A recent Flash Note from MAKE Consulting examines the issues surrounding China’s wind curtailment and the impact this would have on project development, especially when the country’s FIT levels are being continuously reduced at the same time. MAKE discusses the impact on IPPs and project profitability of curtailment and consecutive FIT reductions. The note also analyses implications for China’s target of reaching grid parity by 2020 as well as market dynamics going forward.
- China announced onshore wind FIT reductions in December 2015 for the second time in two years, demonstrating the government’s strong intentions to push onshore wind towards grid parity by 2020
- China’s curtailment rate to increase from 15% on average in 2015 to more than 20% in 2016 and will not improve until 2018
- Despite substantial profitability concerns and further curtailment, strong growth of more than 20 GW per year is expected to continue through to 2020.
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