It was a relatively quiet week in terms of company activities. However, Beijing announced a top-level energy policy which may spur hydrogen and energy storage development to in the country’s more “remote” areas.
Still, we want to highlight the following updates and observations on last week’s clean energy market:
- Beijing’s ultimate plan to solve renewable energy subsidy deferred payment is getting real: more news suggest that MoF, PBOC and the energy regulator have reached an agreement for having the grids to issue bonds.
- The “old friend” E.D.F. is willing to help China in industry software development amidst US-China tension: it proves again that a crisis for some companies could be an opportunity for others.
- Beijing plans to build the world’s largest H2 refuelling station: there is just no shortage of “largest” plans in the hydrogen sector.
- Coal is still on the rise in China: we are concerned that the recent national economic strategy’s emphasis on “internal circulation” would push China to stick to coal power longer.
Please scroll down for the ten updates and our reviews.
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Clean Tech Policy
The National Development and Reform Commission (NDRC) last week released a draft of “Western Region Industry Development Catalogue 2020 Version,” which is open for comments.
The catalogue is a policy routine for the NDRC to guide industry development in China’s western region. The highlight of this year’s catalogue is the emphasis of hydrogen.
See break-down of hydrogen, storage, and RE development plans in each province:
Hydrogen industry development would be in Guizhou, Shanxi and Inner Mongolia,
- Guizhou plans to promote several hydrogen-related industries including hydrogen processing and manufacturing, fuel cell manufacturing, construction of hydrogen pipelines and hydrogen refuelling stations, etc.;
- Shanxi: promotes new energy operation services in geothermal and hydrogen;
- Inner Mongolia: promotes high-performance rare earth permanent magnets, hydrogen storage, luminescence and other rare earth functional materials and devices.
Energy storage is highlighted in Qinghai, Ningxia, Xinjiang and Inner Mongolia’s plans:
- Qinghai & Ningxia: energy storage station construction and operation
- Xinjiang: energy storage stations building and operation, battery materials production, storage battery production.
- Inner Mongolia: electric storage technology development and application.
NDRC also encourages wind and photovoltaic power generation in Gansu, Qinghai, Ningxia, Xinjiang, and Inner Mongolia.
According to local media, China’s top economic planners, including Ministry of Finance (MoF), People’s Bank of China (PBOC), National Development and Reform Commission (NDRC), have agreed to solve renewable subsidy deficit and deferred subsidy payment by having the two grid companies to issue bonds.
The first array of some ¥140bn of bonds is expected to be issued by the end of this year, which will cover deferred payment to RE projects in the 13th Five-Year Plan (2015-2020)–in other words, the approved PV, wind and biomass projects in the first eight batches of subsidy catalogues.
Energy Iceberg’s View: it is surprising to see the grids are cooperative of the strategy. Read our last week’s full review and analysis on the matter https://energyiceberg.com/bond-to-rescue-subsidy-deficit/
The world’s leading nuclear operator, Électricité de France (EDF), recently reached a comprehensive strategic and technical cooperation with Zhejiang Yuansuan Cloud Computing Co. (Yuansuan). The two parties will jointly develop a SaaS model of localized intelligent simulation and industrial application collaboration platform.
EDF’S industrial software is certified by the world’s top nuclear industry associations and saw wide applications globally, the official statement of the deal emphasized.
Energy Iceberg Note: the deal shows China’s taking action regarding one of its industry development “chokepoints”–software– amidst escalating US-China confrontations. China’s largest nuclear firm CGN has been already listed in the Entity List”, which prohibits US firms from exporting technology to companies in the list. Also, Pentagon this year added CNNC, CSIC, CSSC into a “Communist Chinese Military Companies list” which opens the door to impose similar sanctions. Although most companies in the list brushed off the immediate threat of being enlisted, the Chinese power industry is, in fact, highly dependent on US software–for design, engineering and operation. The concern over US export ban already pushed domestic players to seek alternative options in that direction, if any.
China Datang plans to build a hybrid offshore wind and fish farming project off the coast of Dongfang City (Ledong Li Autonomous County) of Hainan Province.
The company last week launched a tender to solicit research contractor. The installed capacity of the project is 500MW.
