PV Analysis of the Belt and Road Initiative

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The Belt and Road Initiative: PV demand analysis for countries along the route

The Chinese President proposed the Belt and Road Initiative in 2013. In the same year, the Premier of the State Council also mentioned the importance of policy development. The Belt and Road Initiative has become the foundation of the trade development in China. 

Policy Implication

1.Route Planning

The core of the Belt and Road Initiative is China and it all extends from there. The route runs through the Afro-Eurasia. The goal is to build three super-rails across the Eurasia and build two waterways on the sea. 

The Belt and Road Initiative_Overview

The Belt and Road Initiative_Map

2.Countries Along the Route

A total of 64 + 1 (the +1 is China) countries is covered in the Belt and Road Initiative. However, in order to cover as many countries along the route so all the potential demand can be seen, this article includes Djibouti, Kenya, Ethiopia of Africa and Greece which signed a Memorandum of Understaning (MOU) this August. There are a total of 68 + 1 countries.  

The Belt and Road Initiative_Country

The Belt and Road Initiative_Country

3.New Energy Position

In the article of the “Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road”, it mentioned that a lot of clean and renewable energy cooperation will be promoted actively and an upgrade of cross-border electricity as well as power grid will be conducted. The policy plans to effectively mediate the energy among the countries along the route and boost the utility. 

PV Development of Countries Along the Rout

1.Cumulative PV Installation

This article divides all the countries along the route into eight major regions (China not included). The growth rate of the eight regions’ cumulative installation in 2017 reached 123%, much higher than 75.62% of the world. If adding China’s 130GW, the total installation will take up 44% of the world’s installation. This highlights the significant influence of these countries along the route on the global PV development. 

The Belt and Road Initiative_PV installation

Source: IRENA RENEWABLE CAPACITY STATISTICS 2018

The Belt and Road Initiative_PV Cumulative Installation

2.Installation Performance

Southeast Asia and Mongolia

Solar radiation is at 1,460-1,900kWh per square meter every year in the Southeast Asia. Therefore, everyone is looking forward to the PV development in the Southeast Asia. 

The cumulative installation reached 4,195MW for the Southeast Asia and Mongolia in 2017. Other than the East Timor, the rest of the countries in the Southeast Asia are members of ASEAN. After a careful evaluation, ASEAN aims to achieve 55GW by 2025. This highlights the market’s enormous potential for growth. 

The Belt and Road Initiative_Southeast Asia Mongolia

Source: IRENA RENEWABLE CAPACITY STATISTICS 2018

Western Asia

The cumulative installed capaity reached 5,614MW in the Western Asia and 3.4GW of which came from Turkey, representing 60.9% of the total installed capacity in the Western Asia. In addition, many countries in the Western Asia have come up with renewable energy development plans. PV plays a key role in the plan. 

The Belt and Road Initiative_Western Asia

Source: IRENA RENEWABLE CAPACITY STATISTICS 2018

Southern Asia 

The Southern Asia’s cumulative installation reached 20,132MW in 2017, with a growth rate of 256.63%. The growth is mainly driven by the large-scale and rapid development of the Indian market. The cumulative installed capacity reached 19GW in India, accounting for 94.61% of the Southern Asia’s total installation. 

The Belt and Road Initiative_Southern Asia

Source: IRENA RENEWABLE CAPACITY STATISTICS 2018

Central Asia 

The Central Asia only had a cumulative installation of 62MW in 2017, of which, Kazakh’s 59MW stood out. On the other hand, Uzbekistan plans to achieve 450MW by 2025. 

The Belt and Road Initiative_Central Asia

Source: IRENA RENEWABLE CAPACITY STATISTICS 2018

CIS

The cumulative installed capacity reached 1,496MW for the CIS countries. Among all, Russia and Ukraine caught the most attention. The installation of the two countries accounted for 89.9% of the CIS countries’ total installation.

The Belt and Road Initiative_CIS

Source: IRENA RENEWABLE CAPACITY STATISTICS 2018

Central and Eastern Europe

The cumulative installation reached 8,605MW in the Central and Eastern Europe in 2017, with a growth rate of 4.36%. Poland, Lithuania, Hungary, and Slovenia are the major support to the PV development in this area. These countries are also the reason to the installation growth in 2015-2017.

The Belt and Road Initiative_CEES

Source: IRENA RENEWABLE CAPACITY STATISTICS 2018

Africa

The installed capacity reached 138MW for Africa in 2017. Among all, Egypt and Ethiopia caught the most attention. Egypt is building the world’s largest solar park – Benban solar park. The Benban solar park is expecting to contribute 2GW of PV capacity to Africa in 2019. Meanwhile, Ethiopia came up with a 300MW PV plan for 2016-2020.

The Belt and Road Initiative_Africa

Source: IRENA RENEWABLE CAPACITY STATISTICS 2018

Conclusion

The Belt and Road Initiative includes 68 countries and the number of countries is still increasing. The growth momentum and potential of each region is different. 

For the Southeast Asia, take Vietnam and Thailand as examples, Vietnam and Thailand plan to install 12GW and 6GW of PV capacity by 2030 and 2036, respectively. The two nations also launched the FiT and Net Metering policies to stimulate their PV development. 

For the Western Asia, Saudi Arabia has set a wind + PV target of 9.5GW by 2023. However, the country announeced in October this year to put on hold a US$ 200 billion PV project with SoftBank. Rumor has it that Saudi Arabia is woking on a broader renewable energy strategic plan. This move adds variables to Saudi Arabia’s PV development and the impact remains to be seen. On the other hand, Turkey allows projects with a scale smaller than 1MW to be installed without authorization, boosting the installation. But this forced the Turkish government to consider how to increase the installation for utility-scale power stations. In addtion, Turkey recently witnessed a serious depreciation in its currency Lira, highlighting the instability in the economy. As a result, PV installation is likely to reflect a downtrend in Turkey.

For Central Asia, Kazakh witnesses the better PV development. Currently, Kazakh and EBRD are working together. Kazakh is receiving financial support from EBRD to help building various power stations in the nation. 

For Southern Asia, India aims to install 100GW of PV capacity before 2022. In order to achieve this goal, India’s PV installation increased year by year from 2015 to 2017. However, the launch of safeguard tariff this August is expecting to slow down growth. 

For CIS countries, Russia plans to achieve 1.52GW of PV installation by 2024. In order to reach this goal, Russia came up with 775MW of bidding projects last and this year. This shows the Russian government’s determination in promoting PV and therefore PV can be looked forward to in this country in the future. 

For Central and Eastern Europe, 12 of all are members of the EU. The EU plans to have renewable energy take up 20% of all energies in 2020. Member countries have set different plans in order to ahieve this goal. Take Poland as an example, the nation aims to increase the share of renewable energy to 15% by 2020. In the aspect of PV development, Poland is one of the countries in the Central and Eastern Europe to witness an uptrend in PV installation. The nation relies on auction and prosumer for PV policies.

For Africa, Egypt plans to increase the share of renewable energy to 20% by 2020. PV is one of them. The nation relies on FiT and they are currently looking for ways to transfer FiT to auction.

With the launch of the Belt and Road Initiative, PV manufacturers are generally positive about the future PV market. Overall, the Belt and Road Initiative provides a platform to help PV companies expand the market and have more opportunities to work together. If the policy is put into practice succesfully in the future, it will take the development of the global PV industry to the next level. 

PV Infolink will publish a series of special reports on the countries along the Belt and Road route every two weeks. The purpose of the report is for our partners and the industry leaders to find new development opportunties through our explanation to make the PV industry continue to grow and thrive.

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