China’s wind power photovoltaic power generation has entered the bidding era or triggered a major reshuffle in the industry

　　"This time, the liberalization of competition, the decline in new energy electricity prices is an inevitable trend, and it is very likely to promote a new round of industry reshuffle." On June 2nd, when talking about the newly announced wind power and photovoltaic power generation projects will adopt competitive allocation, giving priority to the construction of projects with low subsidy intensity and large slope retreat, Ningxia industry insiders from China’s first new energy comprehensive demonstration zone and the first pilot area of power auxiliary service market in northwest China said so.

　　The New Deal is bound to affect the investment enthusiasm of enterprises.

　　On May 30th, the National Energy Administration issued the Notice on Matters Related to the Construction of Wind Power and Photovoltaic Power Generation Projects in 2019, clarifying that wind power and photovoltaic power generation projects are divided into two categories: those that do not need state subsidies and those that need state subsidies. On the basis of organizing power grid enterprises to demonstrate and implement the conditions for power transmission and consumption of affordable power grid projects, priority will be given to promoting the construction of affordable power grid projects, and then competitive allocation of projects that need state subsidies will be carried out.

　　The relevant person in charge of the new energy department of the bureau said that the purpose of this move is to improve the competitive allocation mechanism of projects requiring state subsidies and reduce the dependence of industry development on state subsidies. The general orientation of wind power and photovoltaic power generation this year is to "adhere to the general tone of striving for stability, accelerate technological progress and reduce subsidy intensity, coordinate project construction and absorptive capacity, and achieve high-quality development".

　　This policy, known as "the most market-oriented policy in history", marks that the national wind power photovoltaic has entered the bidding era.

　　Since the "Thirteenth Five-Year Plan", the application scale of wind power and photovoltaic power generation in China has been continuously expanded, the technical level has been significantly improved, and the cost has gradually decreased. At the same time, however, the subsidy gap continues to widen, and some areas abandon wind, light and electricity.

　　According to the latest figures, the installed capacity of new energy in Ningxia Power Grid is about 15 million kilowatts, accounting for 49% of the generated electricity and 102% of the electricity load, making it the first provincial power grid in China where the output of wind power and photovoltaic power generation exceeds that of the whole regional network. From 2013 to 2018, the average annual growth rate of wind power installed capacity in Ningxia reached 27%, the average annual growth rate of photovoltaic installed capacity reached 40%, the average annual growth rate of new energy installed capacity reached 32%, and the proportion of new energy installed capacity ranked second in the country.

　　An expert from Ningxia New Energy Research Institute, who did not want to be named, analyzed that the fierce competition of energy investment enterprises is mainly reflected in the competition of on-grid electricity price. As soon as the electricity price drops, the return on investment will also decrease, which will inevitably affect the enthusiasm of enterprises to build photovoltaic power plants. On the other hand, it is reflected in some photovoltaic power generation enterprises, which must invest by selling power stations to digest their production capacity, which also has a great impact on their enthusiasm for building power stations.

　　The main reason is that the price of photovoltaic construction has dropped sharply in recent years, and the investment cost has dropped due to the decline in equipment prices.

　　According to the expert, the initial formation price of 20 yuan was the highest per watt, and last year it was reduced to the lowest value, 1.6 yuan per watt. "This also means that the electricity price has reached a low level. The lowest electricity price in Ningxia in the past two years was 0.55 yuan. Now, if competition is liberalized, it is estimated to reach about 0.35 yuan, which is basically close to parity Internet access." He said frankly.

　　Follow the plan and make active adjustments at the same time.

　　Ningxia is rich in wind energy and solar energy resources. Since it was approved by the National Energy Administration in 2012 as the first comprehensive demonstration zone of new energy in China, the solar material and equipment manufacturing industry has entered a stage of rapid development, and a complete industrial chain including silica, industrial silicon, polysilicon, solar cells and components, solar power stations and so on has been built.

　　According to Ningxia 2015 — Planning of Photovoltaic Park in 2020, Ningxia will invest more than 100 billion yuan in photovoltaic industry in five years, and will take the lead in creating a development model of "park-oriented, intensive and large-scale" new energy projects in the country, and build 10 large-scale photovoltaic parks and related supporting industries through centralized planning.

　　"The biggest dilemma faced by photovoltaic power generation enterprises is that the state subsidized electricity fee is not in place, resulting in a shortage of cash flow. The income from electricity sales by enterprises can only be recovered from the benchmark electricity price, and most subsidies cannot be recovered. " The expert revealed.

　　According to reports, up to now, the state-subsidized electricity fee in Ningxia has only been replenished until March 2017, and the two-year state-subsidized electricity fee has not been put in place, resulting in a very tight cash flow of photovoltaic power generation enterprises, and many enterprises have been forced to transfer.

　　In the face of the introduction of the New Deal, Zhang Yongding, a professor at the School of Business of Yinchuan University of Energy, bluntly said that "it is a catfish effect, which will better play the role of the market in allocating resources". Based on his working experience in enterprises and years of teaching research, he said that the state used financial subsidies and other incentives to increase the proportion of renewable energy in the whole energy structure, but the effect was not very good, and some enterprises did not play their due role with subsidies. The introduction of competition mechanism now is to promote the rapid development of the industry.

　　Wang Linling, an associate researcher at the Institute of Comprehensive Economics of Ningxia Academy of Social Sciences, also believes that enterprises should follow the national strategic planning and make corresponding adjustments in time. But at the same time, he hopes to have a step-by-step adjustment process, so that enterprises can gradually adapt. After all, this policy has a certain impact on the investment enthusiasm of enterprises.

　　"Leading photovoltaic power generation to reduce costs, subsidize and achieve parity has risen to the national strategic level. We will take active measures to deal with and cooperate, and hope that the state can help enterprises get out of the predicament and develop healthily, by going up one flight of stairs." The person in charge of a photovoltaic power generation company in Ningxia said that from its own point of view, it is to strive to reduce the cost per kilowatt; To put it further, it is to strive for Ningxia power grid not to limit electricity, otherwise it will cause great trouble to the "breakthrough" road of photovoltaic power generation.

　　(Science and Technology Daily, Yinchuan, June 2nd)