Energy Insider: China’s Wind and Solar Capacity Balloons Tenfold, Major Hydrogen-Machine Maker Expands Into Europe

In this week’s Caixin energy wrap, several key developments in China’s energy and industrial sectors are highlighted, including significant expansions in wind and solar capacity, challenging market conditions for solar firms, regulatory changes for the transportation of EV batteries, strategic moves by a hydrogen-machine maker into Europe, and pledges by steelmakers to end price wars [para. 1].

**China's Wind and Solar Power Expansion**:

Between 2013 and 2023, China’s wind and solar power installations grew tenfold, reaching a total of 441 GW of wind capacity and 609 GW of solar capacity by the end of last year. Notably, distributed solar power, primarily rooftop installations, accounted for over 40%, or 250 GW, of the total solar capacity by the end of 2023. The country's wind and solar power capacity hit its 2030 target of 1,200 GW six years ahead of schedule, as the combined capacity reached 1,206 GW by the end of July this year. China is constructing nearly double the amount of wind and solar power capacity compared to the rest of the world combined [para. 5][para. 7].

**Challenges for Chinese Solar Firms**:

Chinese solar manufacturers, including Longi Green Energy Technology Co. Ltd., Tongwei Co. Ltd., and JA Solar Technology Co. Ltd., are facing severe financial difficulties due to an industry glut and resulting price wars. In the first half of the year, the supply-demand imbalance led to drastic price decreases: polysilicon fell by 40%, silicon wafers by 48%, solar cells by 36%, and modules by 15%. These price declines pushed costs below production levels, leading to widespread losses and operational challenges for the companies [para. 11][para. 12].

**Rail Transport for EV Batteries**:

The National Railway Administration (NRA) of China is considering allowing the transport of lithium batteries used in electric vehicles by rail. Currently classified as dangerous goods due to fire and explosion risks, a new set of rules is being drafted to permit their rail transport. Special containers for this purpose have been developed and tested. The objective is to alleviate the anticipated transport capacity shortage for lithium batteries, which predominantly rely on road transport. Rail transport is seen as a cost-effective alternative for shipping large volumes of these batteries [para. 16][para. 17].

**Hydrogen-Machine Maker's Expansion into Europe**:

Beijing SinoHy Energy Co. Ltd., operating overseas as Hygreen Energy, announced plans to build new plants in Spain to cater to the European market. The company, known for its expertise in making electrolyzers for producing "green hydrogen," intends to construct an electrolyzer factory in Malaga and collaborate with partners to establish large-scale green hydrogen production facilities in Andalucia. Spain’s significant investment in its green hydrogen industry, amounting to 1.2 billion euros ($1.3 billion), has made it an attractive destination for Chinese renewable firms. Hygreen's new projects are expected to attract over 2 billion euros in capital and resources [para. 20][para. 22].

**Steelmakers Vow to End Price Wars**:

China’s largest steelmakers, including China Baowu Steel Group Corp. Ltd. and Ansteel Group Co. Ltd., have committed to reducing production and inventories to mitigate the harsh price wars within the industry. This pledge came during an Aug. 30 meeting in Beijing, where 18 major steelmaking firms agreed to adhere to government-set production limits and called for mechanisms to shed capacity and restructure the industry. The steel sector, responsible for around 15% of China’s total emissions, is facing added pressure from domestic competition and recent hikes in import tariffs by Canada. As a mitigating measure, the Ministry of Industry and Information Technology has suspended the approval of new steel or iron plants to curb overcapacity [para. 26][para. 28][para. 31][para. 34].