China Clean Energy Syndicate – [2020 June 08]

The clean energy sectors saw several signs of progress last week, in the sense of new product development, corporate alliance as well as new policy introduction. Most of these suggested a positive long-term direction of the industries, despite facing near-term struggles. 

A few highlights of these milestone events during [June 1- June 7]:

  • Wind: two Chinese OEMs reached significant steps last week in 10MW turbine development–Dongfang Electric’s 10MW prototype begins offshore installation; Ming Yang’s 10MW generator came to light
  • Renewable: as predicted, another HK-listed Chinese renewable power company announced its delisting/privatization plan, set to head back to the mainland
  • Hydrogen: national hydrogen development strategy is on the way; Toyota announced 6-party fuel cell joint venture in China
  • Energy Storage: the grid operator set a new standard for renewable power developers and demand for energy storage construction for new projects

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

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Ming Yang Greets its 10MW Offshore Wind Turbine Generator
Ming Yang Greets its 10MW Offshore Wind Turbine

Chinese wind OEM Ming Yang is getting closer to launch its 10MW offshore wind prototype turbine. Last week, its generator supplier China Railway & Railroad Co (CRRC) Yongji unveiled the country’s second 10MW permeant magnetic synchronous generator (PMSG) on June 6. The PMSG is dubbed as the “largest in the Asia Pacific.”

The PMSG is to supply to Ming Yang for its semi-direct drive 8-10MW offshore wind turbine platform. Last Dec, Ming Yang unveiled the nacelle of the 8-10MW product in Guangdong, but the 10MW prototype has yet to be materialized.

Energy Iceberg Note: the PMSG marks Ming Yang is moving forward in launching China’s second 10MW prototype, following the footstep of Dongfang Electric. Overview of Chinese OEMs’ turbine R&D progress:

Another Privatization of Chinese RE firms: Huadian Seeks Delisting from Hong Kong and Head Back to Mainland

Huadian Fuxin, the renewable power subsidiary of China’s major power generation group China Huadian, unveiled a privatization proposal last week to seek to delist from Hong Kong stock exchange (HKSE).

According to the terms in the privatization proposal, China Huadian’s wholly-owned Fujian Huadian Furui subsidiary offers to buy all of Huadian Fuxin Energy’s shares in HKSE at HK$2.50 per share, which is 65.6% higher than the listed firm’s May 27 closing price. The company’s stock jumped 60.26% on June 2 after the privatization announcement.

Energy Iceberg Note: the privatization plan is fully expected. It is already the 5th cases of Beijing-owned power conglomerates’ HK-listed renewable subsidies seeking to leave the capital market of the special administrative region. The privatization of Huadian Fuxin follows that of CGN Renewable just two months ago, and those of HN Renewable (of China Huaneng) and China Power New Energy Development (CPNED of SPIC). 

These privatizations have major implications. Please check our previous analytical report for more information. 

Confusion Triggered by Policy Regarding “Grid-Connection Time Extension”

National Energy Administration Northern Bureau announced to provide “grid connection” testing time extension for 22 wind and solar projects.

Energy Iceberg Note: the policy is meant to allow wind and renewable projects to have a longer time for grid-connection testing. Previous, all renewable projects are required to complete testing and secure power generation license (from the grid operator) 90 days upon the power plants hooked to the grid. By the new order, these 22 renewable projects would have more than 90-days for grid-connection testing.

However, the term of “grid-connection time extension” in the policy triggered an unexpected drama, leading many in the renewable industry to think the extension was meant for a delay for the “renewable subsidy” deadline. As mentioned, wind and solar projects under construction are required to complete grid connection before the end of 2020 and 2021 (for offshore wind), if they wish to secure the national subsidy.


MIIT New Policy Set New Requirements on the Efficiency of Solar Panels

The Ministry of Industry and Information Technology (MIIT) issued a new draft policy in late May requiring that:

  • The conversion efficiency of the newly added single-crystal cell should be greater than 23%.
  • The new production capacity needs to meet the conversion efficiency of polycrystalline cells not less than 20%
  • The conversion efficiency of polycrystalline modules should be not less than 17.8%, and the conversion efficiency of single crystal modules not less than 20%.

Energy Iceberg Note: This policy implies that photovoltaic companies would be under pressure to invest in new technologies such as PERC+, TOPCon, and HIT. The upgrade of the photovoltaic technology route from P-type to N-type is expected to initiate technological reform.

