Essay by Eric Worrall
According to Bloomberg, China is “curtailing”, discarding an increasing percentage of their renewable energy generation, because their grid cannot cope with the excess production on days with favourable weather.
China’s Renewable Energy Fleet Is Growing Too Fast for Its Grid
Curtailment, the scourge of wind turbines and solar panels, is rearing its head in China again
6 June 2022, 13:15 GMT+10
China is wasting more and more clean energy as it adds wind turbines and solar panels faster than its grid is able to digest them.
Nearly 12% of power generated by wind turbines in Inner Mongolia this year has been wasted because the grid couldn’t take it, along with 10% of solar power in Qinghai, Economic Information Daily reported, citing government data. In sunny and windswept but sparsely populated Gansu province, the utilization rate of wind and solar power could drop below 90% this year from nearly 97% in 2021.
While China’s slowing economy and energy use amid Covid-19 lockdowns has something to do with it, the main culprit is the blistering pace of renewable energy installations. China set a record for wind capacity additions in 2020 and for solar in 2021, and is set to double that mark this year.
But unlike with mounds of coal, you can’t just save breezes and sunshine for when you need them, so all the extra capacity is generating more power than the grid can use and has to be cut off to avoid overloading it. That’s bad for utilities who aren’t getting paid for that power, and bad for the environment as the wasted clean energy could have reduced emissions from burning coal.
…Read more: https://www.bloomberg.com/news/articles/2022-06-06/china-s-renewable-energy-fleet-is-growing-too-fast-for-its-grid-l425v47z#xj4y7vzkg
Curtailment is an inevitable consequence of excess renewable capacity. Since energy storage is nowhere near capable of managing large fluctuations of renewable power, on favourable weather days excess renewable power has to be discarded.
Discarding excess renewable power is as wasteful as it sounds.
Bloomberg goes on to greensplain how energy storage and more grid capacity will fix the curtailment issue, without going into detail – which in my opinion likely means they have no idea in practical terms how to fix the problem.
Curtailment is bad because it adds to costs for end users, as if renewables weren’t already expensive enough, because assets which are curtailed are not producing income. Like a landlord who has no tenants, renewable investors still have to carry the costs when their systems are curtailed, but they don’t receive the income they would have received if their systems were allowed to sell power to the grid.
Having said that, I have no idea what Chinese investors will do next.
In a rational world Chinese investors would recognise profits were lower than expected because of curtailment, and “curtail” the flow of capital to underperforming renewable energy assets. But nothing about the current Chinese market is rational.
China is grappling with a savings and real estate crisis which is threatening to destabilise the country. The CCP’s response has been to dump over $5 trillion of hot stimulus money into the Chinese economy, in my opinion to try to re-inflate their real estate bubble. If they succeed, real estate is not the only bubble all that freshly printed hot money will inflate.