Solar power prices decline
- Source: The Global Times
- [23:48 June 04 2009]
- Comments
By Li Qiaoyi
The price of solar power for domestic electricity grids from the government's latest photovoltaic (PV) electricity generation project has been set at a relatively low level, in a bid to enhance the competitiveness of PV electricity.
The country’s largest PV project in Dunhuang, Gansu Province will sell power at 1.09 yuan ($0.16) per kilowatt hour (kwh), Shi Lishan, a senior official at the National Energy Administration, said Tuesday. The price is much lower than at currently operating plants.
The National Development and Reform Commission (NDRC) initiated public bidding for the 10 megawatt PV electricity generating station project at the end of March.
Thirteen companies, including major electric power forces in the country, took part in the bidding process, offering prices between 0.69 yuan ($0.10) and 2 yuan ($0.29) per kwh.
Shi said that 1.09 yuan per kwh was the second lowest bid price. The lowest bid of 0.69 yuan per kwh failed to cover basic costs and revenue, a researcher from the Chinese Renewable Energy Society was quoted by China Business News as saying yesterday.
The lower price will be achieved by reducing the cost of raw materials such as solar cells and improving the utilization ratio of materials such as polysilicon, the main component of solar cells, to elevate the competitiveness of PV electricity generation, Cui Rongqiang, director of the Solar Energy Research Institute under the Shanghai Jiao Tong University, told the Global Times.
The project is estimated to have a total cost of 500 million yuan ($73.16 million) over a 25-year timeline and will generate 16.37 million kwh annually.
Cui said that PV electricity generation will play a vital role in the country’s electricity grid in the near future.
The mass commercial use of PV electricity generation will be rolled out within two decades, he said.
However, Meng Xiangan, secretary general of the Chinese Solar Energy Society, said that a price of 1.09 yuan per kwh would not be profitable.
Investors will benefit little from the project if such a tariff is introduced, given the high cost of infrastructure, Meng said.
NDRC approved two PV electricity generating station projects in August, in Inner Mongolia and Shanghai, with the price set at 4 yuan per kwh.
Such a dramatic decrease, down 73 percent in less than one year, is unreasonable, Meng said.
Solar generated power faces stiff competition from its traditional rival, currently coal-fired power electricity generation is much more affordable. Rates very bewteen 0.3 yuan ($0.04) and 0.4 yuan ($0.06) per kwh.