Several data sets and reports released by the Chinese government last week show us two things about the market:
- investment interest in the Chinese wind and solar projects remained strong, although the two markets achieved less than investors’ expectation.
- The political momentum to support fuel cell and recycled battery markets are growing stronger every week. We expect the industry/investment momentum will pick up soon.
Some of the critical updates of Chinese clean energy market last week:
RENEWABLE: China’s RE investment Q1-3 jumped over 100% YoY. Meanwhile, national oil company Sinopec invested its first wind project–a milestone.
HYDROGEN: Beijing launched the long-waited hydrogen industry development plan–the capital city is a strong competitor for the national hydrogen fuel cell subsidy and is noteworthy. Meanwhile, new business updates from SPIC (State Power Investment Corp) suggest that the firm is a potential partner for international companies eying on the Chinese market.
EV & Battery: Ministry of Industry and Information Technology (MIIT) launched the highly-expected New Energy Vehicle Technology Roadmap 2.0. The new report announced more ambitious targets regarding EVs, FCVs, as well as hybrid vehicles. The roadmap indicates Beijing’s interest to provide further political support for the EVs and FCVs sectors.
Please scroll down for ten updates of last week’s wind, solar, hydrogen, battery and the power markets.
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China Electricity Council has released 2020Q1-Q3 power market review with the following information:
- Investment in the power sector increased by 20.0% YoY, with wind, solar, and hydro investment up by 138.4%, 113.9%, and 21.0% respectively. Investment in coal power and power grids dropped.
- The incremental power capacity between Q1-Q3 was 72.24 GW, of which 17.71 GW are from solar power (+9% YoY) and 13.92GW from wind.
- Power production climbed up 0.9% YoY. Wind and solar power generation were 333 TWh and 200.1 TWh respectively, up 14.3% and 17.1% YoY. (Nuclear power increased by 6%, hydropower increased by 0.9%, coal power decreased by 0.3%)
- The average utilization hours of all power units were 2758 hours (-98h compared to 2019Q1-Q3). Among them, that of hydropower was 2894 hours (-9h), thermal power was 3047 hours (-127h), nuclear power was 5521 hours (+69h), wind power was 1549 hours (+30h), and solar power was 1009 (-1h).
Energy Iceberg’s Key Conclusions：
Wind and solar investment soared despite Covid-19. However, the installed wind and solar capacities were smaller than expected. Many of the renewable projects are moving to become zero-subsidy projects.
Yunnan Provincial Development and Reform Commission and Yunnan Energy Administration last week jointly announced the selected developers for its 8GW wind and 3GW photovoltaic projects.
The province will focus on the development of these 11GW renewable projects from 2021-2025.
List of selected developers:
- Wind developers: China Huaneng, Huadian, Datang, SPIC, CEIC, China Three Gorges (CTG), China General Nuclear (CGN), Yunnan Energy Investment Corp, and Concord New Energy.
- Photovoltaic developers: Huadian, Huaneng, China Three Gorges, Datang, Yunnan Energy Investment Corp, SPIC, State Development Investment Corp (SDIC), CGN, and China Energy Investment Corp (CEIC).
Asia Pacific’ biggest oil&gas refiner, China Petrochemical Corporation (Sinopec), has kicked off its first wind power project in China further to explore the country’s growing clean energy market.
With an installed capacity of 20MW, the distributed wind power project located in Shanxi province includes eight wind turbines.
Energy Iceberg Note: the project is tiny but definitely worth taking note of. Sinopec is investing heavily on hydrogen and also signals interest in green hydrogen production. The NOC is likely to increase investment in wind and solar.
Hydrogen Storage & Fuel Cells
Beijing government has unveiled its fuel cell development plan for the next five years. The key development targets:
-by 2023: to foster 3-5 globally leading fuel cell vehicle companies; to launch 37 refuelling stations and 3000 FCVs; total industry value reaches ¥8.7b.
-by 2025: to foster 5-10 globally leading fuel cell vehicle companies and build up 2 world-leading R&D centre; to launch another 37 refuelling stations, with 10,000 FCVs in operation; total industry value reaches ¥247b
In mid-October, the first 20kW solid oxide fuel cell (SOFC) power generation system independently developed by the National Institute of Clean-and-Low-Carbon Energy (CEIC subsidiary) passed the critical test run at the Ningxia Coal Industry Experimental Base and reached operating conditions.
The first set of SOFC system working conditions is of designed output 15kW.
SOFC is the core equipment in the Integrated Gasification Fuel Cell (IGFC) system. In July 2017, the Ministry of Science and Technology funded the CEIC IGFC project.
State Power Investment Group (SPIC) recently stated that the group would form an industry alliance to become fully independent in fuel cell production. The new industry coalition would eye on:
- Developing its independent technology and manufacturing capability in areas including catalysts, proton membranes, membrane electrodes, bipolar plates, fuel cell stack packaging, power systems and so on.
- Reaching a production capacity of 30,000 units/year by 2025 and a production capacity of 100,000 reactors/year in 2030.
Energy Iceberg Note: SPIC is a likely partner for international companies and investors.
Shanghai Electric Power, a subsidiary of the State Power Investment Corporation (SPIC), announced to invest ¥192m in Shunhua New Energy and acquire 33.8% the firm’s equity.
After the deal, SPIC will become Shunhua’s majority shareholder.
Shunhua is a leading company in China specialized in hydrogen energy solutions founded in 2004. The company’s mission is promoting hydrogen energy technologies development including fuel cell vehicle on-board hydrogen supply system, hydrogen refuelling station equipment, and hydrogen refuelling station services, etc.
NEVs & Battery
Commissioned by Ministry of Industry and Information Technology (MIIT), China Society of Automotive Engineers (SAE) last week completed and released the Energy-saving and New Energy Vehicle Technology Roadmap 2.0 report. The plan outlines the concrete goals of transforming Chinese automotive industries into a fully electrified sector by 2035.
The strategy envisions by 2035:
- Energy-saving vehicles and new energy vehicles would each take up 50% of the new automotive market.
- The amount of fuel cell vehicles (FCVs) in operation will reach 1 million. “Commercial vehicle market achieved the transition to the hydrogen fuel cell.”
Greenpeace East Asia recently published a report on the circular economy potential of new energy vehicle batteries in 2030.
The report estimated that:
- By 2030, the battery from passenger EVs globally would be retried in large-scale, with a total capacity of 463GWh. If the market could utilize the retired battery, these batteries would be able to cover the global demand for energy storage projects. The total value of the recycled battery market was estimated to reach ¥100b, about 25 times of that in 2019.
- About the Chinese Market: By 2025, about 32GWh retired batteries of EVs could be reused. The repurposed batteries are sufficient to supply backup power systems for all of China’s 5G telecom stations.
- The current number of new energy vehicles in China has reached 4.17 million. Between 2021 and 2030, the total amount of power batteries from NEVs in China would reach 705 million tons, and the cumulative decommissioning power capacity would reach 708GWh.
Clean Energy Market
Ministry of Ecology and Environment (MoEE) last week revealed that the accumulated national carbon emission trading pilots hit 406 million tons of CO2-eq greenhouse gas emissions, with a total value of ¥9.28b.
Based on statistics from 2017, the cumulative trading volume of national carbon emission trading pilots from 2018 to 2020 would approximately double, and the trading volume would increase by 106.22%.
China has launched pilot carbon trading market in seven cities/provinces including Beijing, Tianjin, Shanghai, Chongqing, Hubei, Guangdong and Shenzhen. By 2020 Aug, the market has 3,000 participants from over 20 sectors including steel, power generation and cement.