China and the US Show a Contrasting Picture in Terms of Renewable Energy Capacity Addition

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China witnessed a decline in renewable energy capacity addition in 2019 as 44.4 gigawatts (GW) of solar power capacity was added in 2018 compared to an estimated 30.1GW in 2019. which is significantly lower. This is despite the government subsidies for centralized solar projects to the extent of Yuan 1.7bn ($247.6m) involving a total installed capacity of 22.8GW as against no subsidies in 2018. according to GlobalData. a leading data and analytics company.

Harminder Singh. Director of Power at GlobalData comments: “The capacity addition during the first three quarters of 2019 was low due to uncertainty about the specifics of the subsidy scheme. however. it recovered to some extent in the fourth quarter once the policy details were confirmed. In the first three quarters of 2019. the capacity addition was 16GW. The implementation of comprehensive bidding policies and lack of understanding of the principles of bidding were among the factors responsible for the low capacity addition. Other issues include insufficient preliminary preparation of projects and many projects lying in early stages of development.“

The US. on the other hand. is witnessing a significant increase in renewable energy capacity addition. The solar power capacity addition in the country is estimated at 12.4GW in 2019 as compared to 10.6GW in 2018. a growth of roughly 16%. Despite tariffs. photovoltaics (PV) modules and cells are being imported at historically high levels. with 14 GW of total imports of PV cells and modules being available to the US market as of November 2019.

Singh continues: “The large wind capacity addition in the US in 2019. which is estimated at 12.2GW as against 7.4GW in 2018. is driven by the expiration of the country’s production tax credit (PTC) at the end of 2020. There is a huge rush of projects to meet the deadline. With declining prices. wind and solar with affordable energy storage are rapidly becoming a viable option to replace existing fossil fuel plants which are set to retire.“