China Clean Energy Syndicate – [2020 June 15]

It was an interesting week for clean energy sectors in China. Several critical “new prototypes” announced new market updates; both central and local government unleashed policies that would support renewable, hydrogen and battery storage in the near term. However, as a recent study pointed out, Beijing has shown signs of loosening its grips over coal-fired power, as new builds surged in the past months.

A few highlights of these events during [June 8- June 14]:

  • Wind: Dongfang Electric’s 10MW received first order; while Shanghai released a five-year subsidy plan to support offshore wind project, this is not the local subsidy plan the industry was longing for.
  • Hydrogen: hydrogen is included in China’s river transportation development plan and Beijing’s “New Infrastructure” Investment plan
  • Power Policy: China is soon to unleash a “long term” renewable consumption supporting measure; however, Beijing shows signs
  • of loosening the “cap-coal” grip
  • Renewable: China General Nuclear pledges to double new energy capacity in five years

Scroll down for the 12 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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Policy Update

NEA Soon to Release: Guiding Opinion on Building a Long-term Mechanism for Clean Energy Consumption

Last month the National Energy Administration released a feedback-inviting draft to develop a long-term supporting mechanism for clean energy (renewable, hydropower) consumption.

Energy Iceberg Note: the policy is, in fact, an update of NDRC’s Clean Energy Consumption Action Plan that was established in 2018. Both brought up similar measures to increase renewable consumption and cap curtailments including improving system flexibility by adding peaker sources; strengthening energy storage applications; seeking local power demand or consumption sources (power-to-gas, heating, cooling, EVs). There are a few subtle changes on the emphasis of these measures, for which Energy Iceberg will provide further policy analysis in the coming weeks.

Wind

Shanghai Released a Local Subsidy Plan for Offshore Wind–But NOT the Same Plan that Developers Long for

Shanghai’s municipal government last week announced that it would provide subsidies for solar and offshore wind through 2021 while ending those for onshore wind. The subsidy amount will be according to the power generation of these projects.

  • Offshore Wind: Offshore wind plants installed by the end of 2021 will receive a subsidy of ¥0.1/kWh for five years. The maximum reward amount for each project will not exceed ¥50m.
  • Far-Sea Offshore Wind: the city said it would consider providing subsidy to deep and far sea offshore wind, of which the amount is under research
  • Solar: Utility-scale solar projects completed in 2019 will receive a subsidy of ¥0.31/kWh, while household and distributed projects will receive ¥0.151/kWh. The rate will be cut by one-third for projects finished in 2020 and two-thirds for those completed in 2021.

Energy Iceberg Note: the wind industry faces the sunset of national sunset from this year onward. All onshore wind projects are required to complete grid-connection before the end of 2020 for the 20-year national subsidy, and offshore wind has to complete by the end of 2021. Consequentially, the industry has been pleading for the local government to provide extra local subsidy to support new projects, especially the heavy-Capex offshore wind projects. 

However, it should be noted that this Shanghai subsidy scheme is not the same “local subsidy” that the industry was hoping. Firstly, it will only provide subsidy for 5 years; then it is for projects completed by the end of 2021–that means it is not a new subsidy for future projects. Right now, there is still no provincial subsidy scheme announced that could substitute the national offshore wind subsidy for future projects. The subsidy dilemma for the wind industry remains a significant challenge. 

More info: China’s provincial offshore wind policy https://energyiceberg.com/china-offshore-wind-province-breakdown-1/

China's First 10MW Turbine, of Dongfang Electric, Received its First Order

The tender information by China Three Gorges (CTG) for its Changle Outer Sea Wind Farm Zone A has come out recently. Goldwind and Dongfang Electric each won a cut of 100MW capacity.

Goldwind and Dongfang Electric will provide an 8MW and a 10MW turbine, respectively. Notably, Dongfang Electric also won the tender bid by the “lowest bid” among three competitors. The unit price of Dongfang Electric was about ¥6,590 /kW.

Energy Iceberg Note: the 10MW machine initially won a contract from Changle Outer Sea Project (Zone C) last year but then CTG “cancelled” that decision out of concern of Dongfang Electric’s supply capacity for the first-of-its-kind turbine. That concern has been addressed, evidently by the recent tender result. It is another milestone for Dongfang Electric and CTG in pushing forward their 10MW agenda.

More info: China’s 10MW wind turbine R&D update https://energyiceberg.com/chinese-oems-turbine-development/

GE Continued to Score Onshore Orders from the Chinese Market Amid Sino-US Trade Tension

GE Renewable Energy last week announced that it secured an onshore wind turbine contract from PowerChina’s local affiliate to provide12 units of 2.5MW onshore turbines to the Xuanli Qingfeng wind farm.

The deal marks the first turbine contract secured by GE from PowerChina.

Energy Iceberg Note: GE has secured several cooperations in China’s offshore and onshore wind market despite the ongoing trade war. The result is in a great part due to the surging demand for turbine supply in the market as developers are under high pressure to complete projects within 6-18 months.

Solar

CGN Expected to Double its Renewable Capacity by 2025

China General Nuclear Power Group (CGN) recently revealed that the firm’s total new energy asset reached ¥194.7b. The cumulative installed capacity of these asset (mostly nuclear and wind, as well as some solar and hydro) was 20.54 GW. The company predicted that in the “14th Five-Year Plan” period (2021-2025), the incremental installed capacity would maintain more than 3GW per year. By the end of the “14th Five-Year Plan” period, the cumulative installed capacity of new energy asset will exceed 40 GW.