Capacity Expansion Rush Continues among PV Makers

Another solar producer in China announced ambitious production expansion plan. Risen Energy Co. announced last week to spend ¥20.6 bn to develop production lines of 15 GW high-efficiency cells and 15 GW high-efficiency module in Yiwu, Zhejiang. The firm will carry out the production building in two phases, which is expected to complete in 3-5 years.

The news marks yet another capacity expansion plans brought by the Chinese PV manufacturers this year. Other cases include

  • Jingao Technology invested ¥10.2 bn in building 10 GW high-efficiency cells and 10 GW high-efficiency components in Yiwu;
  • Tongwei invested ¥20 bn in constructing 30 GW high-efficiency solar cells and supporting projects in Chengdu;
  • Longi announced to spend ¥4.5 bn in developing 10 GW monocrystalline battery project in Xi’an, and ¥2.3 bn in adding 10 GW monocrystalline silicon rod and wafer capacity in Qujing;
  • GCL System Integration (GCL) plans to spend ¥18 bn in establishing a new industrial base, which would add 60GW production capacity

Hydrogen Storage & Fuel Cells

China to Formulate a National Strategy for Hydrogen this Year, Said NDRC

National Development and Reform Committee last week submitted a review on China’s economic development in 2019 and a plan for 2020. As a routine, the work proposal is sent to the 13th National People’s Congress for approval and invite feedback from the People’s Political Consultative Conference(CPPCC).

The report confirmed that, besides other energy topics, the regulator would support the development of new-energy vehicles and energy storage industry. 

It also promises to establish a national strategy for hydrogen development this year. 

Sinopec to Build 11 Hydrogen and Integrated Energy Fueling Stations in Shanghai, After its 20-Station Plan in Guangzhou

Sinopec’s Shanghai affiliate plans to build 11 hybrid hydrogen and integrated new energy fueling stations in Shanghai City. These fueling stations will be located in Jiading District.

The plan shows the commitment of Sinopec on H2 and would further cement its position in H2 infrastructure. Just weeks ago, the NOC also announced to invest in 20 hybrid fueling stations in Guangzhou, which are “five in one” stations combining H2 fueling, gas fueling, EV charging, non-oil business, and photovoltaic power generation.

Toyota and 5 Chinese Auto Firms Teamed up to Forge a New Hydrogen Fuel Cell Joint Venture in China

Japan’s Toyota Motor Corp is doubling down on its commitment to the development of hydrogen fuel cell vehicles in China. The automakers announced a new venture on last week with Chinese automakers FAW Group, Dongfeng Motor, Beijing Automotive, GAC and hydrogen fuel cell developer Beijing SinoHytec.

The joint venture, United Fuel Cell System R&D (Beijing) Co. (FCRD), will develop fuel cell systems for commercial vehicles. For the JV, Toyota plans to invest Japanese ¥5.02 Bn for 65% shares. The rest 45% equity structure is: FAW 5%, Dongfeng Motor 5%, Beijing Automotive 5%, GAC 5% and SinoHytec 15%

Prior to the new deal, Toyota already forged another cooperation with FAW and GAC in 2019 to develop fuel cell vehicles in China jointly. The latest step would cement the Japanese auto maker’s position in China’s FCV market.

Sinopec Tianjin Successful Completed a 100,000 Nm3/H Natural Gas to Hydrogen Plant

Sinopec Tianjin Petrochemical’s 100,000 Nm3/h natural gas hydrogen production plant has been completed technical installation, which marks the largest NG-to-H2 plant of this kind in China embarking Chinese domestic technology.

The project started construction in Oct. 2018. Adopting Sinopec Luoyang Engineering Company’s (LPEC’s) low energy consumption steam reforming hydrogen production design, the firm claimed to be the first in China to develop this technology of indigenous design and IP. 

Battery & Energy Storage

State Grid advised that Shanxi Province to Build Energy Storage Storage Plants to Cover 15-20% of New Renewable Capacity

State Grid’s Shanxi affiliate submitted an advisory to the local energy regulator, which suggest the province to allow 800 MW new PV construction this year, including a 600MW zero-subsidy projects in Datong city and 200MW competitive pricing projects, all of which are required to complete by 2021.

Meanwhile, the local grid operator suggests these projects to construct energy storage that could cover 15%-20% of their power generation capacity.

Energy Iceberg Note: the “advisory” from the grid operator is likely to become stricter requirements for renewable projects. In that sense, the regional policy sets an example, and it is likely to see similar measures rolled out in Northern China. It is positive news to the BESS market. 

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