China targets help RE firms – IHS

China’s renewables developers will this year continue to benefit from robust annual government targets, said analyst IHS.

IHS said the National Energy Administration's (NEA's) recently-published 2014 growth targets – including 18GW for wind and 10GW for PV, 60% of that distributed – “indicate that the government is pursuing its overriding policy priorities relatively aggressively, and in some cases meeting its original targets early”.

According to IHS analyst Olivia Boyd, although the targets “do not reflect any significant deviations from past policy announcements” some of the goals show an “intensification” of Beijing’s efforts.

Boyd said: “The NEA's 2014 renewable energy targets are particularly notable, in part because they reflect the fact that China has frequently built renewable energy capacity to levels in excess of original targets.

The 18GW wind target is “relatively ambitious”. Boyd said: “The government has not set a target for grid-connected wind capacity, although the Chinese wind market is beginning to recover from its lowest point in 2012, when a large share of already constructed wind farms were unable to produce electricity due to delays in grid connection.”

China added about 16.1GW of wind in 2013, according to provisional figures cited by the Global Wind Energy Council this week.

The IHS analyst concluded: “Wind and PV solar developers stand to benefit from strong government targets in 2014, although the issue of grid connection bottlenecks will remain a risk affecting profitability in the sector.”

Boyd said the bigger picture will see the Chinese government continue its efforts to drive down the share of coal in the country’s energy mix – even though the volume of coal used remains high – partly because of a desire to reduce pollution.

Beijing is also seeking to boost gas production – including by exploitation of shale gas. It has set a gas target 12% ahead of 2013’s level, Boyd said.