Energy Insider: China’s Wind and Solar Capacity Balloons Tenfold, Major Hydrogen-Machine Maker Expands Into Europe

13 Sep 2024

In this week’s Caixin energy wrap, we analyze China’s biggest climate and energy news on policy, industry, projects and more:

• China’s wind and solar capacity balloons tenfold

• Hydrogen-machine maker expands into Europe

• Rail agency mulls allowing EV battery transport

• Chinese solar firms sink further into the red

• Steelmakers vow to end brutal price wars

In focus: China’s wind and solar power capacity balloons tenfold

What’s new: The total capacity of China’s wind and solar power installations increased tenfold between 2013 and 2023, according to a report on the country’s energy transition.

As of the end of last year, the country had a total of 441 gigawatts (GW) of installed wind capacity and 609 GW of solar, according to the State Council report released Aug. 29.

Distributed solar power — solar panels installed for local use, typically on rooftops — has seen particularly rapid growth since 2021 due to a government-led campaign and accounted for more than 40%, or 250 GW, of China’s total solar capacity at 2023 year-end.

Why it matters: The report came after China hit its 2030 target for wind and solar power six years in advance. The National Energy Administration announced on Aug. 23 that the combined capacity of China’s wind and solar farms had reached 1,206 GW by the end of July, surpassing the 1,200 GW goal set in 2020.

The country is also building almost twice as much wind and solar power capacity than the rest of the world combined, according to a recent analysis.

Industry: Chinese solar firms bleed cash amid worsening glut

What’s new: China’s solar manufacturers have seen their bottom line severely hit by a deepening industry glut that has triggered a brutal price war.

Several companies — including Longi Green Energy Technology Co. Ltd., Tongwei Co. Ltd. and JA Solar Technology Co. Ltd. — published first-half results on Aug. 30, showing worsening profitability as the industry grapples with plunging prices.

In the first half of the year, the supply-demand mismatch in the industry worsened, driving prices below companies’ costs and causing operational difficulties across the sector, Longi said in its earnings report.

Why it matters: Overcapacity has intensified in recent years, leading to significant price drops across the main manufacturing stages.

In the first half of the year, prices for polysilicon, silicon wafers, solar cells and modules fell by 40%, 48%, 36% and 15%, respectively, pushing them below the cost of production and triggering widespread losses.

Policy: Rail authority may allow transport of EV batteries

What’s new: China’s National Railway Administration (NRA) is considering allowing lithium batteries — cells that power electric cars, scooters and other vehicles — to be transported by train within the country, Sichuan Online reported, citing Lin Chuanqian, an NRA official.

Most types of lithium batteries are listed as dangerous goods for rail transport in China since they can catch fire and explode. But the NRA is drafting rules to enable the products, used primarily in electric vehicles, to be delivered as cargo, Lin said at an industry seminar in Yibin, Sichuan on Sept. 2.

A special container for transporting the batteries has been developed and tested, Lin said.

Why it matters: Around 9.4 million tons of lithium batteries were transported by road within China last year, accounting for 90% of all lithium batteries delivered domestically, Wu Jinzhong, a professor at the Chongqing Jiaotong University, said at the seminar.

But the country will face a shortage of transport capacity for the goods over the next few years due to growing demand, Wu said, according to Jiemian News. Trains offer a cost-effective alternative for shipping large volumes of batteries, the news outlet reported.

Company: Major hydrogen-machine maker to build plants in Spain

What’s new: Beijing-based hydrogen firm Hygreen Energy has announced plan to build new plants in Spain as it looks to increase its presence in Europe.

Hygreen is the overseas name of Beijing SinoHy Energy Co. Ltd., which has 17 years of experience making electrolyzers — devices that use clean energy to produce “green hydrogen.”

According to a Sept. 3 news release, the company intends to build an electrolyzer factory in Malaga to make the equipment for the European market. It also plans to work with partners to build “large-scale” plants for producing green hydrogen in Andalucia and set up a research program for electrolyzer technologies.

Why it matters: Spain — which is spending 1.2 billion euros ($1.3 billion) on spurring its green hydrogen industry — has become a popular overseas investment destination for Chinese renewable firms.

Prior to Hygreen’s announcement, Longi Hydrogen and Trina Solar had inked agreements with partners to produce green hydrogen and develop related technologies in Spain.

Hygreen estimates its new projects will attract over 2 billion euros in capital and resources.

Industry: Embattled steelmakers vow to end cut-throat price wars

What’s new: China’s largest steelmakers have vowed to be more self-disciplined in cutting down production and stocks so as to put an end to the industry’s fierce competition and price wars, China Iron and Steel Association said in a WeChat post on Sept.1.

At an Aug. 30 meeting in Beijing, 18 major steelmaking firms — including China Baowu Steel Group Corp. Ltd. and Ansteel Group Co. Ltd — promised to follow government-set production limits. They also called for a “concrete mechanism” to help the industry shed capacity and to restructure.

Weakening steel demand and a subsequent drop in prices pushed China’s top mainland-listed steelmakers to report tumbling profits or expanding losses in the first half.

The steel industry is the largest carbon emitter out of the country’s manufacturing industries, contributing to around 15% of total emissions, reported the Economic Daily.

Why it matters: The news came as Canada decided to hike import tariffs on China-made steel to 25%, a move that piles pressure on Chinese steelmakers which are already struggling due to domestic competition.

Last month, the Ministry of Industry and Information Technology suspended approving new steel or iron plants in a sign that it plans to further curb the industry’s severe overcapacity.