China power market 35% oversupplied in 2016

CHINA: In 2016, the Chinese power market was supplied with 35% more energy than it needed, leading to high curtailment rates, despite more generation still being installed.

China's wind capacity faces high level of curtailment due to oversupply (pic: Zhu Shiliang)
China's wind capacity faces high level of curtailment due to oversupply (pic: Zhu Shiliang)

According to new research from Bloomberg New Energy Finance (BNEF) wind generators averaged 17% curtailment rates in 2016, with solar suffering from 10% rates as renewables battle with coal for dispatch.

BNEF found 56.2TWh of wind and solar generation was curtailed in 2016.

However, BNEF believes the problem of China's high curtailment rates could be about to fall with the slow down of new generation build and long transmission lines to transport the oversupply of power, typically in the northern territories, to areas where it is needed most.

"We expect curtailment to alleviate in the severely curtailed northern regions such as Xinjiang, Gansu and Inner Mongolia," BNEF said.

BNEF added the Chinese electricity market could also improve to aid cutting curtailment rates: "Besides technical constraints, China's pre-set allocation dispatch mechanism is one of the most critical causes of renewable curtailment. The liberalisation of power market will significantly help curtailment alleviation if spot market and ancillary market are successfully established.

However, despite the high levels of curtailment, caused by oversupply, China has 50GW of wind and solar projects set to be built in high-curtailment regions.

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