the Global Warming Affect. What would happen when Food Production falls in Halve is just too painful to analyze.

The recent weather catastrophe in different parts of the world has pushed up the food prices.The Russian Wheat Export Ban imposed earlier had exacerbated the situation with news coming of the ban being extended into 2011.The exponential increase in wheat price which had moderated earlier is starting to soar again.The rising food price has led to riots in the Maputo town in Mozambique where food prices were increased by25%.Food insecurity is raging in the poorest parts of the world amongst populations which are most vulnerable to slight increase in food prices.Wheat Prices have increased 74% in the last 3-4 months and other grain prices have moved up in sympathy as well.Food inflation is rearing its ugly head with India reporting double digit inflation in Food Prices.China has also sown increased wheat and port prices due to incessant flooding.Major Food importers like Bangladesh are increasing their imports of Rice as Wheat is expected to be in short supply.Animal Feedstock is being substituted with corn based products from wheat based products.This has led to a  general rise in prices of all grains leading to worldwide distress.Major food producing and consuming countries like China and India are clamping down on exports of food items as it is every country on their own.Globalization of Agriculture has not proved to be more of a bane than boon as speculation in agri futures has led to a faster rise in food prices.The future of Food Security looks bleak with increasing population and affluence marching ahead of the food growth.

India’s Consumer Companies enter Lucrative Solar Products Business

30 Jan, 2012
Energy,Solar Energy

The Solar Products Business is booming not only from the Solar Power Plants but also in consumer products business. So not are big conglomerates like Mahindra, GMR , Reliance getting into the lucrative booming solar power in India, but now water purifier companies in India are too getting into the act. India’s biggest water purifying company Eureak Forbes which is found in almost every Indian home is going to start selling solar lighting products like torches and lanterns.

The company is going to market solar products under the “EuroDiya” brandname . Diya means Light in Hindi and Euro is the company’s brand. The products are to be sold in the $10-50 range with the technology and products coming from a US company. Note solar consumer products have a massive potential in a country where almost 40% do not have access to a power grid.

Note Solar Lamps can compete economically with substitutes like kerosene lamps which don’t only consumer costly fossil fuels but generate pollution as well. Other companies like D.Light already have a strong presence in the solar lamps business.

Solar Lamps or Solar Lanterns have seen astounding growth in India driven mainly by the lack of access to electricity and the high costs of Kerosene or gas lamps.Note Solar Lamps have been so successful in India mainly due to their economic utility rather than their Green Characteristics.Note 100,000 Indian villages do not yet have electricity which means that the productivity comes to a complete stop in the dark.Poor schoolchildren cannot study in the dark and people cannot work in the night either.Note Kerosene a dirty oil refined product is the main source of energy for millions of Indian citizens.Kerosene is a health hazard resulting in accidental fires and causing a lot of smoke which can lead to various respiratory diseases.Note Kerosene is subsidized by the Indian government and distributed through the Public Distribution System (PDS) which is a massively corrupt and inefficient system.The Kerosene is given in limited quantities and is not sufficient to Light the Darkness for a month or more.The advent of Solar LED Lamps has been a godsend solution to this problem.

Indian Conglomerates entering Solar Energy

The Indian Solar Power has been one bright spot in the gloomy infrastructure and engineering sectors in 2011. With share prices crashing with growing corruption, land acquisition and financing problems, Solar Energy has surged in India thanks to government support and subsidies . While a number of Green Technology companies have started up to capitalize on the growing renewable energy trend, the established construction companies in India have not been far behind . While utilities like Tata Power, Adani, Reliance Power, NTPC have already built or are setting up power plants based on solar panels , L&T has become a major solar EPC players . L&T is now raising debt with a $100 million issue to fund its solar expansion plans .

