Oct 2018
Liutong Zhang (lzhang@waterrockenergy.com)
We have recently prepared a high-level slide deck related to the opportunities and challenges of investing in China solar and wind sector.
Our key findings are
Wind and solar curtailment rates have been dropping in the past 1.5 years, and the pace of the curtailment reduction will likely further pick up in some inland provinces in the coming years.
Low wind and solar capacity built in highly curtailed regions while demand growth is strong
Commissioning of UHV DC and AC lines increase power export from curtailed provinces
More proactive policies are implemented to increase grid flexibility and increase incentive to reduce curtailment
At regional level, Northwest provinces such as Gansu and Xinjiang will have more challenging tasks for curtailment reduction.
The RE deficit problem is likely to continue, at least in the near term.
There will be likely more solar and wind asset sales in the coming months/years, and some assets should have good values with the reduction of curtailment rates.
Distributed solar with long-term corporate PPAs could offer good investment opportunities.
The Chinese power market is slowly de-regulating, so this may create winners and losers and present new opportunities for investors.
For those that are interested to check out the details of the slide deck, you can download it by going to "publication" then "country insight" and download the "Opportunities and challenges of investing in China wind and solar sector" pdf. Do feel free to email me if you have any issue or would like to discuss the slide deck.
Oct 2018