Mixed Greens: China solar surges on Japan FiT confirmation | RenewEconomy

Mixed Greens: China solar surges on Japan FiT confirmation

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Solar stocks jump as Japan confirms generous renewables subsidies; RWE says auf wiedersehen to nuclear; UK rushes to utility scale solar.

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Shares in solar giant Suntech Power led advances in Chinese stocks yesterday, sending the benchmark index to the highest level in three weeks, after Japan introduced incentives – flagged yesterday – to boost the nation’s uptake of renewable energy. Bloomberg reports that its China-US Equity Index (CH55BN) of the most-traded Chinese shares in the US climbed 1.1 per cent to $US92.39 at the close of trading in New York, the highest since May 29. Shares in Suntech, the world’s biggest solar manufacturer, 9.2 percent to $2.01, a four-week high, after the Japanese government set a premium price for solar electricity, at about triple what industrial users now pay for conventional power. LDK Solar, the world’s second-largest maker of wafers, rose 1.8 per cent to $2.21, its highest price since May 25.

As reported yesterday, Japan’s move to subsidise clean energy resources like solar, wind and geothermal has been tipped to expand revenue from renewables and related equipment to more than $US30 billion by 2016, according to estimates from brokerage CLSA. The subsidies from July 1 are aimed at helping the country to cut its reliance on not only nuclear, but oil and LNG for energy needs, says Reuters. The scheme requires Japanese utilities to buy electricity from renewable sources such as solar, wind and geothermal at pre-set premiums for up to 20 years. Costs will be passed on to consumers through higher bills. Utilities will pay ¥42 (53 US cents) per kilowatt hour (kwh) for solar-generated electricity, double the tariff offered in Germany and more than three times that paid in China. Wind power will be subsidised at least ¥23.1/kwh, compared with as low as 4.87 euro cents (6 US cents) in Germany.

RWE says auf wiedersehen to nuclear

Germany’s second-biggest utility, RWE, has announced it is abandoning plans to build any new nuclear power plants outside its home market, where the government decided last year to phase out nuclear power. “We will not invest in new nuclear power plants,” said the company’s incoming chief executive Peter Terium, who is due to take up the reins on July 1. “We can no longer afford the financial risks and the surrounding conditions for nuclear power plants.” Reuters reports that RWE has had to reinvent itself since the German government’s decision to phase out nuclear power generation, shedding assets – including one of its most profitable domestic plants, after a security stress test for all nuclear plants in Germany – and tapping new growth areas such as renewable power.

Three months ago, the Essen-based utitiliy and E.ON pulled out of a £15 billion plan to build new nuclear power stations in Britain, citing Germany’s sudden decision to phase out nuclear power, the high running costs of their Horizon joint venture and the long lead times required for nuclear plants resulted as behind their decision to sell the venture. Dutch utility Delta and its partners EDF and RWE earlier this year postponed plans to build a second nuclear power plant in the Netherlands because of the poor investment climate and low electricity prices.

Deutsche Welle reports that RWE also plans to continue to move out of all nuclear projects that it is already involved in abroad. The paper says the utility, while keeping a low profile on new gas and coal-fired plants, is planning to invest heavily in renewables, with a particular focus on solar energy. Terium has set his sights on pursuing and developing opportunities in southern Europe and northern Africa, encouraged by the steep drop in prices for solar panels.

Even the UK is feeling a little sunny …

Demand for utility scale solar projects in the UK is soaring, despite the winding back of feed in tariffs. Bloomberg reports that the cost of utility scale solar has fallen so much in the last year (by half), that it is even making sense in the UK, where developers are helping to fund them with renewable obligation certificates (like Australia’s RECs) which previously had only been accessed by wind energy projects. According to Bloomberg, more than 600MW of utility scale solar were put on the drawing board in the UK in the month of April alone – four times the amount in operation. “It’s kind of ironic,” Jeremy Leggett, chairman Solar Century Holdings, told Bloomberg in an interview. “The government tried to avowedly kill large ground-mounted solar last year and now it’s back.”

In the UK, a megawatt-hour of solar energy qualifies for two tradable certificates over 20 years, the same as offshore wind. They now trade at about 42.5 pounds ($67) a certificate – significantly higher than in Australia, where developers of wind and utility scale solar only get one certificate currently worth around $36/MWh. Bloomberg says proposed solar plants include a 40MW park at a disused airfield, and a 25MW facility by Hike Energy and a 30MW facility by Lark Energy, a unit of a local housing group. The largest solar park in the UK to date have been 5MW. Inazin expects to complete more than 100MW of large-scale solar projects this year, Anesco, backed by Scottish utility SSE plans 50MW and Hike Energy plans at least 200MW this year.

Sunny Australia plans a grand total of 10MW of utility scale solar this year.


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