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China to Increase Short-Distance Solar-Power Distribution

China, Asia’s largest solar market, plans to add more generation projects in regions where the electricity can be distributed to customers who live nearby.

The government intends to expand the total capacity of such projects to 20 gigawatts by 2015, Wu Xinxiong, head of the National Energy Administration, said in a speech posted on the agency’s website. That compares with just 2 gigawatts at the end of last year, according to data compiled by Bloomberg.

By increasing short-distance distribution, China can avoid overloading grids that have struggled to absorb the recent growth in solar and wind-energy generation, which are both intermittent sources of power that peak with favorable weather.

Next year China will add 6 gigawatts of distributed solar power, or power from plants that are dispersed rather than from a central hub, Wu said. More than 80 percent of that capacity will be in the regions around Shanghai, Guangzhou and Beijing.

Those areas have higher electricity demand than other cities, Wang Minnan, a Beijing-based analyst at Bloomberg New Energy Finance, said today by telephone. “There’s no need to transmit power across long distance,” she said.

China has a target to reach 35 gigawatts of total solar capacity by 2015, according to Wu’s speech posted online yesterday. The country introduced a subsidy of 0.42 yuan (7 cents) a kilowatt-hour in August for projects of less than 6 megawatts connected to grids of as much as 10 kilovolts.

China Development Bank Corp. will set up local financing and investment bodies to advance the planned plants, Wu said.

To contact Bloomberg News staff for this story: Feifei Shen in Beijing at fshen11@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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