Energy Iceberg Note: more info–who is CGN https://energyiceberg.com/chinese-power-utilities-2019/

Capacity Expansion Rush Continues among China Photovoltaic Listed Companies

Data have shown that since the beginning of this year, 12 photovoltaic listed companies have announced production expansion plans, of which the total planned investment amount is about ¥82.052b. At the same time, there are 18 Chinese A-share photovoltaic companies have issued private placements to raise some ¥39.2b.

Hydrogen Storage & Fuel Cells

China Outlines H2 Fuel Cell Ships Development Plan for Domestic River Transportation

Ministry of Transportation (MoT) recently issued a development framework on domestic river shipping development. The policy proposed to promote energy-efficient LNG-fueled ships as the primary measure to promote environmental-friendly development in domestic river transportation. It also mentioned exploring the applications of electric power and hydrogen fuel cell in shipping.

Energy Iceberg Note: so far the domestic river transportation is still fueled mostly by diesel. The gas industry has been looking into promoting LNG consumption in the sector for years. But the effort produced limited progress in the past, due to the uncompetitiveness of LNG prices. As LNG imported price dropped sharply, a move to LNG is a right step forward. 

The policy, for the first time, paves ways for H2’s application in China’s shipping industry.

Hydrogen Included in Beijing's “New Infrastructure” Action Plan

The capital city released its municipal “New Infrastructure Action Plan (2020-2022),” which sets to promote the application of hydrogen energy in three aspects:

  1. Data Centers: promote and demonstrate applications of hydrogen fuel cells, liquid cooling, and other advanced clean technologies in edge-computing data centers.
  2. Tech Innovations: sets to establish 1-2 national-leading manufacturing centers for hydrogen energy and smart manufacturing.
  3. Green Transportation: aims at becoming the leading “demonstrative city” in China for hydrogen fuel cell vehicle and transportation

Energy Iceberg Note: Point-3 relates to the Ministry of Finance’s recent policy draft (a feedback-asking version) that promised to offer financial rewards to a selective group of cities in China to carry out fuel cell vehicle and transportation demos.

More info: China’s New Infrastructure Investment Strategy and Impacts https://energyiceberg.com/china-new-infrastructure-investment-on-energy/

Air Product to Build its First Liquid H2 Plant in China

Air Products’ Haiyang Energy Base began construction last week. The base, located at Zhejiang province’s chemical-clustered city Haiyang, will require billions of dollars’ investment, said Air Products. The scope of the energy base involves hydrogen production, separation, key H2 equipment manufacturing, as well as urban hydrogen applications.

The first phase construction includes building a liquid hydrogen plant, which is the first liquid H2 plant of the firm in China.

Energy Iceberg: So far, there are only three liquid hydrogen plants in use in China, according to public records. All of the trios were used for space rocket launches, namely Hainan Wenchang Aerospace Base, Beijing 101 and Xichang Base. The three’s total production capacity is estimated at 4 tons per day or an annual output of 1460 tons. Earlier this year, Wuhai city of Inner Mongolia also announced to kick off a liquid H2 project. https://energyiceberg.com/china-hydrogen-industry-comparison/

Dongfang Electric's Fuel Cell Generator Prototype Plans to Set off Pilot This Year

Dongfang Electric, one of China’s three electricity manufacturing powerhouses, recently revealed that the company had developed a hydrogen fuel cell generator. The system could supply power and heating at the same time.

This fuel cell generator is currently in the prototype stage and expected to be put in pilot at the Chengdu plant by the end of this year.

EV & Battery

Hubei Province Demands New Wind Power Projects to Build 10% Storage Capacity

Hubei Province has previously unleashed a policy to require all new wind projects to deploy supporting energy storage facilities. These energy storage facilities are required to cover 20% of the capacities of the wind farms. These energy storage facilities must be completed and put into operation at the same time as the wind power project to meet energy storage requirements.

Energy Iceberg Note: Hubei became another provincial government in China to set down “storage” requirements for wind and solar projects, following the footsteps of the neighboring Hunan. Battery energy storage, especially, is likely to rise from 2020 onward due to the collective shift of market dynamics. 

Beijing to Add At Least 50,000 EV Charging Piles By 2022

Beijing attempts to build no fewer than 50,000 EV charging piles and roughly 100 battery swapping stations by 2022, as part of the above-mentioned action plan of the city to develop “new infrastructures.”

Energy Iceberg Note: China’s “New Infrastructure Investment” wave is set to arrive. Beijing local government’s policy is the first of the local plan incorporating hydrogen energy in new infrastructure, setting an example. The hydrogen development might see a new political boost from the infrastructure investment movement.

Clean Energy Related

China Seen Adding New Coal Projects and Losen-up on Coal Curbs

A wave of new coal power construction is underdeveloped this year after the country quietly lifted curbs on new-builds. About 46 GW of new coal plants were under construction as of May, a recent study revealed. Another 48 GW is in the pipeline, including 22.4 GW newly planned, 11.4 GW newly approved (in the first five months 2020), and 14.7 GW recently kicked off.

The incremental installed capacity of new coal-fired power units is 1.6 times of the coal capacity put into operation last year and 2.8 times of the total approved in 2019.

About 29.9 GW of new coal power capacity was added last year, according to China Electricity Council data.

Energy Iceberg: our view on China’s changing policy priority on coal-fired power asset https://energyiceberg.com/china-power-asset-reform/

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