With the rapid development of new energy installed capacity and the continuous decline in utilization rate, new energy, which has just gotten rid of subsidies and is self-reliant, is facing the severe challenge of declining yields.
On May 23, China's National Energy Administration released statistics on the country's power industry from January to April. As of the end of April, the country's cumulative installed power generation capacity was about 3.01 billion kilowatts, of which photovoltaic power generation was about 670 million kilowatts, a year-on-year increase of 52.4%; Wind power was about 460 million kilowatts, a year-on-year increase of 20.6%.
However, the "red line" of new energy consumption continues to decrease.
In 2018, the National Development and Reform Commission and the Energy Administration issued the "Clean Energy Consumption Action Plan (2018-2020)", which determined that the photovoltaic utilization rate should be maintained at more than 95%. In the latest "2024-2025 Energy Conservation and Carbon Reduction Action Plan" issued by the State Council, it is proposed to relax the utilization rate of new energy to 90% in areas with better resources.
The reduction in utilization requirements means that more new energy capacity can be installed (the previous policy required that new installations be suspended in areas that cross the red line), and it also indicates that the country's tolerance for curtailment of wind and solar power is being relaxed, in other words, more wind and solar power will be abandoned.
The relaxation of the consumption red line and the reduction of guaranteed purchases will bring about a decrease in the investment income of wind power and photovoltaic projects. This situation is likely to continue and will fall to a lower level in the future, which is not good news for the development of the new energy industry.
The decline in the rate of return of new energy projects is closely related to the evolution of the acquisition methods of new energy power.
In the past ten years or so, as new energy has grown from non-existent and from small to large, new energy electricity prices have experienced successively from "full power" guaranteed quantity and price purchases, to "guaranteed hours" guaranteed quantity and price purchases, and then to "guaranteed hours" guaranteed quantity and price purchases. "Guaranteed hours" are gradually reduced in three stages.
In other words, the current new energy power generation has gradually moved from the historical full guaranteed consumption to the "double-track parallel" of guaranteed consumption within "guaranteed hours" and market-oriented consumption. As the proportion of new energy installed capacity continues to increase, market-oriented consumption accounts for an increasing proportion.
In the guaranteed purchase, the power grid stably pays a kWh electricity price of more than 30 cents for new energy grid-connected electricity with reference to the coal and electricity benchmark price. Today, this "golden age" is gone forever, and many provinces directly implement "simple and crude" discounts on photovoltaic time-of-use electricity prices.
For example, Gansu Province's 2024 provincial mid- and long-term electricity trading plan clearly states that the transaction price of photovoltaic power stations during the time period of 9:00-17:00 will not exceed 0.5 times the coal benchmark price. This means that the online transaction price of Gansu photovoltaic power stations during the above-mentioned time period will not exceed 0.1539 yuan/kilowatt-hour, which is the whole valley price.
There are also hidden "pits" here. When photovoltaic power stations participate in mid- to long-term transactions in the power market, they must bring out the power curve. In other words, photovoltaic power stations have signed a contract to participate in mid- and long-term market transactions. If they cannot generate that much power during certain periods, they can only purchase it from the spot market. To have enough electricity to fulfil the contract, it is often necessary to purchase spot electricity worth 1 yuan or even 1.5 yuan to fulfil the contract. The cost of fulfilling the contract is much higher than the transaction price. Isn't this a "big loss"?
The price of electricity when participating in medium and long-term transactions is not ideal, but if it participates in spot transactions, the price of new energy electricity is even more "cabbage price" or even negative. Huaxia Energy Network has noticed that the current price of photovoltaic electricity in some provinces with large wind and solar installed capacity in the west continues to fall, and in some places it has even fallen to the lower limit of the spot market price - the floor price of 0.04 yuan/kWh.
Such low electricity prices are not only difficult for centralized photovoltaic projects, but also for distributed ones. In 2023, the Shandong power spot market frequently experienced negative electricity price transactions during the May Day holiday. Negative electricity prices occurred for a total of 46 hours in five days, including 22 consecutive hours from the evening of May 1 to May 2. Negative electricity prices range from -0.085 yuan/kWh to -0.032 yuan/kWh.
Since most household photovoltaics adopt the "full grid" model, under the situation of increasingly low or even negative electricity prices, power generation income is destined to be poor. Many distributed photovoltaic owners will face the embarrassing situation of losing money in power generation.
All in all, whether it is the north-western provinces with many centralized power stations or the central and eastern provinces with a high proportion of distributed power stations, wind and solar new energy generally encounter difficulties in getting online and entering the market, as well as large market price fluctuations, fierce competition in project investment, and low profitability. Tests such as decline.
While new energy electricity prices continue to fall, the power generation capacity of new energy installed capacity is also experiencing a sharp decline.
