China Clean Energy Syndicate – [2020 June 01]

China’s renewable market is, evidently, facing some serious challenges this year: the collective project dash yet lack of uncertainty in subsidy, the limited grid-capacity for the new project approvals, the supply chain bottlenecks, etc. 

And yet, state-owned energy players and the local government seem to show the same enthusiasm in investing in the future: grabbing more projects, unleashing more plans–as we see in last week’s new energy market in China.

The question is: is it a good sign of “business as usual”? or is it concerning, as they may be just kicking the “can” down the road?

Like always, we want to point out a few highlights: [25 May- 31 May]:

  • WIND: China has yet another turbine OEM shows interest in floating wind development, as United Power set off a tender to find floating turbine design contractor
  • RE: Henan province will have no grid capacity for new wind/solar plants from 2021-2025–a signal of China’s looming RE curtailment issue to come in the 14th Five-Year Plan period
  • HYDROGEN: Shanghai and Gansu both announced some ambitious steps to accelerate H2 Industry-Development–regional governments remain keen on hydrogen investment
  • EV Battery: Volkswagen becomes the biggest shareholder of China’s EV battery maker Guoxuan

Scroll down for the 11 updates. Hope they could bring some new ideas for your week.

Best Regards,

Energy Iceberg: to serve as a Knowledge Base of Chinese Clean Energy Policy for Foreign Stakeholders

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Wind

DATA: Incremental Wind Capacity Shrank Significantly in Jan-Apr 2020, Down 36% Compared to Same Period 2019

National Energy Administration (NEA) ‘s recent data shown:

  • Incremental Wind Capacity: Due to the outbreak of the Corona crisis, China’s incremental installed wind power capacity during Jan-Apr this year was 3.637 GW, dwindled 36% YoY. Additional grid-connected capacity was 1.13 GW.
  • Incremental Offshore Wind: Offshore wind adds 0.495GW new grid-connected capacity, increased significantly comparing to the same period last year.
  • Cumulative Offshore Wind: The cumulative installed capacity of offshore wind power now reached 6.42GW.
  • Percentage of Installed in the Total Planned: the estimated portion of completed projects (in Jan-Apr) in the total planned projects (for 2020 as a whole) was 13%, compared to 22% in 2019 same period

Energy Iceberg Note: Offshore wind appear to perform slightly better than onshore wind. But still, the newly added offshore wind capacity (495MW) is shy of some 11GW under construction and over 50GW projects planned. 

The lower percentage of project completion shows the disruption of COVID-19 and suggest a more hectic schedule of the developer to push through grid connection in the second half this year. 

China Guodian and Donggang City (Liaoning Province) to Set off a Mega Hybrid Offshore Wind Complex Totalling 2.3GW

China Energy Investment Corp’s affiliate Guodian signed a cooperation framework agreement with Donggang Municipal Government, of Liaoning Province, last week. The cooperation entails the development of a mega hybrid project consist of offshore wind, onshore wind, and PV plants, of which total capacity is at 2.3GW.

Energy Iceberg Note: the detailed plan for each generation sources is not yet clear. But the project is likely to be the largest offshore wind hybrid complex ever announced.

Notably, this is also a completely new project in Liaoning. The province previously set an offshore wind development target which is to develop the Zhuanghe 1.9GW offshore wind complex. The deal is still early stage but shows CEIC is keen on grabbing pipeline projects for 2021-2025 time frame.

More information about Liaoning province’s offshore wind strategy and status quo: https://energyiceberg.com/china-offshore-wind-province-breakdown-2/

United Power Shows Intention in Floating Offshore Wind Turbine Development

Guodian United Power, a CEIC affiliate, last week released a procurement announcement to solicit contractor for a floating turbine research project. The research scope includes a floating offshore wind turbine’s conceptual design, and the integrated floating system design, as well as testing the design’s performance.

Energy Iceberg Note: United Power has been lagging in the two most competitive turbine R&Ds battlegrounds–10MW turbine R&D and the floating development. It has yet to release any offshore machine larger than 5MW. And this is the first move into floating. However, a procurement like this is a positive step forward. The firm has likely been in touch with potential research contractors. 

More on United Power’s current ranking in the Chinese turbine market and its sharp fall during 2017-2019: https://energyiceberg.com/china-wind-oems-2019/ 

More on Chinese OEMs’ competition in developing 10MW turbines: https://energyiceberg.com/chinese-oems-turbine-development/ 

Solar

Henan Province Said it Would Have NO Capacity to Accommodate New Wind and PV Capacity in 2021-2025

State Grid’s Henan provincial affiliate last week announced their prediction on the renewable consumption situation in Henan province in the coming “14th Five-Year Plan” period (2021-2025).

The grid predicts that there is no more grid-capacity left to accommodate new wind/PV projects for the upcoming 2021-2025 period. And unless new projects could provide energy storage capacity, the provincial government will not be able to approve new units until 2025.

