Below we selected for you the most relevant updates of the Chinese clean energy market that you may be interested to know.
We want to point out a few highlights of the past week:
- WIND: onshore turbine maker Windey announced to set foot in offshore; China urgently need offshore wind construction vessels
- Battery: GCL-SI looks to develop new business in battery storage for 5G network; State-Grid and CATL set up a joint venture also looking into the BES market
- HYDROGEN: zero FCV was produced or sold in China in Feb
- Other Energy: China successfully extract natural gas from methane hydrate in the South China Sea, again
Scroll down for our translation of 14 news update. I hope the news could bring you some inspiration for the coming week.
Energy Iceberg is looking to improve and develop. I truly appreciate all the response from you. If you have more to share or want to have a short chat over one particular matter, feel free to book a call with me: https://calendly.com/energyiceberg/30min
You are receiving this email as a subscriber of Energy Iceberg. As a routine, you will find two emails from us per week:
On Monday we deliver a “syndicate” of major news updates regarding the Chinese clean energy market; You could also find the previous syndicates here: https://energyiceberg.com/category/syndicate/
On Wednesday there is a weekly Energy Iceberg analytical article with topics covering wind, EV cells, fuel cells, solar or Chinese power policy. Our archive of analysis is here: https://energyiceberg.com/tip-of-the-iceberg/
By a broader-topic syndicate and an in-depth analysis, we hope to keep you inform and stay ahead from others in terms of understanding the Chinese clean energy market.
China’s leading wind turbine manufacturer Zhejiang Windey Co. (Windey) revealed in a presentation that the company had developed a prototype of a 5MW offshore wind turbine targeting China’s offshore wind market. The prototype undergoing testing show stable performance and already secured certification. Windey said that it would now look into the offshore wind market and technology development.
Energy Iceberg Note: This statement marks Windey entering into the offshore wind power battleground in China, where only a handful of players exist right now. Founded in 2001, Windey the Hangzhou-headquartered OEM is an “old stager” in China’s wind sector. In 2019, Windey for the first time surged into the top-five wind OEMs club in China with an incremental (onshore) installed capacity of 2.06GW.
We have mentioned that, in terms of annual turbine capacity, the firm has climbed from ninth place in 2015 to fourth last year among the Chinese OEMs. The firm also announced the highest profit growth last year among peers.
GWEC has published the 15th edition of its flagship Global Wind Report, which finds that 60.4 GW of wind energy capacity was installed globally in 2019. China and the US remain the world’s largest onshore wind markets, together accounting for more than 60 per cent of new capacity in 2019.
Energy Iceberg Note: check out our summary of different statistics of GWEC, NEA, and BNEF.
- 2019 China’s installed onshore wind capacity23.76 GW, largest in Asia and in the world
- 2019 China put up 2.395GW offshore wind turbines. The country becomes the largest offshore wind builder in the world. The Chinese market contributed roughly 39% of the new global offshore wind installation last year.
China adds only 990MW wind turbines in Jan and Feb this year, decrease by 29.8% compared to the installation in 2019 Jan-Feb.
China’s first 1200-ton jack-up wind power installation platform “Zhenjiang” completed its first mission of turbine hoisting last week. The “Zhenjiang” platform first project is the Shengdong Rudong 400MW Offshore Wind Power Project (Bid Section II), which is contracted by CCCC Third Navigation Engineering Bureau. “Zhenjiang” started construction in Mar. 2018, with a maximum operating water depth of 50 meters. The vessel can accommodate three sets of 6MW or two sets of 8MW turbine blades.
Energy Iceberg Note: China’s heated and stressful offshore wind construction now faces a major bottleneck–a lack of construction and engineering vessels. Energy Iceberg recently understands that at least a dozen of construction vessels are urgently needed, and the industry is seeking European vessel suppliers for help.
For more information on China’s offshore wind construction shortage, check out our previous review https://energyiceberg.com/offshore-wind-construction-market/
China’s southern province Hunan recently announced the provincial renewable construction plan for 2020. The plan revealed and commented that the wind curtailment (wind power waste) rate of the whole province soared high. As a result, the province labelled 14 municipalities as “red” regions which mean no new wind investment is allowed. Some regions are marked as “orange” which mean they could still carry out the construction of projects previously approved. Notably, there are no “green” zooms (regions that could start new investment) allowed for wind. That means Hunan will, basically, suspend new wind construction this year.
Energy Iceberg Note: Hunan’s case would be only one of the provinces slowing down wind development. Several mid-and-southern Chinese provinces would face a similar issue of tightening environmental requirement and land uses, leaving little room for new wind projects. Meanwhile, a slow down of economic development will undoubtedly lead to higher wind curtailment. And offshore wind faces a bottleneck of construction capacity and reducing the subsidy. Overall the whole wind market in China appears to face a tough period.
China National Petroleum Corp (CNPC), the largest national oil company in China, pledged to adopt renewable and energy storage in the firm’s portfolio for the first time.
In its shareholder meeting, company chairman Dai Houliang said CNPC will shift focus to green and low-carbon development in 2020 and will accelerate research to invest into new energy business layout. He mentioned the NOC would begin to invest in solar, wind, hydrogen, biomass and geothermal energies in a bid to an energy transition.
