China Clean Energy Syndicate [24Feb-01Mar, 2020]

It was a solid seven days last week in terms of progress in China’s wind, solar, fuel cell, and electric cell sectors.

As always, below are the highlights of China’s clean energy market last week. But please scroll down for the full updates of 14 news stories or data.

  • EV&BATTERY: CALT announced a record-breaking ¥30bn fundraising plan for production expansion; regional EV subsidy is back–at Guangzhou at least
  • WIND: NEA’s data tells only 1.98GW offshore wind in operation by the end of 2019; CTG resume all its offshore wind projects amid coronavirus outbreak
  • HYDROGEN: Re-fire hold hand with Sinopec to develop Shanghai hydrogen ecosystem; CNOOC to build its first fueling station
  • SOLAR: Longji acquired the Vietnamese production capacity of Yize

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Wind

Envision Tops Wind Turbine Manufacturers by Installations Overseas in 2019

Two Chinese wind turbine OEMs have achieved 0.6GW turbine installed overseas in 2019. Envision Energy ranked first with 0.36GW turbine installed overseas, following by 2nd placer Goldwind of 0.24GW, according to BloombergNEF’s recent report. The figures reflect turbine installed and included those have not yet started operation.

The international results account for only 7% and 3% of of Envision and Goldwind’s total installations in 2019, respectively. Envision’s turbines have been erected in France, Mexico, and Argentina.

Energy Iceberg Note: Chinese turbine OEMs has yet to achieve major success in the international market. The 2019 result is better than that of 2018–only 274MW exported. But only two OEMs have export record, compared to 4 in 2018.

Goldwind lost its first place to Envision for international export, although registering a similar result compared to 2018. Envision eight-folded its export figure, overtaking its rival.

DATA: 23.7GW Onshore Wind and Only 1.98GW Offshore Wind in Operation by 2019, According to NEA
DATA: 23.7GW Onshore Wind and Only 1.98GW Offshore Wind in Operation by 2019, According to NEAnews.bjx.com.cn

NEA released 2019 China’s wind power performance report, which disclosed the following information:

  1. 2019 incremental grid-connected wind capacity: 25,740 MW
  2. Of the total incremental wind capacity, onshore wind represents 23,760MW and offshore 1,980 MW
  3. Cumulative installed capacity nationwide reached 210 GW
  4. Of the total cumulative capacity, onshore is 204 GW and offshore sector registered 5.93GW
  5. Wind power generation amounted to 40.57 TWh, exceeding 40 TWh for the first time, accounting for 5.5% of the total power mix
  6. The national average wind turbine utilization hours were 2082 hours. Regions with higher average wind power production time were Yunnan, Fujian, Sichuan, Guangxi, and Heilongjiang.
  7. Total wind power curtailed (wasted) was 1.69 TWh, reduced 1 TWh from the previous year. The average wind curtailment rate was 4%, down 3 % YoY.

Energy Iceberg Note: NEA data is very different from the statistics of BNEF. The latter recorded 28.9GW as incremental wind capacity in 2019, of which 26.2GW from onshore and 2.7GW from offshore sectors.

But BNEF’s data is about turbine installation amount, collecting from OEMs whereas NEA’s numbers reflect turbines in operation, based on reports from the power developers.

Fujian Revealed 13 Offshore Wind Projects Under Construction in 2020

Fujian government revealed its 2020 plan to develop 1567 projects of highest importance last week, of which include 13 offshore wind power projects identified as “under construction” in 2020 and 4 will be “preparing” for construction.

The 13 offshore wind projects to be built this year are:

  • Fuqing Haitan Offshore Wind Project
  • China Three Gorges Zhangpu Liuao Zone D
  • Fuqing Xinghua Bay Project (Phase 2)
  • China Three Gorges Changle Outer Sea Zone A
  • Putian Pinghai Bay Offshore Wind Phase 3
  • Putian Pinghai Bay Offshore Wind Phase 2
  • Changle Outter Sea Offshore Wind Park Zone C
  • Putian Pinghai Bay Zone F (plus 220KV transmission project)
  • Putian Shicheng Offshore Wind Project
  • Putian Nanri Island Offshore Wind Phase 1
  • Pingtan Dalian Offshore Wind
  • Pingtan Changjiangao Offshore Wind
  • Datang Offshore Substation Project

The four in preparation stage are:Zhangpu Liuao Zong E; Zhangpu Liuao Zong F Phase 1; Ningde Xiapu Offshore Wind Zone B; Ningde Xiapu Offshore Wind Zone A

CTG to Start Works of Asia's biggest offshore wind build in $8bn coronavirus 'mobilisation

China Three Gorges (CTG) ordered the start of work on 25 renewable energy projects that include beginning Asia’s largest offshore wind build in an $8.3bn bid to jump-start a supply chain stalled by coronavirus. The 25 projects will need total investments of 58bn yuan and will employ 17,000 people during their construction, said CTG. They include two offshore wind’ super projects’ of 1.4GW and 800MW.

