Tibet is located in the west of China, bordering the Indian subcontinent. Its 2014 nominal GDP was $14.8bn, with a very high growth rate of 11.2% from 2013. As part of a China Western Development Program, it benefits from a lower business income tax rate (15%) than other, further developed provinces (25%). Tibet has also piloted China’s early rural electrification programs employing renewable energy since the 1980s.
As of year-end 2014, Tibet had an aggregate power installed capacity of only 1.4GW, of which 60.4% (879MW) was large hydro, 28.1% (400MW) coal, and 9% (130MW) solar. By comparison, Tibet’s wind capacity totals just 10MW. In 2014, Tibet generated 76.3% of its 2.5TWh electricity from hydro thanks to its abundant local resources.
Tibet has the best solar resources in China, according to Energy Institute of Tibet. A typical PV plant in Tibet can produce power 1,800 hours per year – 432 hours above the national average.
To exploit this natural resource, since 2012 Tibetan PV projects have been offered higher feed-in tariffs of CNY 1.0/KWh ($0.16/KWh) than projects in other provinces. The higher FiT remains valid through 2015. However, a limited existing grid infrastructure has hindered a serious spurt in large-scale PV project development.
Tibet’s government has set stated its intention to see 2.6GW of hydro installed by 2015 and over 100GW added by 2025 for both domestic consumption and cross-provincial power trades. To accommodate power from gigawatt-scale hydro plants outside of Tibet, the local grid company has applied for licenses to build six extra-high voltage cross-provincial transmission lines. Bundled with hydro power, wind and solar are able to serve the power demands in central and southern China through those transmission lines. According to Tibet’s 12th Five-year Plan for general economic and social development, the cumulative installed solar PV capacity will reach 160MW by 2015, indicating a 100MW increase from 2014.