MOST: No surplus capacity in new energy
0 Comments
In a recent report, China's Ministry of Science and Technology (MOST) raised its doubts about the surplus capacity of China's new energy industry, saying the argument is not fair.
On August 26, the Ministry of Industry and Information Technology (MIIT) and the National Development and Reform Commission (NDRC) jointly released "A Report about China's Industrial Economic Operation in Summer 2009." The report notes that a lot of construction projects overlap and have not been approved by the government, therefore causing new energy industries such as solar and wind power to exceed production capacity needs.
Take production of polycrystalline silicon for example. Polycrystalline silicon production is the basis of the photovoltaic industry. As of the first half of 2009, China had set up more than 50 polycrystalline silicon companies worth 130 billion yuan (about US$19.04 billion) with a total output amounting to 230,000 tons. Some experts believe that such a production capacity is more than twice the global commands.
Researchers from MOST took about one month to assess the situation. They found that such high rates of capacity are not actual outputs, but projected outputs.
As for the polycrystalline silicon production, MOST points out that only 10 of the 50-plus companies can produce polycrystalline silicon and their actual outputs are merely 15,000 tons.
In addition, experts from MOST claim that it is the new energy enterprises that support the argument about surplus capacity, for fear of a large number of newcomers competing and reducing their profits.
MOST's report also says that if such a surplus capacity exists, it is just a temporary problem in the new energy industry and it will solve itself as the industry matures. In the beginning phase, government intervention should not be taken into consideration.
As for the photovoltaic industry, MOST believes that China cannot keep planning abreast of the industry's developing trend. Non-governmental forces are still playing a major role in the industry. In fact, a lag in power grid construction and government subsidies lead to the slow development in the new energy industry.
Comments