Energy Iceberg Note: CTG is the first among Chinese power developers to announce the resumption of offshore project construction amid concerns of coronavirus spreading. But many companies have claimed “work resumption” in different degree. But the de facto speed or effect of such resumption remains to be seen. 

Solar

Longi Solar Acquired Ningbo Yize for All of its 10GW Vietnamese Production Capacity

China’s leading solar producer Longi Solar has signed a framework agreement to acquire 100% of Ningbo Yize for ¥1.78 bn in cash, according to company filing last week.

Ningbo Yize is a solar manufacturer with 7 GW module production capacity and 3 GW of solar cell capacity in Vietnam. It operates there under the brand names Vina Solar Technology and Vina Cell Technology. As of September 2019, Yize had a total asset worth of ¥3.1 bn.

Previously, two other solar players, Akcome Science and East Group, both approached the Yize for potential acquisition, with some initial deals agreed. But both dropped out of the negotiation for the purchase.

Longji currently ranked first among all Chinese solar firms for its market value. Since last year, the firm has rapidly expanded. In the past two months, series of investment and sales deals were inked including an investment to build 10GW monocrystalline silicon wafer facility in Chuxiong, Yunnan, and a sale deal with Tongwei Solar of ¥13bn.

Longji is expected to reach 65GW silicon rod/wafer production capacity by the end of 2020, and 20GW solar cell and 30GW module capacity by 2021.

Renewable in Belt&Road Initiative (BRI) in Five Years: 387 Projects of Over 30GW Capacity Build Abroad by the Chinese

A report of China Chamber of Commerce for Im-Export of Machinery & Electronic Products (CCCMB) recently summarized the “Belt and Road Initiative” result of the Chinese power sector during 2014-2019:

  • In total 1968 power projects signed off, of $250bn total worth
  • Asia is the biggest market for BRI power projects, in which Bangladesh, Pakistan, Indonesia, and Vietnam are the four top destinations for projects
  • Thermal (coal) power projects remain the mainstream of the BRI power portfolio, of 393 projects ($117bn, 130GW installed capacity)
  • 387 of these projects are renewable (wind, solar, biomass), with 30GW installed capacity and a total value of $37.2bn.

Hydrogen Storage & Fuel Cells

CNOOC Announced to Build its First Hydrogen Fueling Station in China

China National Offshore Oil Corp (Cnooc) plans to build a hydrogen fueling station at Foshan, Guangdong province, according to a EPC tender release. The station is of fueling capacity 1000 kg/day, equipped with 2 fuelers and 3 hydrogen tanks.

Energy Iceberg Note: by now all three Chinese national oil companies (NOCs) have hydrogen fueling projects in China. Sinopec is still leading and ahead of the the other two CNPC and CNOOC.

Interest in fueling stations continues in China. Please check out our review of China’s fueling station market in 2019: https://energyiceberg.com/hydrogen-fueling-2019/

Re-Fire to Cooperate with Sinopec and QingCheng, Seeking to Become a Full Solution Provider
Re-Fire to Cooperate with Sinopec and QingCheng, Seeking to Become a Full Solution Providermp.weixin.qq.com

Re-Fire, Qingcheng IoT, and Sinopec Hydrogen inked a cooperation agreement last week in Tokyo to explore and establish a hydrogen ecosystem (with different hydrogen industrial applications) in Yangtze River Delta, with Shanghai the development base.

In this cooperation, Re-fire provides FCVs and its fuel cell systems. At the same time, Qingcheng will manage the FCVs in different industrial applications (inc. FCVs for inter-city logistics, as well as FCV trucks for long-distance transportation). Sinopec will develop plans for the fueling solution.

Energy Iceberg Note: Re-fire is seeking to become a full FCV solution provider, instead of just a system supplier

Horizon, GOLDI Mobility and Hy-Hybrid Energy Move Forward with GOLDiON Project

China’s fuel cell producer Horizon Fuel Cell Technologies (Horizon) is in talks to take part in an FCV bus project in Hungary.

Last week, Horizon met with GOLDI Mobility Kft (GOLDI) and Hy-Hybrid Energy (Hy-Hybrid) in Hungary to discuss the Chinese fuel cell supplier’s role in phase 2 and 3 of the GOLDiON project which sets to build up FCV bus manufacturing lines in Hungary.

GOLDI has previously announced their plans for fuel cell bus deployments in Europe by executing:

  1. Prototype Phase-1: First 18 m prototype fuel cell bus deployment in Hungary
  2. Roll-Out Phase-2: Procurement of multiple fuel cell drivetrains and assembly of 12m and 18m fuel cell buses in Hungary for roll-out to EU
  3. Drive Train Assembly Phase-3: Local assembly of fuel cell drivetrains in Hungary to significantly reduce the cost of 12m and 18m fuel cell buses to be deployed across the EU.

Energy Iceberg Note: learn more about China’s FCV producers’ performance and the 2019 market https://energyiceberg.com/china-hydrogen-market-2019/

EV & Battery

CATL Plans to Raise a Record-Breaking ¥30 bn for Production Expansion
CATL Plans to Raise a Record-Breaking ¥30 bn for Production Expansion static.cninfo.com.cn

China’s top EV cell maker Contemporary Amperex Technology Limited (CATL), revealed in China A-share to raise ¥20 bn funding via private placement for four lithium-ion battery projects. Meanwhile, the firm plans to raise an extra ¥10 bn through other channels by itself.

