Momentum for offshore wind development seems to continue, although we have stepped into the zero-subsidy era. The annual Offshore Wind Summit and Guangxi’s ambitious wind development plan (18GW) are undoubtedly the highlights of last week.
Other noteworthy updates of China’s clean energy market in our view:
- Net Zero Investment: Beijing released the Circular Economy 14th Five-Year Plan (14th FYP); recycling of photovoltaic and power batteries are heavily under-invest.
- Wind: NEA official said the “far and deep sea” (floating) offshore wind demos are the emphasis, while Guangxi Province unleashes +8GW OW projects
- Hydrogen: a review of China’s refuelling station figure suggest that the country is just a step away from being at the global top. In June, the FCV sale record finally bounced.
- Energy Storage: China’s first 10 GW renewable+storage project kicks off; China Huaneng said it would focus on, among others–CCUS.
Scroll down to check out the 9 updates that we considered noteworthy last week.
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Net Zero Investment
China’s top economic planner, the National Development and Reform Commission (NDRC), released the 14th Five-Year Plan (2021-2025) for Circular Economy Development last week.
The plan pointed out four main challenges for China to strengthen the circular economy:
- Energy and water consumptions are significantly higher than the world average.
- The recycling of commodity metals such as copper, aluminium, and lead is still dominated by low-end resource utilization.
- New waste products–including power batteries and photovoltaic modules— has increased significantly, which is a major challenge to recycle, dismantle and dispose of.
- The rare metal sorting is insufficient, and the quality and cost of recycling can hardly meet the key material requirements of emerging industries.
The 14th FYP listed 11 priorities in the next five years. Energy-related measures include:
- Promote recycling development of industrial parks.
- Promote demonstration projects for comprehensive utilization of solid commodity waste.
- Promote the recycling of used power batteries.
Energy Iceberg Comment: The emphasis of industrial parks circular economy development would support recycling industry by-product gas (CH4, H2, and others). The plan also emphasized recycled EV battery storage, which will serve in the energy storage sector. Nevertheless, the underlining issue of all of these measures is the lack of business cases. Whether Beijing could provide execution plans or economic incentives for the circular economy will be critical for the plan’s success.
A report from Chinese media Huaxia points out the gap between the mounting PV waste and the insufficient recycling.
By the end of 2020, China’s cumulative waste of photovoltaic modules has exceeded 2GW.
That number is expected to soar at a fast pace. IEA predicted that by 2030, global scrapped photovoltaic modules would reach 8 million tons, of which 1.5mt are from China (or 60GW).
In 2035, China would have at least 70GW of modules to be recycled.
Nevertheless, in China, the recycling of waste photovoltaic modules is still in its infancy. Among the many problems, the most fundamental challenge is the lack of business models and the high cost of recycling.
In March 2021, China issued a policy on the process and technical standards for the recycling of waste photovoltaic modules. The policy would be implemented in February 2022. However, except for that policy, there is very limited policy support for the industry.
The State Council executive meeting has approved the trading set up and aims to unleash online emission trading this month. “The next step” of China’s carbon trading market is to expand coverage to different industries.
China will promote high-quality offshore wind development during the 14th FYP period in an orderly and safe manner, with top-level design, and driven by demonstration leadership and innovation, as NEA official Wang Dapeng stated at the 2021 Global Offshore Wind Summit.
Regarding offshore wind development, China will focus on:
- the construction of major offshore wind power complexes
- the development of national deep-and-far sea demos
- the construction of offshore energy islands
Energy Iceberg’s Note:
Currently, China’s offshore wind power is mainly carried out in the near sea area. The far sea (>50km) and deep-sea (>50m) waters have not yet been developed. The deep sea is considered to have more abundant wind resources and will be the main space for the development of offshore wind power in the future. Floating offshore wind has a major opportunity once China’s offshore wind moves to deeper waters.
There are currently 4-5 floating demonstration projects in China, three of which are likely to be completed in the 14th FYP.Energy Iceberg’s Note: Read more f our analysis on China’s floating offshore wind development.
Guangxi province aims to ramp up its offshore wind portfolio aggresively.
