China's renewable power waste falls, but warns of challenges

SHANGHAI (Reuters) - Levels of wasted power in China’s renewable sector fell in the first half of this year, but securing grid access for many new clean energy projects remains a challenge for the industry, an energy bureau official said.

China’s renewable energy capacity has soared thanks to generous subsidies and ambitious targets, but the country does not have enough transmission capacity to deliver all the new power to customers, a problem known as curtailment.

To resolve the issue, the government has been trying to adjust the timing of construction and has set up an early warning system forcing regions suffering from excess capacity growth to slow down the pace of new approvals.

“From this year, the situation has improved,” said Liang Zhipeng, vice-director of the renewable energy office of the National Energy Administration during a media briefing on Monday. “But absorbing renewable power remains a long term problem.”

China’s total renewable energy capacity reached 680 gigawatts by the end of June, up 13 percent on the year, accounting for nearly 40 of total energy capacity.

Non-fossil fuel power - renewables and nuclear - accounted for 66.1 percent of China’s new installed energy capacity in the first half, up 5.4 percentage points compared to a year earlier.

Wind curtailment rates stood at 8.7 percent, down 5 percentage points on the year, while solar curtailment also fell 3.2 percentage points to 3.6 percent during the first half.

Liang said new demand had created more favorable conditions for the renewable sector, but it still faced big challenges.

“Over the long term, it is very important to establish an effective mechanism to absorb and utilize renewable energy,” he said.

Amid overcapacity fears, China has already taken action to restrict the number of new solar power generation projects this year after record growth in 2017.

The state planning agency said at the end of June that it would cap new capacity at 30 GW in 2018, compared to 53 GW last year.

Reporting by David Stanway; editing by Richard Pullin