Official data shows that from January to April, the cumulative average utilization of power generation equipment nationwide was 1,097 hours, 49 hours less than the same period last year. Among them, there were 789 hours of wind power, 77 hours less than the same period last year; 373 hours of solar power generation, 42 hours less than the same period last year.
The decrease in the overall "utilization hours" reflects the poor living conditions of new energy projects.
In Xinjiang, Qinghai, Gansu, Ningxia, Shaanxi, Inner Mongolia and other places, large-scale wind and photovoltaic power stations are being implemented in large numbers, but many new energy stations are experiencing rare power rationing. For example, in the past year, Qinghai Province, which has 20 million kilowatts of photovoltaic power and 10 million kilowatts of wind power, was required to stop power generation for three to four hours during the noon peak period.
Distributed new energy resources in the central and eastern regions are also unable to escape the suffering of power cuts. Taking Henan, a major distributed photovoltaic province, as an example, distributed photovoltaic users in Xin'an County were notified that power generation will be suspended from 9:00 to 13:00, and power will be limited for 4 hours; photovoltaic users in Luohe area will stop power generation from 10:00-16:00, and power will be limited for 6 hours. hours; photovoltaic users in Shangqiu Liuhe Town will stop power generation from 9:00 to 16:00, and power will be limited for 7 hours.
From the northwest to the central and eastern parts of the country, large-scale power outages and power cuts have a devastating impact on new energy power generation that cannot be ignored. So, what are the reasons behind the current difficulty in consuming new energy and the increasing rate of wind and light abandonment? This is closely related to the latest operation of market-oriented consumption of new energy.
For example, in western Inner Mongolia, the "guaranteed hours" for guaranteed consumption of new energy have dropped to about 300 hours. In addition, the more than 1,000 hours of utilization need to be consumed through market transactions. However, market-oriented consumption does not guarantee that transactions can be completed in these more than 1,000 hours.
On January 18, 2022, the National Development and Reform Commission and the National Energy Administration issued the "Guiding Opinions on Accelerating the Construction of a National Unified Electricity Market System" (Fa Gai Ti Gai [2022] No. 118), which clearly "encourages new energy quotations to participate in spot In the market, unsuccessful bids will not be included in the assessment of wind and photovoltaic power abandonment."
In other words, for the market-based electricity part, if the transaction is completed, it will be included in the assessment of wind power abandonment and photovoltaic power abandonment; the part of the electricity that participates in market-based transactions but has not been completed is a voluntary transaction and the transaction cannot be completed. This part will not be counted in the assessment of wind power abandonment and photovoltaic power abandonment.
If the bid is not successful, one situation may be that the electricity price is too low and the new energy station cannot accept it and automatically abandons the transaction. Of course, this kind of power abandonment cannot be calculated into the assessment of wind and light power abandonment.
In fact, new energy power stations are willing to participate in market-based transactions. Even if the electricity price is low or even close to zero, completing the transaction is better than abandoning wind and light and wasting it in vain. So, a large part of the so-called "unsuccessful bidding for quotations" is actually the passive abandonment of wind and solar power caused by insufficient capacity of the power system.
The number of utilization hours is decreasing, power generation has dropped sharply, and the profitability of wind and solar projects is undoubtedly going down.
While new energy electricity prices continue to fall, the power generation capacity of new energy installed capacity is also experiencing a sharp decline.
Official data shows that from January to April, the cumulative average utilization of power generation equipment nationwide was 1,097 hours, 49 hours less than the same period last year. Among them, there were 789 hours of wind power, 77 hours less than the same period last year; 373 hours of solar power generation, 42 hours less than the same period last year.
The decrease in the overall "utilization hours" reflects the poor living conditions of new energy projects.
In Xinjiang, Qinghai, Gansu, Ningxia, Shaanxi, Inner Mongolia and other places, large-scale wind and photovoltaic power stations are being implemented in large numbers, but many new energy stations are experiencing rare power rationing. For example, in the past year, Qinghai Province, which has 20 million kilowatts of photovoltaic power and 10 million kilowatts of wind power, was required to stop power generation for three to four hours during the noon peak period.
Distributed new energy resources in the central and eastern regions are also unable to escape the suffering of power cuts. Taking Henan, a major distributed photovoltaic province, as an example, distributed photovoltaic users in Xin'an County were notified that power generation will be suspended from 9:00 to 13:00, and power will be limited for 4 hours; photovoltaic users in Luohe area will stop power generation from 10:00-16:00, and power will be limited for 6 hours. hours; photovoltaic users in Shangqiu Liuhe Town will stop power generation from 9:00 to 16:00, and power will be limited for 7 hours.
