Giant Chinese State Owned Utilities expectedly Win most of Solar Projects with Loss Making Bids

China had recently put up 280 MW of Solar Projects up for Bidding in the second such case in a time span of 1 year.These projects saw stiff competition from China’s Big 5 Power Utilities.The bidders went as low as $0.108/KwH which pretty much ensures that the developer will see big losses in his investment.But for the Big 5 Utilities,these projects are small change for their companies massive billion dollar cash flows.It allows them to take a first mover advantage in the growing Green Energy Market in China which is going to be one of the biggest in the coming decade.According to unconfirmed reports China Power Investment has won 7 out of the 13 projects with bids ranging from 10-15c/KwH.The other utilities are also said to have won the other projects.No small time developer could hope to compete at these prices,so it was a no brainer that these SOE would win these Solar Energy Projects.

Don’t know how these projects will further the cause of Solar Energy in China as they don’t help in formulating realistic Feed in Tariff Rates for the Government’s National Energy Administration (NEA).China has long been delaying the introduction of a Feed in Tariff (FIT) for Solar Energy.Note many major countries in the world except for China  and the USA have Feed in Tariff Programs to promote Solar Energy.In fact 75% of the world’s solar energy installations are dependent on the FIT subsidies.

China Power Investment Wins Seven Solar Projects, Journal Says – Bloomberg

China Power Investment Corp. has won bids for seven solar concession projects, China Securities Journal reported, without saying where it got the information.Huanghe Hydropower Development Co., a unit of China Power Investment, won the right to build the 30-megawatt Gonghe solar power plant in Qinghai province with a bid of 0.73 yuan (11 cents) a kilowatt-hour, the lowest in the tender for 13 solar projects. Telephone calls to China Power Investment’s media relations office in Beijing seeking comment went unanswered.

China is using a bidding system to grant concessions to build and run solar plants after tenders for such projects were introduced last year. Xinjiang Energy Co., another unit of the Chinese state-owned utility, was awarded the concession to develop the 20-megawatt Hetian plant in Xinjiang Uyghur Autonomous Region with a bid of 0.99 yuan a kilowatt-hour.