Water Purifier Manufactuers in India

List of Water Purifying Manufacturers/Suppliers/Companies in India

  1. Kent Technologies – Kent purifiers are trusted by over 1 million customers spread across the country and have an established track record of over a decade in the water purification industry. The company is a pioneer in bringing revolutionary Reverse Osmosis (RO) technology to India. KENT started its operations in India in 1999 & is today a strong organization with offices spread across India. KENT has lakhs of satisfied customers to its credit worldwide. Kent offers varied range of products for any application – mineral RO, UF gravity, UV technology & UF tap water purifiers. Be it entry level purifier to technology driven high capacity commercial purifiers. They have two production facilities located in Uttaranchal.
  2. Eureka Forbes – is a part of the Shapoorji Pallonji Group and today it is a 12 billion INR, multi product and multi channel corporation.It started operations in 1982, & today have become the undisputed leaders in domestic and industrial Water Purification Systems, Vacuum Cleaners, Air Purifiers & Security Solutions. It is one of Asia’s largest direct sales organization. It serves more than 131 cities and 398 towns across the country. Eureka provides different ranges of:Domestic water purifiers Aquaguard – UV, RO, UF,  UV+RO+UF, Aquasure – RO, UV, storage & Heavy metal remover & Institutional water purifiers.
  3. Hindustan Unilever Ltd. – HUL is India’s largest Fast Moving Consumer Goods Company with categorised business like soaps, detergents, shampoos, skin care, toothpastes, deodorants, cosmetics, tea, coffee, packaged foods, ice cream, and water purifiers. With a market capitalization of  Rs. 61,000 crores, the Company is a part of the everyday life of millions of consumers across India. The company earned revenues of Rs. 5,000 crores with a net profit margin 12%. Its parent company is Unilever, which holds about 52 % of the equity. Its portfolio includes leading household brands such as Lux, Lifebuoy, Surf Excel, Rin, Wheel, Fair & Lovely, Pond’s, Vaseline, Lakmé, Dove, Clinic Plus, Sunsilk, Pepsodent, Closeup, Axe, Brooke Bond, Bru, Knorr, Kissan, Kwality Wall’s and Pureit.Pureit’s unique Germkill Battery technology kills all harmful viruses and bacteria and removes parasites and pesticide impurities, giving micro-biologically safe drinking water (meets the regulations by the EPA in USA). It does not need gas, electricity or continuous tap water supply. It makes the water clear, odourless and good-tasting.This technology was developed by HUL, by a team of over 100 Indian and international experts from HUL and Unilever Research Centres.

Indian Renewable Energy Stocks – Bubble Bursting or Investor Panic

26 Jan, 2012
Energy,Orient Green Power,Renewable Energy,Solar Energy,Suzlon,Wind Energy

Quick quiz. What is common to Suzlon, Moser Baer, Indo Solar, Websol Energy systems and Orient Green Power? All these stocks had successful runs on the stock market and hyped as the next game changers in wind energy, semi conductors, solar power and hydel/geo thermal power. Valuations were more on growth stories than through an hard nosed DCF spreadsheet. But now, they trade at record lows(like other stocks but what is different is the pressing fundamental concerns in each case). Is this a bubble finally bursting, or are investors panicking?

  1. Suzlon cherishes an ambitious vision of being the technology leader in the wind sector, and among the top three wind companies in all the key markets of the world. It expects that by 2015, total worldwide installation of wind energy would cross 442 GW which is almost 2.3 times of the current installation. This will cover about 7.5% of the global electricity supply by then, as opposed to just 4% now. But the solar bubble collapse in Spain, France and Germany(where subsidies were almost withdrawn) has put concerns on the very business model of solar(preferential feed in tariffs at peak hours(morning/noon)), as mentioned by First Solar in its 10K filing. So with gradual withdrawal of subsidies to wind energy generators, will Suzlon be able to regain pricing power for its equipment? Even in India, the most recent round of wind energy purchase tenders, saw bidders discount the CERC approved tariffs of Rs 17.91 by nearly 30%-35%, indicating that new players are willing to slash prices to gain market share. This would impact supplier pricing as well.
  2. Moser Baer, Indo Solar and Websol Energy systems, wanted to capitalize on the boom in demand for solar photovoltaic cells. Indo Solar wanted to take benefit of the 25% capital subsidy scheme for project capex over Rs 1,000 crores( as per the Special Incentive Package scheme announced by the Ministry of Communications and Information Technology, Government of India). But the global over supply(especially from China) backed by costs increases in key raw materials, led to EBITDA margin compressions, and short of domestic protectionism, I do not see a bright future for these stocks. While they are all trying vertical integration, entering into adjacent industries etc, the core business model is facing challenges due to global supply scenario, and price driven market.
  3. Orient Green Power is a slightly different proposition though. In 1H’12(Sep11 half year) alone, it added 80MW of wind energy, and had 300MW generation capacity(250MW wind+50MW biomass) in operation. However, with 250MW capacity wholly in Tamil Nadu and that State Electricity Board being in financial distress, investors seem to have discounted the stock which trades at P/BV of 0.5, despite its aggressive growth plans to reach 550MW capacity by Jun’12! At market cap of Rs 610 crores(with debt of Rs 190crores), the company had an EV of Rs 800 crores(assuming the Rs 170 crores of cash offset the current liabilities of Rs 195 crores, as the loans and advances of Rs 808 crores would presumably not be liquid), which would imply an EV of Rs 2.67 crores/MW, nearly half the estimated Rs 5.3cr/MW replacement cost of that capacity.

