China this week released policy updates for the energy sector that would allow wind and solar generators in “resource-rich areas” to curtail twice what they can curtail now in order to keep the low-carbon energy ball rolling. Curtailment is a term used for those periods during the day when wind or solar electricity output is so high that it cannot be fed into the grid to avoid overloading it. Instead, installations are switched off, essentially wasting the electricity produced.
On the other hand, according to some analysts, the changes could also lower the profits of wind and solar generators further. There is already significant strain on bottom lines because of the intensive competition in the sector and the new rule will only intensify this further.