From the northwest to the central and eastern parts of the country, large-scale power outages and power cuts have a devastating impact on new energy power generation that cannot be ignored. So, what are the reasons behind the current difficulty in consuming new energy and the increasing rate of wind and light abandonment? This is closely related to the latest operation of market-oriented consumption of new energy.
For example, in western Inner Mongolia, the "guaranteed hours" for guaranteed consumption of new energy have dropped to about 300 hours. In addition, the more than 1,000 hours of utilization need to be consumed through market transactions. However, market-oriented consumption does not guarantee that transactions can be completed in these more than 1,000 hours.
On January 18, 2022, the National Development and Reform Commission and the National Energy Administration issued the "Guiding Opinions on Accelerating the Construction of a National Unified Electricity Market System" (Fa Gai Ti Gai [2022] No. 118), which clearly "encourages new energy quotations to participate in spot In the market, unsuccessful bids will not be included in the assessment of wind and photovoltaic power abandonment."
In other words, for the market-based electricity part, if the transaction is completed, it will be included in the assessment of wind power abandonment and photovoltaic power abandonment; the part of the electricity that participates in market-based transactions but has not been completed is a voluntary transaction and the transaction cannot be completed. This part will not be counted in the assessment of wind power abandonment and photovoltaic power abandonment.
If the bid is not successful, one situation may be that the electricity price is too low and the new energy station cannot accept it and automatically abandons the transaction. Of course, this kind of power abandonment cannot be calculated into the assessment of wind and light power abandonment.
In fact, new energy power stations are willing to participate in market-based transactions. Even if the electricity price is low or even close to zero, completing the transaction is better than abandoning wind and light and wasting it in vain. So, a large part of the so-called "unsuccessful bidding for quotations" is actually the passive abandonment of wind and solar power caused by insufficient capacity of the power system.
The number of utilization hours is decreasing, power generation has dropped sharply, and the profitability of wind and solar projects is undoubtedly going down.
Electricity prices have fallen sharply, power generation and utilization hours have also fallen, and new energy projects will lose money will become the norm.
Officials require centralized power stations to have a 6 percentage point of return, and residential PV developers have been promising to return on investment in 5-8 years, and the yield in these promises may become a "blank check" in the future.
Fundamentally speaking, the problem lies in the pace of development of new energy - the installed capacity growth rate is too fast. In 2023 alone, China will add nearly 300 million kilowatts of new energy capacity.
Behind this is a huge investment, taking the large wind and solar base and the "Shage Huang" base as an example, the large wind and solar base starts at 1 million kilowatts, and the investment in a single project is about 4 billion to 5 billion yuan; The "Shagehuang" base starts at 10 million kilowatts, and the investment in a single project is about 400-50 billion yuan; UHV channel, an investment of about 20 billion yuan.
A large amount of money has been poured in, but the entire power system has not kept up with the capacity building for the consumption of new energy. The consumption of green electricity involves the power system composed of the power grid, load and energy storage, and the improvement of consumption capacity is a slow process, not a day or two can be effectively improved.
On the other hand, there is also a serious problem of "incentive misalignment" in the market.
In terms of power supply construction, both power generation groups and local governments are extremely keen on the development of new energy projects because of the considerable dividends from new energy investment.
Taking Xinjiang as an example, in the first half of 2023 alone, its investment in new energy power sources and power grids will reach 36.4 billion yuan, directly driving local economic growth by about 1.85 percentage points and providing about 2,700 new jobs. In 2023, Xinjiang's GDP will achieve a high growth rate of 6.8%, which is evident in the contribution of new energy investment to economic growth.
The central power generation enterprises are doing their best to get on new energy as quickly as possible: the layout of large wind and solar bases, with the State Power Investment Corporation and Huaneng exceeding 20 million kilowatts respectively; The Three Gorges Corporation is close to 20 million kilowatts; Datang Group exceeds 10 million kilowatts; CGN and Jingneng Group both exceeded 5 million kilowatts.
However, due to the lack of systematic and effective incentives, the power system's absorption capacity has not been quickly kept up, and the hardware construction of new energy development and the software construction of system consumption are not coordinated.
According to the current speed of development, China can easily achieve the target of 1.2 billion kilowatts of new energy installed capacity in advance, in the next few years the construction of power supply will no longer be the most urgent thing, it is time to transfer more resources, energy and investment, to the improvement of new energy consumption capacity, in the power grid of software and hardware construction, vigorously promote the new power reform to make a fuss.
At the moment when the volume and price of new energy are falling, if the capacity of new energy consumption is not strengthened as soon as possible, the yield of new energy projects can only collapse to the end, and it is a matter of time before the annual new installed capacity of new energy turns down, which will ultimately affect the goal of China's energy transformation. It is urgent to solve the problem of stuck points in the entire power system.
Source: https://mp.weixin.qq.com/s/UEtMEPlcvnk2TIz4w5vwOA