By staff reporter Wang Zhiyong
Yingli Green Energy (NYSE:YGE), and SDIC Huajing Power have submitted a joint bid to build a 10-MW solar power plant in Dunhuang in northwest China to supply the national grid at an unprecedented low price, RMB0.69/kwh (US$0.1/kwh).
When China.org.cn staff reporter visited the Yingli plant in Baoding City, some 120 km south of Beijing on March 24, the company told that they were aiming to reduce the cost of solar power to RMB1/kwh by 2012.
|A 9.8 MWp grid-connected PV system at Navarre province, Spain built by Yingli Green in November 2006.|
But the following day, the news of the RMB0.69/kwh bid for the Dunhuang project came out.
"Right now, Yingli can produce solar electricity for RMB1.1 to 1.3/kwh, depending on weather conditions." Yingli spokesman Li Wei told China.org.cn yesterday. "We can achieve this for example in Tibet, which has many hours of sunlight."
"Costs are influenced by many factors, for example preferential loan rates and preferential tax policies," Li said. "We are confident we will win the bidding."
Li refused to confirm the RMB0.69/kwh bid price. But a deputy general manager of Yingli who was involved in the bid did not deny it.
"Of the 18 consortia bidding, the highest bid price was RMB1.92/kwh, and the average was around RMB1.3-1.4/kwh. There was only one bid below one yuan – the one from Yingli and SDIC Huajing," a company executive who took part in the bidding told 21st Century Business Herald. "This was very unexpected, and far below the current cost of production," he said.
In June 2008, Yingli Green won a 62-megawatt project in Portugal, the largest solar energy project in the world so far.
The 10 cents/kwh price might be possible because of the plunge in the price of the polysilicon used in the production of solar cells from US$400/kg to about US$100/kg, one local paper reported by quoting an anonymous insider.
Analysts suggest the polysilicon price could slide further to US$50/kg by the end of 2009 or early 2010. In the long run, the price may stabilize around US$30/kg or even US$15/kg due to the technological advances in upgrading metallurgical grade silicon.
As China's largest solar power plant, the Dunhuang project will set the benchmark on-grid price for future projects and will lay down a model for nationwide subsidies to solar