During the 2021 Global Offshore Wind Summit, director of the Energy Bureau of Guangxi Zhuang Autonomous Region Nong Bing unveil Guangxi’s plan regarding OW and renewable:
- Offhsore Wind: Gungxi has 23.5GW offshore wind projects resources ready to start”in the near term”; The province strives to approve 8 GW and put 3 GW into operaton by the end of 2025.
- Onshore Wind & PV: it has 50+GW of onshore wind and 20+GW of photovoltaic power space for development. The current scale of production has not reached 20% and 10% of the developable volume. In 14th FYP, the province eyes on adding 15GW and 10+GW onshore wind and PV capacities.
Energy Iceberg’s Note:
Guangxi is a “low-key” province in terms of clean energy development, in-between Yunnan (a major hydro/wind production hub) and Guangdong (a critical offshore wind market). Its neighbouring provinces outshined Guangxi’s position.
Nevertheless, Guangxi’s plan suggests 18GW additional wind capacity between 2021-2025. Currently, it has installed +6.43GW (2020 data). That means the installed capacity of the province could reach 24.43GW by the end of 2025.
If that target comes true, Guangxi will be the second-largest wind region, following Jiangsu among the southern provinces. Notably, they successfully achieved their 13th FYP target.
Hydrogen Storage & Fuel Cells
China has 146 hydrogen refuelling stations (excluding three dismantled ones) by the end of June this year, of which 136 have been operational, ten has finished construction and ready to launch. The commissioning ratio has reached over 93%, according to the statistics of Chinese hydrogen media Xiangchenghui.
By that performance, China is expected to overtake Japan (147 refuelling stations as of June 2021)soon and become the world’s No.1 in hydrogen filling stations.
- Refuelling stations construction accelerates after Shandong launched the “Hydrogen Society” demo project.
- Several hydrogen refuelling stations near Zhangjiakou city took off within a short period, which is related to the Winter Olympics.
- Some cities that failed to be selected for the FCV demo programme continues to committing to hydrogen infrastructure investment.
- A key trend is to build filing facilities in existing gasoline stations or to build new hybrid stations.
Statistics from the China Association of Automobile Manufacturers (CAAM) showed that the production and sales of fuel cell vehicles (FCVs) in June were 444 and 272, respectively, up 430% times and 230% YoY.
Energy Iceberg’s Note:
Since late last year till May, the sales and productions FCVs have been in set back, due to the uncertainty of FCV demo programme. The new figure in June helped the 2021H1 number to bounce back. Nevertheless, as the demo programme is still hanging on the air, more observation on the market development requires.
Huaneng Longdong Power Base, the first 10 GW-level pilot wind-solar-energy storage-and-transportation complex in China, last week held a kick-off ceremony in Qingyang of Gansu Province.
The planned installed capacity of this power complex exceeds 10 GW, of which renewable accounts for more than 80%.
China Huaneng Group (China Huaneng) said that upon the construction of the giant project, this firm would team with players along the supply chain to carry out joint innovations. The R&Ds will focus on key technologies such as coordinated control of large-scale renewable power stations, hybrid wind-solar-energy storage, megaton CCUS, and high-efficiency photovoltaic power generation.
Energy Iceberg’s Comment:
Huaneng has always been keen on CCUS. Before any of the NOCs show interest in the area, the firm has invested in the first thermal plant CCUS project.
Just days after announcing its $2.4 billion investment in a France-based battery plant to supply Renault, Envision AESC, the battery unit of Shanghai-based green tech company Envision Group, unveiled a similar agreement that allows it to be part of Nissan’s strategy to accelerate the localization of its electric-vehicle battery manufacturing in the U.K.
Envision AESC plans to invest 450 million pounds ($622 million) in a plant that it will build in partnership with Nissan in the northeastern English city of Sunderland, according to a joint statement released Thursday.
The factory, which will be Envision AESC’s second battery plant in the city, will have an initial annual capacity of 9 gigawatt-hours (GWh), producing batteries for Nissan’s new electric vehicles, according to the statement. Envision AESC could invest an additional 1.8 billion pounds to expand the facility’s annual capacity to 25 GWh by 2030.