Tongwei deal shows solar power could boost China’s seafood output

A deal that could boost China’s seafood output more than any other was signed recently by one of China’s top fish feed companies — and a solar energy company. Tongwei Group Co. signed an agreement with GCL System Integration Technology Co. to co-operate on high-efficiency solar farms that will be installed over ponds at fish farms controlled by Tongwei (which aside from processing and selling feed also farms tilapia and shrimp) or its customers/suppliers.

The deal hasn’t set a target on solar energy to be produced but it does name one of China’s top technology firms, Huawei Technology Co. (it will supply cloud technology helping to manage the power generated) as a partner alongside Chaori Co., one of China’s biggest makers of solar panels.

Staff at Tongwei describe this deal as a game-changer because it can reduce the cost of aquaculture and give fish farmers a whole new stream of income. The deal also fits nicely with the priorities of China’s government. Judging by a read of the circulars emanating from the agriculture ministry in Beijing the term “solar integrated farming” has become a priority among agricultural officials here. Taking the lead from other territories like Australia, Israel and Japan, they want to use the expansion of solar power to subsidize the modernization of Chinese agriculture and its massive aquaculture sector.

China, according to the International Energy Agency, needs to add 1,000 gigawatts of carbon-neutral energy capacity such as solar power to meet its commitment to capping carbon emissions by 2030 under the recent climate change deal signed with the United States. That means a massively increased installation of (among other things) solar panels.

Indeed, China has been furiously adding solar capacity, becoming the world’s No. 1 installer of solar power by adding panels to building roofs but also through utility-scale installations that congregate large numbers of panels in sunny, rural areas.

As China’s agriculture grows in scale and professionalism, the country is also figuring that agriculture is the best way to increase the roll-out of solar panels. Indeed, it will seem a no-brainer to anyone who’s visited rural and seen the fields of corn and vegetables as well as the large ponds for breeding freshwater fish like carp and tilapia.

Tongwei aside, there are already examples of success, such as a well-publicized solar project that sees solar power installer Zhenfa New Energy teaming up with local government in the unlikely arid location of Dali province to install PV solar panels above ponds in new fish farms. The 1,100-megawatt capacity generated from the project is enough to power the local village but can also be sold onto the local grid.

Labor and land tend to be cheaper in rural China but incomes lag behind urban areas, a disparity that worries China’s government. Under solar-integrated schemes, farmers who tend their farms are being paid to allow independent parties to install solar panels — though different models mean the farmers themselves install the panels and get paid for the electricity produced.

There would appear to be few better places to locate rows and rows of solar panels than above fields and fish ponds and the sight of thousands of solar panels fixed to metal platforms above the rows of egg plants or giant ponds for fish and shrimp would make anyone optimistic that solar power can be rolled out faster than ever before.

Aside from clean energy, China’s other big priority is food security, which is in turn driving government spending on agriculture and aquaculture. Making additional income from solar power would ensure greater income certainty for farmers who often complain of low margins and weather damage to their output.

Fish ponds are probably best suited to integrate solar because the ponds don’t have to be ploughed or tilled every growing season. Also, the Ministry of Agriculture, which supervises the fisheries sector, has made it a priority to increase the output of fish as a more efficient way of satisfying China’s growing demand for proteins.

The huge scale of the fish farming-for-export business, meanwhile, means there’s a huge amount of space available for solar installations. Provinces like Guangxi and Hubei have identified freshwater aquaculture (the breeding of tilapia fish and shrimp in particular) as a big driver of rural incomes and have been subsidizing the expansion of fish farming and fish processing enterprises to boost local supply of food, jobs and income.

While the potential of solar-integration is obvious and huge, there will have to be a consistent national policy setting standards and structures so that solar installations are seen as doable for farmers while red tape is limited. Likewise, Chinese farmers who manage the panels will need training in the technical specifications and education on the economics of solar power.

There are other potential challenges, like the different topographical and climatic conditions across regions that challenge solar equipment makers and installers. Meanwhile, the cyclical nature of farm prices means government policy will be vital to ensure the solar installations are properly maintained and managed through lean periods.

It’s good to see that China’s National Energy Administration has promised to regulate solar integrated agriculture while provinces like Shaanxi are requiring all new solar installations to incorporate agriculture. Investors like to put money into solar, since national government offers long-term security through minimum feed-in tariffs per kilowatt hour generated from solar power. But there is no national set of standards to guide in the installation of solar panel systems in farms. Efficiencies and economies of scale are hard to achieve with different regional governments setting different standards, certifications and requirements.

China needs energy as badly as it does a secure food supply. Solar integrated agriculture is a great opportunity for China to turn necessity into a virtue. But a coherent national policy will first have to be in place to encourage investors to install the solar panels down on the farm.