The new funding is said to use for production capacity expansion mainly. Of the ¥20 bn raised from the private placement, ¥12.5 bn will be used to build three projects totalling 52GWh capacity in three projects, and ¥2 bn will be spent on R&D. 

Separately, by self-funding the firm aims to invest in Ningde Cheliwan project with a total design capacity of about 45GWh.

The fundraising marks a new record as the most significant investment case for lithium-ion projects, with Zhongtian Technology a former record holder which raised ¥1.578bn.

More than a quarter of the funding from the private placement, or ¥5.5 bn, is meant to support working capital. Notably, CATL appears to have a sounded cash reserve, with some ¥30bn cash in its balance (but meanwhile ¥28bn account payable and about ¥1bn account receivable.)

Energy Icebergy Note: In 2019, China’s battery cells production reached 3.8GWh, of which only 0.7GWh was for the domestic market and the rest for international clients. 

CATL’s record-breaking production expansion plan would bring profound impacts on China’s battery and energy storage industries. It is estimated that the total production capacity of CATL will arrive some 240GWh by 2023, four-fold the current size. The firm’s expansion also means a similar process of China’s supply chain in the area.

Policy: Provincial Governments to Offer Subsidy to EVs Amid Coronavirus Outbreak, Backtracking from Previous Decision

Following Foshan city, another Chinese city Guangdong announced to offer the regional subsidies to electric vehicles, again.

Last week, Guangzhou government said it would provide subsidy for EV purchases to boost automobile consumption amid Coronavirus outbreak and slow-down of the auto market.

Energy Iceberg Note: Guangzhou said to shelve EV subsidy on last Sep. The new policy expression is a clear sign of backtracking from the previous policy due to economics pressure under the coronavirus outbreak. Guangzhou may see its example followed by other regions. 

Shanghai Electric Quietly Controlled a Private Battery Machinery Supplier Yinghe Tech, Aiming at German Market

Last week, state-owned manufacturer Shanghai Electric once again acquired 7.3% Yinghe Tech, a private machinery company key to China’s battery production.

Prior to the recent equity purchase, Shanghai Electric acquired a 9.73% stake of the company in November 2019. Then the Shanghai-based state-owned equipment giant increased its stake in the firm further. By the recent purchase, Shanghai Electric now controls the largest 29.69% equity of Yinghe and has become the de facto decision-maker of the private firm.

The total cost for the acquisition is estimated at ¥4.1 bn.

 Yinghe Technology is one of the few players in China’s lithium-ion battery production equipment production and R&D. It has supplied to most leading lithium-ion battery producers including LG Chem, CATL, BYD, and Guoxuan Hi-Tech.

Energy Iceberg Note: Yinghe Technology is seeking to expand its international footprint, while Shanghai Electric owns MANZ, a Germany machinery firm with products for battery cell production. Shanghai Electric would seek synergy between these two subsidiaries after the acquisition. 

Clean Energy Related

DATA: Clean Energy (Hydro, Nuclear Wind, Solar, and Biomass) Accounts for 23.4% of China's Total Energy Consumption

China’s lastest official statistics claimed that 2019 clean energy (inclusive of nature gas) represents 23.4% of the total energy consumption, up 1.3% compared to that rate in 2018.

China’s State Grid Focused on "Market Reform", Ditching the Concept of "E-IoT" from The Former Boss
China’s State Grid Focused on "Market Reform", Ditching the Concept of "E-IoT" from The Former Bossshoudian.bjx.com.cn

State Grid release its new corporate strategy last week, the No.8 Policy. The policy is attached high importance by the industry as it will show SGCC’s strategy under the chairman Mao Weiming.

The key emphasis of SGCC in the coming years, according to this policy, will be on market reform.

While the policy completely ditched the concept “E-IoT” designed by former chairman Kou Wei. It does leave space for the firm to develop smart grid applications. The statement commits to “new business” including industrial chips, IGBTs, energy storage, smart terminals, Beidou (Navigation Satellite System) and geographic information services (GIS). It also mentioned plans to invest and develop joint ventures in electric vehicles, integrated energy, and commercialization of basic resources.

Energy Iceberg Note: it is clear that SGCC is under heavy political pressure to reform (against its own interest) in China’s staggering power market reform. The new strategy comes days after SGCC’s high profile electricity bill exemption. We believe that Mao would not completely ditch Kou Wei’s smart grid development ideas, but “E-IoT” would not be SGCC’s key focus in the coming years.

For more info, please refer to our in-depth analysis on SGCC’s executive shakeup and its significant impacts on the energy sectors. https://energyiceberg.com/chinese-energy-companies-executive-changes/

SGCC’s E-IOT strategy analysis: https://energyiceberg.com/chinese-grids-transformation-to-benefit-digital-tech-companies-globally/

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