Source: China News Service

Reporter: Zhu Huan

Currently, China's photovoltaic industry is at a critical stage of transitioning from homogeneous scale expansion to high-quality development. Preventing "involution-style" cutthroat competition has been mentioned repeatedly. At this year's Two Sessions, NPC Deputy, Vice Chairman of the All-China Federation of Industry and Commerce, and Chairman of the Board of Tongwei Group, Liu Hanyuan, put forward relevant proposals on optimizing the new energy electricity pricing mechanism and the timely disbursement of renewable energy subsidies.

Liu Hanyuan stated that, in essence, the end users of the PV manufacturing side are terminal power stations. Only by continuously improving the electricity market mechanism and enabling power stations to obtain relatively stable return expectations can installed capacity demand be effectively stimulated, which in turn transmits upward to support the entire industry in achieving sustained high-quality development.

Judging from recent mechanism electricity price bidding results, in provinces rich in wind and solar resources but facing significant grid absorption pressure, the clearing prices of new energy participating in market-based transactions are generally lower than the coal-fired benchmark electricity price, with severe fluctuations. The continued decline in electricity prices, combined with factors such as ancillary service fees and output deviation penalties, exposes new energy power generation enterprises to price volatility and multiple risks, eroding profits of existing projects and undermining investment confidence in new projects.

Liu Hanyuan pointed out that by comparing coal-fired power with photovoltaic power generation, two prominent problems in the current electricity pricing mechanism can be identified: the cost structure is not reasonably reflected, and the environmental value is not fully reflected. In addition, subsidy arrears remain one of the key factors constraining the sustained and healthy development of China's photovoltaic industry.

In response to the above situation, Liu Hanyuan suggested that during the market transition period, the revenue guarantee mechanism should be continuously optimized, and the upper and lower limits of mechanism electricity volume bidding should be raised. For example, a benchmark value encompassing reasonable costs and green value should be set for new energy mechanism electricity volume, to prevent disorderly electricity price declines from breaching the industry chain's safety margin. A comprehensive revenue mechanism including capacity electricity prices, green certificate trading, and long-term power purchase agreements should be improved to hedge against the risks of sharp electricity price fluctuations and stabilize market participants' return expectations.

Liu Hanyuan also proposed extending the renewable energy consumption responsibility weight assessment to more energy-consuming industries. The scope of renewable energy consumption responsibility subjects should be gradually expanded to include large industrial and commercial users, with a strong compliance supervision mechanism established to underpin green electricity consumption demand.