So have the factors affecting thermal power stocks(bankruptcy like status of SEBs, increased fuel costs, project execution delays) rubbed off disproportionately on these stocks as investors blindly herd together to sell power stocks? Or is it that the favourable economics may change? For export oriented equipment manufacturers like Suzon, the subsidy withdrawal story may play out, but for domestic generators, the national solar mission and other such plans would seem to give a secure price floor and assured market to sell the generated power.  These stocks are worth tracking though, as a hedge against the general power sector decline.

The paragraphs below features previous GWI takes on the above Green Stocks and is not part of Anand’s article

You can read about the GWI List of Green Companies in India

Previous GWI take on whether Suzlon is a falling Knife

Suzlon History

Suzlon,the Indian Wind Turbine making company has languished in red ink since the beginning of the Global Financial Crisis in 2008.The company started by Tulsi Tanti in 1995 was a shining example of Asian CleanTech with a 10% global marketshare and ranking amongst the top 5 Wind Turbine Makers .Suzlon buoyed by its success had bought controlling equity stakes in Turbine Gears producer Hansen Transmission and European Wind Turbine producer Repower.Suzlon wanted to leverage Repower’s technological expertise to enhance its own product offering.Like other Indian companies with global ambitions like Hindalco,Tata Steel and Tata Motors,it took on a lot of debt to buy these companies at the peak of the global economic cycle.The GFC resulted in a twin whammy for Suzlon.On one hand its end markets collapsed as project financing disappeared and on the other hand its huge debt burden became unsustainable.The company has failed to recover from the GFC as competition in the Wind Turbine industry has increased with the rise of Chinese players like Sinovel,Goldwind and A-Power.With the 2 biggest markets of USA and China dominated by domestic players,Suzlon has become a shadow of its former self.While other Indian companies have recovered strongly with the Global Economy,Suzlon continues to lose huge amounts of money.Its recent 2Q10 results were quite bad resulting in the share shedding 6% to Rs 50.This is almost 90% below its peak price in the heady days of 2008 .So is Suzlon a Fallen Angel which could turnaround to become a multibagger or a Falling Knife luring investors into further losses.Here are the pros and cons of the argument.

Orient Green Power IPO Analysis

Orient Green Power Ltd (OGPL) is India’s Largest Green Utility and is one of the areas that is a good way to invest in India’s Green Energy Sector.The company is owned by the Shriram Group and a couple of PE Players will issue around Rs 900 crores (~$180mm) which will result in a market cap of $450mm.OGPL is a relatively new company setting up and acquiring most of its 200 MW capacity in the last year which comprised of 152 MW of Wind Energy and the rest is Biomass Energy.The company plans to increase this capacity 4 fold to around 1000 MW in the next couple of years with Power Plants in  India,Europe and Sri Lanka.The centerpiece of this expansion will be a 300 MW Wind Energy Plant in Tamil Nadu for which $10 million has been already been spent.The company’s past profits and cash flow have been negative which is not exactly a concern given that most of the capacity was set up in the last year or so.I like the company’s growth plans and the sector in which it operates.India suffers from a huge power deficit and Renewable Energy is being heavily promoted through Government Subsides and Renewable Energy Mandates by the CERC.Trading of Renewable Energy Certificates (RECs) should start in a year or so giving additional revenue streams to Green Energy Producers.Here are the pros and cons of the issue

 

(The author Anandh Sundar is from the IIM Ahmedabad 2010-12 batch, and a ranker in CA/CS/CWA exams. He blogs at http://financeandcapitalmarkets.blogspot.com/, and http://specialsituationsindia.blogspot.com/  and has a keen interest in investing)

Indian Wind Energy Developers to focus on Electricity Production than Accounting Gimmicks with Depreciation Removal in new Tax Code

18 Jan, 2012
Energy,Wind Energy

Subsidies of different kinds are given to the Renewable Energy Industry around the world . These incentives or subsidies which they are better known as are in the form of

a) Capital Subsidies

b) Feed in Tariffs

c) Tax Breaks in form of Accelerated Depreciation

d) Renewable Energy Certificates

e) Carbon Credits.