Energy Iceberg Note: this is the first time CNPC–on a group level–expressing the intention to shake up its energy business portfolio. One could argue whether the decision is a bit too late, as peers CNOOC and Sinopec have already invested in offshore wind, hydrogen storage, and geothermal for some time.
- Solar incremental installation in Jan-Feb: 1.07GW, down 69.2% YoY
- Solar PV module export volume in Feb: 2.83GW, down 21.41% YoY
GCL System Integration Technology (GCL-SI), a member of ‘Solar Module Super League’ (SMSL) member, disclosed that the company’s production and operations in the first quarter had suffered dramatically from the COVID-19 outbreak. If the situation in Europe continues, the firm said, overseas demand would further decline and threaten the firm’s profitability this year.
However, amid crisis, GCL-SI announced several investment plans:
- the firm is in negotiation to build in China a 2.5GW integrated shingled solar cell module assembly plant
- it signed a cooperation intention with Beijing National Battery Technology Co. (National Battery), to jointly set up a company Jiangsu GCL Cloud Storage Technology Co. The JV will be incorporated with a registered capital of ¥200 mn, in which GCL-SI will own 55%.
The JV targets the rising battery storage demand amid China’s 5G network development. Already, GCL-SI is developing a 100,000-ton cathode material factory in Xuzhou, Jiangsu Province. The JV will combine GCL-SI’s cathode material production as well as Naitonal Battery’s flexible packaging iron-lithium battery manufacturing capability. The two hope to provide full life-cycle electricity management for 5G networks.
Hydrogen Storage & Fuel Cells
During January-February, about 54,000 new energy vehicles were produced, and 60,000 units were sold, down 63.8% and 59.5% year on year, China Association of Automobile Manufacturers (CAAM) data shows.
- New-energy vehicle production Jan-Feb: 38,946 electric vehicles(EVs, -64.4% YoY), 14,749 plug-in hybrid electric vehicles(PHEVs, -62.5% YoY), and 145FCVs
- New-energy vehicle sales Jan-Feb: 44,557 EVs (-60.7%) and 14,977 PHEVs (-55.7%), and 171 FCVs
- Notably, no FCVs produced and sold in Feb
Energy Iceberg Note: FCV development in China is still largely related to government policy and government tender. The production momentum last year is unsustainable if without national subsidy, which is yet to be clear at this moment.
The world’s first fuel cell heavy passenger car transporter started a road test in the Dalian Free Trade Zone. It is reported that this fuel cell heavy passenger car transporter was developed by Wuyuan Technology (Dalian) Co. (Wuyuan) together with Xinyuan Power Co. (Xinyuan Power) and Dongfeng Motor.
Technical specs of the vehicle:
- 36 tons full-load in weight
- over 450 km cruising range
- uses HYMOD series stack module of Xinyuan Power and FCU, VCU and HCU from Wuyuan
- 90KW rated power of the system
- the fuel cell stake is of 110 kW power capacity
- hydrogen consumption per 100 km ranges from 8-10 kg
EV & Battery
Contemporary Amperex Technology (CATL) and State Grid Integrated Energy Service Group Co., a wholly-owned subsidiary of State Grid, established a Xinjiang-based joint venture recently. The JV is set to be a battery storage developer.
The joint venture, with a registered capital of ¥30 mn, is owned 60% and 40% by State Grid subsidiary and CATL. The equity structure suggests that State Grid is the majority owner and the primary decision-maker of the JV.
Energy Iceberg Note: State Grid’s new corporate strategy emphasized on investment into the “New Infrastructure” sectors including ultra-high voltage transmission grid as well as 5G network. The JV marks the clear ambition of the two firms to lead battery energy storage (BES) development. We believe the JV’s primary interest now is to develop BES plant for the solar and wind projects in Xinjiang province.
CATL is known for its role in the battery for the automotive sector, but the firm has taken several steps in the past year to develop storage batteries.
Major battery production firms in China have gradually resumed work since mid-March. And replenishing inventory has become the main bottleneck. Market consultancy ICC-Sino expects 70%-80% of the anode and cathode materials producers would resume work soon.
It is estimated that:
- China ’s lithium battery anode production will be 28,100 tons in March, up 65.6% from the previous month wheres.
- Cathode materials production will be 24,600 tons, up 81.15%
- NiCoMn materials production is estimated to reach 9,800 ton, up 30.52%
- Lithium iron phosphate production will be 8,900
- Lithium-ion manganese oxide will be 6,000
- Lithium cobaltate will be 3,500
Clean Energy Related
China extracted 861,400 cubic metres of methane hydrate, a solid form natural gas (CH-4) also known as “flammable ice”, during a one-month trial production in the South China Sea, said by the Ministry of Land and Resources (MoLR). The gas production was carried out in Shenhu waterway in the South China Sea, with an operating water depth of about 1,225 metres.
This production followed China’s first experimental methane hydrate production in 2017. The MoLR said this second test marks China’s flammable ice exploration and production has moved to “trial production” from “experimental production” stage.
Energy Iceberg: China has a significant portion of the globe’s methane hydrate reserve. However, safety issues and environmental impacts of the extraction remain two major challenges.