China is ‘overbuilding renewables capacity’ despite high curtailment rates

China is building over 50 GW of wind and solar power capacity in areas of the country that already have a high risk of curtailment, according to a new resource – the China Renewable Curtailment and Coal Stranded Assets Risk Map created by Bloomberg New Energy Finance (BNEF). The map, produced in partnership with the ClimateWorks Foundation, shows the regions in China where curtailment rates (where generators are shut down when not needed, or due to a lack of transmission infrastructure) are highest, as well as where coal-fired power stations are most likely to become stranded assets.

It says that China could face a $237bn hit from coal assets that are at risk – and that there is not a single province in China where new coal generation capacity is needed. The map displays risk levels for all Chinese provinces, following China overinvesting in new generation capacity over the last ten years due to rapid power demand growth, subsidies and regional industrial competition. According to BNEF at the end of 2016 China’s national power market was oversupplied by 35%.

There is increasing competition for dispatch between China’s power generators, and renewable generators in China face the worst curtailment rates in the world, according to BNEF, with the national average curtailment ratio in 2016 at 17% for wind and 10% for solar – with 56 TWh of generation curtailed. BNEF says that over the next five years the curtailment rates will decline nationally, but could grow in southern Chinese provinces. More long-distance transmission lines and power market reforms will be needed to reduce this curtailment risk, it says.