Wind Power in India has been wildly successful and is the 5th biggest in the world because of substantial incentives from the government. One of them has been accelerated depreciation which has made hundreds of companies and rich individuals buy small wind farms. This helps them offset their tax liabilities providing a substantial 2 digit returns. However the big drawback in this from of green subsidy is that it does not incentivize the production of wind energy. Once the wind farm is set up, the incentive to produce lots of electricity is not there unlike the case of Feed in Tariff where your returns are solely based on the electricity generatino.

India is coming up with a new Direct Tax Code in April 2012 which will substantially overhaul the current tax system in the country. In this the accelerated depreciation given to wind power turbines in India will be done away with. This might lead to a dip in the wind power production addition in the country. However in the Long Term its a plus as it would force Indian Wind Energy Developers to focus more on Electricity Production than Accounting Gimmicks

Wind Energy Companies in India that will be Affected

1) Suzlon Energy – Suzlon Energy is the biggest Wind Energy Company by far with 4-5 Gigawatts of WTG Capacity per year.Its subsidiaries Hansen Transmission and RePower are also big players in the Wind Energy in Europe.The Company has seen its revenues and profits take a huge hit in recent times but has been recovering slowly.

2) RRB Energy – The company has a long history and manufactures Wind Turbines at its plants in Tamil Nadu.The Company has a capacity of 300 MW which it is expanding to 700 MW.The Company makes only 2 models with power rating of 600 Kw and 1.8 MW.Merill Lynch has made a small investment in this company.

3) NEPC India – This company was one of the wind energy heavyweights and a stock market darling earlier.However It no longer remains an active player in the Indian market .Heavy Debt and Bad Management drove to this company to the ground despite being a pioneer in the Indian Wind Power Market.

4) Auro Mira Energy – The company is more of a Green Utility rather than a full fledged WEG manufacturer.It has made plans to manufacture Wind Turbines in the future.It has attracted funds from Baring and IFC to push forward its Green Plans.Auro Mira Energy is a Tamil Nadu based Green Utility backed by a clutch of PE investors like IFC etc.It has 2 biomass plants of 7.5 MW and 10 MW and plans to build around 100 MW of hydro and biomass capacity over the next 2-3 years.

5) Regen Powertech - It is a small scale WTG Supplier like RRB Energy which recently set up a small 300 MW manufacturing facility in Tada,Andhra Pradesh recently.The company licenses technology from Vensys to manufacture 1.5 MW gear-less Wind Turbines.The company has managed to supply both big and small wind farms over the last 2 years.The company is supported by the PE arm of Future Group.

6) WinWind – The company is not exactly a domestic company rather one with a Finnish Origin.It is owned by the Abu Dhabi Masdar ,Siva Group and the government of Finland.It has recently established a 1000 MW capacity in Venga,Tamil Nadu and also has a 500 MW plant in Finland as well.The company plans to producer 3 MW Turbines at its Indian plant as well.

7) Pioneer Wincon – The company is a JV between the Pioneer Group and Wincon of Denmark.It makes small 250 KW Turbines and is a bit player with 30 years of operations in India.The Company remains a small static player in the Wind Energy Market of India.

8) Chiranjeevi Wind Energy – A Small bit player like Pioneer Wincon which engages mostly in the sale of small 250 KW Wind Turbines.Like Pioneer Wincon it has sold a number of these Turbines to small companies mainly in the Southern Part of India.

9) Lietnar Shriram Limited - The company is a 50:50 JV betwen the Shriram Group of India and Lietnar of Italy.The company makes gearless turbines of 1.5 MW capacity and has supplied to small farms in Maharashtra.The company has a major inhouse customer in the form of Orient Green Power which is building a 300 MW farm in Tamil Nadu using Lietnar Shriram Wind Turbines.

