This article has been updated at the request of Bloomberg’s Jonathan Dong Luan to more accurately reflect the role of wind in China.
China’s National Energy Administration announced over the weekend that the country installed a total of 44.3 gigawatts (GW) of solar in 2018, down 16% on 2017 but still up on mid-year expectations, bringing the country’s cumulative total to 174.63 GW.
According to the National Energy Administration’s (NEA) national power statistics, released on January 18, and compared against NEA’s figures published at the same time a year ago, China installed a total of 44.3 GW worth of solar PV capacity in 2018, and 20.59 GW worth of wind capacity, an increase of 34% and 12.6% respectively.
This brings China’s cumulative solar capacity up to 174.63 GW and its total wind capacity up to 184.26 GW.
China also added 11.07 GW worth of hydropower, 37.63 GW worth of thermal power, and 8.8 GW worth of nuclear power, increases of 2.7%, 4.3%, and 6.5% respectively.
Overall, Chinese electricity consumption in 2018 increased by 8.5% to 684.49 GW-hours.
Turning back to China’s solar statistics, while 44.3 GW is a relatively impressive figure — and will likely be shown to be head and shoulders above the nearest rival when global figures are released in the coming months — it is nevertheless well down on the 52.83 GW installed in 2017. This is, of course, due to China’s mid-year policy shift, announced in May, which effectively put a hold on any new capacity installations.
However, what is interesting is that it is not as bad as many first suspected. In the wake of China’s policy shift, analysts predicted that China’s solar installations could fall by as much as 40%. GTM Research and parent company Wood Mackenzie projected that China would only install 28.8 GW, down from an original prediction of 48 GW. The Asia Europe Clean Energy (Solar) Advisory (AECEA) downgraded its original forecasts for Chinese solar additions in 2018 from in the range of 40 to 45 GW down to between 30 and 35 GW.
Over the following months, some of the fear wore off and analysts re-increased their predictions, but even so, it has been a relatively impressive year when you consider what the initial reactionary predictions were.
“The 2018 figures show that the solar industry survived the harsh winter brought by the policy shift in May, largely as distributed solar proved resilient without subsidy,” explained Jonathan Dong Luan, an analyst with Bloomberg New Energy Finance, who spoke to me via email. “The wind sector started its rebound after a 2017 low, driven by onshore growth in central and northern regions.”
“China’s coal-fired capacity rationalisation policies have taken effect,” added Frank Yu, Principal Consultant for Asia-Pacific Power and Renewables with Wood Mackenzie, who similarly spoke to me via email. “Newly added thermal power capacity installation in 2018 dropped to 44 GW, around 11 GW less than 2016. Also, we saw power demand growth gathered momentum in 2018, around 3.5 percentage points higher than in 2016 (5% year-on-year). Less thermal power capacity additions and higher power demand growth have led to reduced renewable energy curtailment. In Q3 2018 cumulative wind and solar curtailment rate was only 8% and 3% respectively. In contrast they stood at around 17% and 10.3% in 2016.
“Improvement in curtailment issues are especially credible given renewable capacity kept growing. In 2018 China added a total of 65 GW of solar and wind capacity, some 15 GW higher than 2016. Though compared with that in 2017, solar PV installation in 2018 is a bit disappointing given the policy disruption end of May, moving the pricing mechanism from feed-in tariff to competitive auction. Wind is doing better, up by around 5 GW in 2018 compared with 2017.”