Our picks of China clean energy market updates from last week:
- RE: the energy regulator NEA was slammed by MEE supervisory office for not doing enough for environmental protection.
- POLICY: NDRC provided a 6-month subsidy grid-connection extension for wind projects in the Covid-hit Hubei province.
- WIND: a wind industry leader predicted that the Chinese market would only add some 30GW wind capacity in 2021 (more than half of 2020’s 70GW)
- HYDROGEN: The first municipal-level hydrogen development white paper appears. Local governments remain keen on H2 investment.
- BATTERY: CATL is moving to renewable + energy storage market; Tesla’s supercharging factory in Shanghai completed construction.
Please scroll down for the 10 updates last week.
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The central government Ecology & Environment Protection Inspection Office has issued a review on National Energy Administration’s (NEA) sustainability works. While the MEE office said the energy regulator had achieved some progress in promoting sustainable development, it issued an unusual criticism over the bureau’s work.
The review said that the energy watchdog had experienced a “deterioration of its political culture,” resulting in “severe effects” on environmental protection implementation.
The report says the NEA has insufficiently prioritized China’s transition to low-carbon energy; it criticized the bureau not doing enough to control polluters’ actions in regions where needs to improve air quality; the Office also believes that NEA has inadequately enforced environmental checks and standards.
Energy Iceberg Note: the criticism mainly focused on issues related to capping coal mining, coal-fired power and emission issues.
National Development & Reform Commission announced this week to allow a 6-month grid-connection extension for wind projects in Hubei province. Onshore projects in the province–heavily hit by Covid-19–could still secure full national subsidy if they could connect to the grid by the end of June 2021, while all other onshore wind projects that have yet to reach grid connection already become “zero-subsidy.”
Energy Iceberg: the policy is intended to be an “exception” for Hubei province, whose capital city Wuhan was hit hard by Covid-19. However, it is worth paying attention to whether future exceptions would be possible–especially for offshore projects.
Tian Qingjun, senior vice president of Envision Energy, last week spoke on the China New Energy Power Roundtable Forum 2020 and made a projection on the 2021 wind market:
- The market is expanding rapidly: Offshore wind added 70+GW new grid-connected capacity in 2020. However, the wind sector is facing severe challenges such as the growing pressure on grid connection capacity, potential quality issues due to the installation rush, and the overcapacity expansion along the manufacturing value chain.
- He mentioned that major state-owned energy enterprises have planned for 500GW of renewable energy installation during the 14th Five-Year Plan period, averaging 100+GW per year.
- However, severe price competition could lead to quality issue. Tenders of the past two months show that wind turbines’ price has dipped to about ¥2,700/kW.
- In 2021, new wind grid-connected capacity could drop significantly to just 30GW. It would be the last year of offshore wind power explosion in installation, with an estimated additional capacity of 3-5GW.
Last week, China’s largest offshore oil and gas developer, China National Offshore Oil Corp (CNOOC), confirmed that its second offshore wind power project had entered the early development stage.
CNOOC in April 2020 won a development license for its second offshore wind power project in Shantou city’s waters of Guangdong Province. The project is 1GW.
Energy Iceberg Note: The previous owner of the project was Shanghai Electric Wind Power who won the right to develop eight 1GW projects in Guangdong. At present, CNOOC and Shanghai Electric cooperate in offshore wind power development in Guangdong and Guangxi provinces.
NEA recently released the official data of renewable energy development in 2020. Statistics have shown that:
- Clean Power: As of the end of 2020, installed clean power capacity (including hydropower) has reached 934 GW, up around 17.5% YoY. This figure consisted of 370 GW (including 31.49 GW of pumped storage) hydropower units, 281GW wind turbines, 253GW of solar PV capacity, and 29.52GW biomass power.
- Wind Capacity: Incremental wind capacity in 2020 was 71.67GW (including 68.61GW onshore and 3.06GW offshore). By the end of 2020, the cumulative installed wind capacity has reached 281GW (including 271GW onshore and 9GW offshore).
- Wind Utilization & Curtailment: In 2020, the average utilization hours of wind power across the country were 2097 hours; curtailed wind power generation was about 16.6 TWh, meaning an average utilization rate of 97% (+1%).
Hydrogen Storage & Fuel Cells
Last week, the provincial government of Zhejiang released its 14th Five-Year Plan (FYP) on a press conference. Local officials suggested that by 2025, the proportion of non-fossil energy in Zhejiang Province will increase from 20% to 24%.
According to the 14th FYP, the province would:
- Accelerate the application of hydrogen energy.
- Explore the development of fuel cell generation equipment.
- Promote the application of fuel cell cogeneration systems on the user side.
- Promote the application of hydrogen fuel cell vehicles (FCEVs) in urban public transport, port logistics and other fields.
- Promote more than 1,000 FCEVs by 2025.
Suzhou city of Jiangsu launched China’s first municipal-level hydrogen white paper. The policy sets clear the following targets:
- By 2025, the city would promote 3000 FCEVs, build 20 hydrogen refuelling stations, cultivate five enterprises; and the annual output value of the entire fuel cell industry chain would exceed ¥30 bn.
- By 2035, the city would build 70 hydrogen refuelling stations, cultivate ten enterprises with international competitiveness; and the annual output value of the entire fuel cell industry chain would exceed ¥100 bn.
Besides, the province planned to create core industrial zones around Zhangjiagang and Changshu, with Suzhou as a highland for hydrogen and fuel cell industries with global influence.
China’s Ministry of Science and Technology (MOST) recently released the sci-tech innovation guidelines for the 14th FYP period (feedback invitation draft).
The guidelines suggested that in 2021 the country will focus on hydrogen energy technology development relating to:
- Hydrogen energy green production and large-scale transformation system.
- Hydrogen energy storage and speedy transportation and distribution system
- High-efficiency hydrogen gas quality-enhancing technology
- Gas production materials and processing R&Ds for solar/wind power-to-gas projects
- Key materials R&Ds for low-cost PEM electrolysis equipment
- Methanol production by adding electrolysis hydrogen to CO2
EV & Battery
China’s power battery giant, Contemporary Amperex Technology (CATL), last week announced to inject more capital into its subsidiary Fujian Yongfu Electric Technology Development. Together with its shareholder Fujian Yongfu Power Engineering, CATL intends to engage in new businesses in the field of photovoltaic and other new energy storage.
Tesla’s ¥42 million, (6.4 million USD) Shanghai Supercharger production plant has gone online, the company announced.
Tesla planned to invest ¥42 million, (6.4 million USD) into the new factory. The company wrote:“In the whole year of 2020, Tesla has built more than 410 Tesla Supercharging stations in mainland China, including more than 180 Tesla V3 Supercharging stations. In the future, with the production of Supercharging piles in China, it will not only accelerate the popularization of V3 Supercharging piles in China but also contribute to the development of new infrastructure of charging piles in China.”
Energy Iceberg Note: initial production capacity of the facility is 10,000 charger per year.