10) Kenersys - The company is part of the Baba Kalyani Group which is a major forgings manufacturer in India.It was bought over in 2007,when the Kalyani Group and PE firm First Reserve bought over the German company RSB Consult.The Company mainly  makes 2 and 2.5 MW turbines and has production facilities both in India and Germany.It has wind design capabilities between 1-3.6 MW and with a powerful parent, it could become a success in the future.Amongst the newer wind energy companies like Lietnar,RRB Energy,Regen and WinWind,it looks like the one with most potential

Source – http://www.bloomberg.com/news/2012-01-17/india-may-end-tax-break-for-wind-farms-this-year-official-says.html

How Massive 1000 Megawatt Solar Energy Farms in Chinese Deserts will Boost 2012 Demand

16 Jan, 2012
China,Solar Panels

China add the most electricity capacity annually in the world at around 100 GW and its total electricity generation capacity is second only to the USA which it will surpass in the next few years. China is highly dependent on thermal power for its energy needs which is becoming scarce and expensive by the day. Not to speak of the big disadvantages of coal as a fuel which causes thousands of deaths each year. Solar Energy has now reached grid parity in many parts of the world thanks to the low cost cheap solar panels being made by Chinese solar panel producers. With many countries now thinking of putting an anti dumping duty on Chinese solar modules, the government is looking to boost domestic demand . Chinese solar panel Tier 1 players like LDK, Suntech, Trina and Yingli besides some others are the biggest beneficiaries of this new solar policy from China.

China is looking to set up massive 1000 MW solar energy farms in its desert regions of Qinghai, Mongolia ,Tibet and others .Some of these regions have the highest solar radiation in the world with over 2700 hours of sunshine. What this means is that solar power can be profitably be generated at 8c/ Kwh .Though higher than coal generate power , this price is constant for 30 years even as thermal, gas and other forms of fossil fuel will keep going up besides increasing carbon emissions. These massive 1000 MW farms can be now be built quickly as Chinese solar companies have massive capacity which can supply solar panels at a very cheap price of as low as 80c/ watt.

China raises Solar Energy Capacity Target to 50 GW from 20 GW in 2020

China’s Solar Panel Manufactures have enjoyed a massive boom phase though domestic solar electric capacity has failed to keep up.China has been rewriting its renewable energy plan  in the wake of the Fukushima Nuclear Energy Disaster in Japan.Note there has been a strong global backlash against nuclear energy around the world and 7 nuclear plants in Germany have been closed all but in name.Other countries like South Korea,Italy,Switzerland are rethinking of what do about their nuclear reactors giving the massive tail risks with nuclear generation.China had a target of only  20 GW of solar by 2020 has decided to raise the target by  150% to 50 GW according to the country’s leading energy planning authority NDRC.Note China installed more than 15 GW of Wind Energy in 2010 alone becoming the world’s largest Wind Energy Market by far.Solar Energy strongly lags Wind in China despite China having the biggest solar panel manufacturing industry in the world.Its Golden Sun and other Solar Subsidy programs have been small in absolute terms compared to its huge electricity capacity.Note Wind Power in China has reached a saturation level with almost 18 GW installed in 2010 ,with such a high level further growth looks quite difficult.

3 Signs of Trouble for Chinese Wind Energy

1) Sinovel has canceled shipments of Electrical Control Systems (ECS) for its Wind Turbines from American Superconductor due to high inventory levels and refused past payments as well.With the biggest Manufacturer of Wind Turbines reporting inventory problems,the situation of the rest can’t be that good

2) The Chinese National Energy Bureau was considering tighter procedures that would include requiring local governments to get the written approval before going ahead with wind projects with installed capacity of less than 50 MW.Earlier it used to be more than 50 MW

3) Hundreds of Wind Turbines have not been connected to the Power Grid due to lack of capacity or transmission lines.China emphasises on investment without factoring in returns is one cause of these orphan wind turbines.

Qinhai to build 1 GW solar power plant

The government of Hainan Tibetan autonomous prefecture and GSF Capital signed amemorandum on Sunday, planning to build a 1-GW solar power base in this underdeveloped prefecture and bring abundant electricity for the local people.
The country plans to build solar power plants mainly in Tibet, Inner Mongolia, Ningxia,Gansu, Qinghai, Xinjiang and Yunan.

Most Popular

Recent Comments