A group comprising Jiangsu Baishide Solar Energy High-tech Company, China Guangdong Nuclear Energy Development Co. Ltd and Belgium's Enfinity Company successfully bid for the Dunhuang photovoltaic (PV) project at 1.09 yuan per kWh recently. Fang Peng, president of Jiangsu Baishide Company, disclosed that the internal rate of return of the project can reach eight percent.
The Dunhuang PV project is China's first national large grid-connected PV project and of landmark significance.
Fang said that aside from the 0.69 yuan per kWh proposed price, the Baishide bidding group ranked second with their proposed price of 1.09 yuan per kWh, only 0.07 yuan per kWh less than that of the third ranked bidder. 1.09 yuan per kWh is the lowest acceptable price in the current industry.
Fang believes that electricity prices should be adjusted to suit different meteorological conditions in different areas. A power plant able to turn a profit in Dunhang may suffer losses in Jiangsu Province as Dunhuang has twice as many hours of sunlight as Jiangsu.
Fang believes that policies play a decisive role in the development of China's PV industry. He said, "Investment and subsidy-related policies must be approved by national and provincial development and reform commissions, therefore the subsidy amount, and final development scale and speed of power generation projects are already essentially limited. Few enterprises are willing to sustain losses in business. As a result, the growth speed of the PV industry is determined by subsidy amounts, and the government is able to completely control the development of the industry."
By People's Daily Online