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China encourages decentralized PV generation

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Often masked by the growth of large, even utility-scale renewable energy projects, could it be that the parallel growth of smaller decentralized energy generation, in all its forms, is more important to electricity system transition?

After all, it’s the use of local, distributed generation plant, together with equally local demand-side activity, electricity storage and smarter grid controls that provide the flexibility for true post-transition systems. It’s impossible to quantify, but remote, utility-scale renewable generators may be less influential than the larger numbers of local generators. And there does seem to be a swing to more distributed renewables projects being developed in the last couple of years.

For example, distributed PV projects are also the fastest growing renewables sector in India, according to Bloomberg New Energy Finance (BNEF) – and supply cheaper electricity than grid power.

The global Regulatory Assistance Project (RAP) has taken a particular interest in decentralized solar PV generation in the most important country in the world – China, noting that local policymakers are currently pushing decentralized PV as part of wider electricity sector reform to separate retail and distribution activities and to benefit industrial and commercial sector consumers. According to RAP, the Chinese authorities are keen to create new business models for distributed solar, through investment in projects connected on local distribution networks. They are calling for the creation of new platforms to facilitate electricity trading between distributed generators and consumers.

Distributed PV is already very big business in China, which is estimated to have added 54 GW of solar generating capacity in 2017, perhaps a third of this defined as distributed. Although, given that numbers tend to be all-round bigger in China, ‘distributed generation’ allows rather larger projects than the typically 1 MW PV projects found on many shopping malls in the west.

RAP suggests that these moves are likely to lead to new opportunities for decentralized generators. Solar developers will benefit from being liable to pay just distribution network fees, as opposed to both distribution and transmission charges, as well as collecting solar subsidies.

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