Energy Iceberg: notably, this is another offshore wind investment plan recently revealed in Hainan province, which owns the largest sea territory in China but used to be against wind development. Last month, the province signed a landmark agreement with SPIC for deep-sea offshore wind development, signalling a change of attitude.
See details of the SPIC deal: https://energyiceberg.com/china-clean-energy-syndicate-2020-aug-03/
The world’s largest wind power developer, China Longyuan, announced interim result last week. In the first half of 2020, the company secured in-total 13.115GW wind and photovoltaic projects, far exceeding the amount of the same period last year. 6.22GW was from the wind sector and 6.895GW from PV.
Hydrogen & Fuel Cells
Hydrogen energy solution developer, Beijing SinoHytec Co. (SinoHytec) last week started trading on the Shanghai STAR Board, also dubbed as “China’s Nasdaq.” SinoHytec, thereby, becomes the first Chinese hydrogen-specific company that goes public in china.
The IPO prospectus revealed that the company aims to raise up to ¥1.2bn, most of which would be spent on the firm’s fuel cell manufacturing base “Phase 2” as well as R&D for fuel cell engine to be embarked in Beijing’s Winter Olympics.
By now SinoHytec has developed fuel-cell products covering 30-100kW, and its subsidiary Shenli Technology has realized full local content production, with a production capacity of 2000 engines per year and 1000 stacks per year.
After completion of the new manufacturing base, SinoHytec would be capable of producing 8000 sets of 30kW/60kW fuel cell engines annually. Construction completion would be in 2021, and full operation shall start in 2024.
Last week the National Development and Reform Commission (NDRC) and Beijing City jointly proposed the building of a Sino-Japan International Cooperation Industrial Zone in Daxing District, A.K.A the “Daxing International Hydrogen Demo.”
The Demo Zone develop plan includes the construction of the world’s largest hydrogen refuelling station, which has a daily refuelling capacity of 3.6 tons. The development is scheduled to complete by the end of 2021.
Battery & Storage
BYD last week released a new “blade” battery energy storage product on the 14th SNEC exhibition held in Shanghai.
The company said that the new product— BYD Cube — occupies only 16.66 square meters with a storage capacity of 2.8MWh. Comparing to the 40-foot standard container energy storage system in the industry, the energy density of the BYD Cube allegedly increases by more than 90% per unit area. The BYD Cube also supports 1300V DC voltage.
BYD is preparing to build a 10GWh automated energy storage assembly line in Luhe Industrial Park, Shanwei City of Guangdong Province.
Contemporary Amperex Technology Co (CATL) last week announced in a filing that it plans to invest around ¥19bn to acquire equities of firms, which are either its upstream suppliers or its downstream globally.
Currently, CATL holds shares of 45 companies, of which 11 are wholly-owned:
- In the battery industry chain, CATL’s investment covers the entire ecological cycle of battery use, such as raw materials, batteries/modules, battery packs, cascade utilization, and material recycling.
- In terms of travel services, CATL clarified that it would invest in a battery asset management company led by NIO. The company aims to promote the separation of vehicles and electricity, and on this basis, it will launch BaaS (Battery as a Service) product.
The world’s fleet of coal-fired power stations has got smaller for the first time on record, with more capacity retired in the first half of 2020 than the amount opened. The 2.9 gigawatts (G.W.) decline in the first half (H1) of 2020 takes the global total down to 2,047GW.
However, against the backdrop, China’s coal units continue to increase, and the country is now the leading factor for new construction.
- 53.2 GW of new plants is planned in China, which is 90% of new coal-fired generation plants scheduled to be built in the world.
- 12.8 GW of new capacity started construction, amounted to 86% of the world’s total.
- 11.4 GW of new coal-fired capacity started operation in the first six months, accounting for 62% of the global amount.
- The operating coal units in China accounted for 50% of the world’s total.
- China’s new-build coal units in the pipeline are roughly 48% of the world’s total.
Energy Iceberg: given China’s recent emphasis on “internal circulation,” we expect that Beijing’s energy strategy will focus on domestic energy sources, including both renewable and coal. Coal capping reform risks of slowing down under the current climate.https://energyiceberg.com/chinas-14th-five-year-plan-for-power-coal/