The rapidly changing face of Chinese electricity generation has been highlighted by two landmark agreements involving the world’s largest solar manufacturer, Yingli, and two state-owned coal and nuclear energy operators.
Last week, Yingli announced a partnership with Datong Coal Mine Group, the third largest state-owned coal miner in the country, to develop up to 100MW of distributed solar in Shanxi Province.
This week, Yingli announced it has teamed up with the state-owned China National Nuclear Corporation (CNNC) to develop 500MW of distributed generation solar projects across the country.
The deals come as China transitions rapidly from the world’s biggest solar module manufacturing centre to the world’s largest consumer of solar modules.
More than 12GW of solar PV is expected to be installed in China in 2014 – and more than 15GW in 2015. Although there are several “mega” projects such as a 1GW facility proposed for a remote desert in the western Xinjiang province, most of this development will come in the form of ‘distributed” generation – mostly rooftop solar and small scale ground mounted installations.
The distributed generation market, which is tipped by some analysts to account for up to one third of generation capacity in some major markets. The fact that coal and nuclear companies, whose interests have focused on centralized generation for the last few decades, are now interested in decentralized energy suggests that they, too, spot the trend and want to make sure they are part of it.
The Yingli deal with Datong will see an initial development of 20MW of distributed solar in the city of Shuozhou. Yingli will provide the know-how and technology and development expertise, while Datong will supply the financial grunt. The two companies have already combined for a 20MW project.
Chengsheng Li, who heads Shuozhou Coal Power and heads the new venture, said the partnership “echoes the national target for the building of a beautiful China” and will help to meet national targets for clean electricity generation.
The Yingli deal with CNNC subsidiary China Rich Energy will see a pipeline of 500MW of distributed solar built close to end-users. CNNC will install 200MW of solar projects on its own sites, which include nuclear generation.
“While CNNC remains committed to nuclear power development, we are increasing our activities in the renewable energy space, in order to expand our development space,” said Hongchao Xu, China Rich Energy’s deputy general manager and chairman of the joint venture. “We believe we will make a powerful combination.
Analysts expect Yingli to strike similar deal with other state-owned coal and nuclear entities in coming months. Other tier-1 solar manufacturers are expected to follow suit in a move that could accelerate the consolidation in the industry. Indeed, some observers say this is the intention of the Chinese government, which also wants to see a more unified approach to energy development in the country.
