Our picks of China clean energy market updates from last week:
- Top Policy: the State Council announced an 18% emission reduction target for 14th FYP; energy regulators unleashed a policy clarifying priorities amid China’s heated “power-storage hybrid” construction hype
- WIND: Goldwind, Envision Energy, and Ming Yang Smart Energy continue their leading position in the Chinese wind market–albeit their total share dropped in 2020, according to BNEF
- HYDROGEN: China’s largest renewable power-to-gas project (solar-based) enters the operational stage
- Corporate: Cnooc faces delisting from NYSE; China Resouces expresses interests in offshore wind and power-to-gas; SPIC continues bold investment in the hydrogen market
Please scroll down for the 9 updates from last week.
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Premier Li Keqiang last week announced that the country would reduce carbon emissions per unit of economic output by 18% over the next five years at the National People’s Congress’s annual meeting.
The meeting is China’s highest-profile political event of the year, where the country unveils new policies and legislation.
The 18% target is the same as in the previous five-year economic plan (13th FYP, 2015-2020). China uses carbon emissions per unit of economic output, or carbon intensity, instead of absolute emission reduction targets.
China has achieved the carbon emission intensity binding target of the 13th FYP ahead of schedule at the end of 2019. At that time, China’s carbon emission intensity reached 18.2%, which is lower than that in 2015 and 48.1% lower than that in 2005. It also realized ahead of schedule the international commitment to reduce its carbon emission intensity by 40% to 45% compared with 2005.
BloombergNEF released data on the Chinese wind turbine markets which showed that China added 57.8GW of new wind farms in 2020–doubled that of 2019. Notably, onshore wind added 53.8GW, up 105% YoY; while offshore wind added 4GW, increased 47% YoY.
Regarding the wind turbine OEMs, BloombergNEF data revealed that:
- The 1st to 3rd placers stay the same as that of the previous years: Goldwind, Envision Energy, and Ming Yang Smart.
- Shanghai Electric surged fast to 4th place with its advantage in the offshore wind sector. Zhejiang Windey ranked fifth as the only OEM among the top-five without offshore product.
- The installations of CRRC Wind Power and Sany Heavy Energy soared significantly and leapt to sixth and seventh places, respectively.
- The new hoisting capacity of foreign turbine OEMs in China has more than doubled YoY. Notably, GE (1GW), Vestas (1GW) and Siemens Gamesa (0.4GW) together accounted for 4% of the total lifting capacity in the Chinese market in 2020.
Energy Iceberg: check out our historical review of China’s top-10 wind turbine makers from 2015-2019
China’s energy regulators National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) last week unleashed a critical policy guideline on the energy storage sector.
The guideline provides future direction of China’s power+battery storage energy construction hype:
- For wind/solar + Battery Projects: research the “necessity” of such projects; focused on promoting price competitiveness of new projects
- For wind/solar/Hydro + Battery Projects: + for new projects, “strictly control small hydro construction”…the priorities should be on large hydro projects
- For wind/solar/Coal + Battery Projects: “strictly cap” incremental project construction; “renewable” should account for not less than 50% of such project’s grid connection”
Energy Iceberg: the guideline is a must in recent hybrid generation construction “great leap forward”–especially due to the revamp of coal fired construction in the name of “hybrid” construction. Our review of the hybrid construction hype: https://energyiceberg.com/china-renewable-hybrid-hype/
China Resources (Huarun) and the Caofedian District of Tangshan City (Hebei Province) recently signed an agreement to construct a clean energy industry cluster project with a total investment of approximately ¥39.3bn.
According to the agreement, Huarun would invest in the following projects in the harbour city:
- photovoltaic power generation
- hydrogen production (hydrogen production by methanol cracking and power-to-gas)
- floating offshore wind power
- offshore wind aquaculture hybrids
- CCUS and seawater desalination
Energy Iceberg Note: Huarun has been a player focused on coal-fired power asset investment in the past. This deal signals the firm’s recent shift towards the new energy economy.
Hydrogen Storage & Fuel Cells
China Securities Regulatory Commission announced to approve the initial public offering (IPO) plan of Shanghai Re-Fire Technology (Re-Fire), a leading supplier of hydrogen fuel cell technology.
The prospectus revealed that:
- The Company aims to raise about ¥2017.3mn through the IPO. The funding raised will be used for fuel cell stack projects (¥599mn), high-power fuel cell system research and development projects (¥669mn), and as new working capital (¥750mn).
- As of the first three quarters of last year, the company has not yet achieved profitability, and losses have increased year after year. In 2017-2019 and January-September 2020, it lost ¥33mn, ¥99mn, ¥244mn, and ¥158mn, respectively.
Re-Fire was established in September 2015, focusing on the R&D and production of fuel cell technology. Sinopec is the company’s second-largest shareholder, holding 17.93% of its shares. The company has now developed Caven series and Prisma mirror star series fuel cell systems, covering light, medium and heavy fuel cell vehicle application scenarios.
Ningxia Baofeng Energy Group (Baofeng Energy) announced its 10×1000Nm³/h solar-to-gas project has completed construction and begins production.
The project, located in northwestern Ningxia province, is the largest integrated renewables-to-H2 project in China. Based on alkaline electrolyze, the project expects an annual production capacity of 160m cubic meters (with 80m m3 oxygen production capacity).
The H2 produced by this project would be used, in part, as feedstock for the firm’s methanol production, and in part, supply to Ningxia’s future FCEV projects.
Energy Iceberg Note: our previous review on the renewable-to-H2 projects in China https://energyiceberg.com/china-hydrogen-market-2019/
CIMC Enric Holdings (CIMC Enric), announced that CIMC Hydrogen Energy, a wholly-owned subsidiary of the Company, has entered into joint venture agreements with Hexagon Purus HK to provide safe, lightweight and cost-efficient compressed hydrogen storage and distribution solutions to meet the fast-growing market in China and South Asia.
State-backed power generator State Power Investment Corporation (SPIC) recently announced plans to push forward the company’s green transportation system development.
Specifically, the company targets to:
- By 2021: Introduce at least 500 units of fuel cells.
- Around 2025: its FCEVs business fully entering into the commercialization stage
Cnooc, China’s largest offshore oil producer, faces New York Stock Exchange proceedings to delist its American depositary shares under an executive order signed by then-President Donald Trump in November.