To break it down: the province has installed 8.011GW wind and 10.7GW solar capacity. It has 17.58GW wind and 830GW mounted solar planned which has secured grid connection capacity. Moreover, the grid will provide 600MW per year grid capacity for new rooftop/residential solar. That means, by 2025, the province will have installed wind and solar capacity of 40.13GW with only the existing projects to be built, which has already exceeded the planned 14th FYP provincial target.

Energy Iceberg Note: this looks like a piece of regional renewable news. But we would like to point out that more regions in China will be facing a similar and severe challenge in the coming 2021-2025 for renewable grid-connection accommodation issue. There is a clear out-of-sync between RE construction rush and the limited grid construction between 2018-2021. The only resolution right now for RE developers is to invest in storage capacity and technology. 

Hydrogen Storage & Fuel Cells

Shanghai Free Trade Zone Released Integrated Hydrogen and Other New Energy Development Action Plans for 2020-2022
Shanghai Free Trade Zone Released Integrated Hydrogen and Other New Energy Development Action Plans for 2020-2022www.sohu.com

The development plans envisioned that by 2022, the free trade zone had:

  • Further improved the integrated energy infrastructure such as power, gas, and supply stations,
  • Built 7 “modern” hybrid energy supply stations,
  • Established demonstrations of oil&gas, oil&H2 or oil&electricity hybrid plants
  • (Above list details the hydrogen projects planned by the FTZ)

Jiuquan City to Accelerate the Constructions Renewable-to-H2 as well as Natural Gas and H2 Blended Demos

Jiuquan City of Gansu Province launched a business matchmaking meeting last week for hydrogen energy industry projects.

  • Tsinghua University and Beijing Hydrogen Energy Technology Co. docked their two demonstration projects, which is set to blend H2 in existing natural gas pipeline and to develop vehicles fueled by blended H2 and NG.
  • Lanzhou Yulong Gas Co. is developing a renewable power to hydrogen project in the city.

Sinopec to Build 20 Hydrogen and Integrated Energy Fueling Stations in Guangzhou

Sinopec’s Guangdong affiliate set off a grand plan to build more than 20 hybrid hydrogen and integrated new energy fueling stations in Guangzhou City, Guangdong Province. These fueling stations is dubbed as “five in one,” combining H2 fueling, gas fueling, EV charging, non-oil business, and photovoltaic power generation.

Sinopec claimed that the series of projects would bring in ¥10 bn annually, once completed.

EV & Battery

Shanghai Electric to Develop A Mega 100MW/400mwh Vanadium Flow Battery Energy Storage Power Plant in Yancheng

Shanghai Electric Central Research Institute revealed that the electricity equipment giant planed to invest ¥600 mn to build a 100MW/400MWh vanadium flow battery energy storage power plant in Yancheng City, Jiangsu Province.

Shanghai Electric Central Research Institute was established in 2004 and has engaged in the development of vanadium battery energy storage since 2011. The firm set up a flow battery ESS department in 2012. Its vanadium flow ESS products have been completed the whole process from R&D design, platform testing, manufacturing to commercial application.

Energy Iceberg Note: more and more 100MW size BESS projects are unfolding in China.

This report (in Chinese) explained the advantage of using vanadium flow battery in ESS system.

Volkswagen becomes the biggest shareholder of China's EV battery maker Guoxuan

German automaker Volkswagen has become the biggest shareholder of China’s electric vehicle battery maker Guoxuan High-Tech Co Ltd with a 26.5% stake, Guoxuan said in stock exchange filings on Thursday.

Energy Iceberg Note: Guoxuan used to be the No.3 EV battery provider in China, following CATL and BYD. By the deal, Volkswagen would secure its production capacity of EV battery in China. The firm plans to produce 26m EVs in the coming year, half of which is planned to manufacture in China.

Peugeot, Total to Relocate Battery Production to France From China

Peugeot SA said Tuesday that it would invest around 2 billion euros ($2.18 billion) with energy giant Total SA to relocate battery production from China to a gigafactory in France. The French carmaker said the initiative is part of a series of measures the company is adopting in France. This includes an investment of over EUR400 million for future electrified powertrains at its French sites and the production of components currently sourced in Asia starting from 2022.

Clean Energy Related

China Would Add 85.1GW of New Grid Capacity for Wind and Solar Power This Year–But Probably Still NOT Enough for all the Planned RE Projects?

China’s National Energy Administration released prediction on 2020 China’s renewable power (grid-access) accommodation and consumption.

The report confirmed that the country would add 85.1GW new grid capacity to accommodate additional wind and solar capacity–wind 36.65GW, solar 48.54GW.

Also, the above figures did not include residential (rooftop) photovoltaics, for which the grid would provide an extra 7GW capacity.

Energy Iceberg Note: the data means that China’s new grid-capacity this year for renewable has jumped, compared to on average 60GW incremental grid capacity in the previous year. 

But still, grid access is not enough for everyone, given the project dash this year. And there are several provincial governments announced to have no more grid accommodating capacity from now to 2021. The balance of RE and grid development is still a tricky matter.

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