• China Cleantech Update April 07, 2016

    News Summary:

    • Grid-connected renewable energy projects now have power purchase guarantee
    • 2017 T&D grid price rules extended to all provinces
    • Urumqi CNY 180 million wind-to-heat project to be completed this year
    • NEA sets energy consumption guidance for 2016



    Renewables: Price Reform Mechanism Guarantees Sale of Renewable Energy Generation on Grid
    The NDRCissued a finalized draft on the guaranteed purchase of electricity generated from renewable energy resources. The reform policy affects both new and existing projects. The total purchase price is divided into a guaranteed minimum price and a floating market price, determined at time of purchase. Additionally, a priority purchase contract will be provided, where a feed-in tariff price will be agreed upon between the plant owner and grid company, along with the share of the price determined by the market. (SDPC CN)

    Haiyan Qin, the China Renewable Energy Society Wind branch secretary, stated that in wind resource level I areas, wind power utilization hours should reach 2180 hours annually in order to achieve 8% return on investment. 

    In our view, while the guiding legislation is an important first step, and while it does address some mechanics of compensation for curtailment, critical aspects still need to be clarified in order to effect the intended policy outcome. First and foremost, if after continued curtailment (or poor resource, or defunct equipment) utilization of a wind project is below the guaranteed level, how will the “curtailed amount” be fairly and transparently established? As far as compensation goes, the proposed reform stipulates using the “on grid tarriff.”This means that if it ever comes to a clear case where curtailment was caused because generation was prioritized instead to a low utilization thermal plant, and the plant pays, its loss is magnified as the total includes the cost of consumed coal as well as the on-grid sale tariff. But presumably the grid in this case will have been the one that made the dispatch decision in the first place. Related to this potential case however, we find it at least positive that the guiding legislation now expressedly forbids forcing renewable power generators to purchase generation rights from thermal producers as has happened in some regions. 

    Of additional concern is the stipulation that renewable enterprises shall share in costs for ancillary services. This seems to confirm that current policy thinking does not include creating a more open market for grid services and power market spot prices to ensure an efficient market for ancillary services. Given the single regional on-grid tarriff, we have seen pump storage for example operated as a cost center for the grid instead of as a profit center buying cheap power in times of high supply and low demand and selling during high demand peaks. We have seen in Europe that ancillary service costs for deepening penetration levels of renewables tend to shrink with power and T&D market liberalization and deeper regional integration. Further policy clarification on this point would do well to go much further eventually enabling renewable projects to actually earn money by providing ancillary services to the grid.

  • China Cleantech Update March 02, 2016

    News Summary:

    • State Council looking to nurture new energy automobile industry
    • Guangdong publishes notice on reforming electricity sale
    • First domestic 1.5kV PV system gets grid connection
    • Xinjiang grid investments to reach 221 billion RMB in 13th five-year plan
    • Rudong 100MW offshore windfarm connects to grid


     
    Automotive: State Council Identifies Measures to Support New Energy Automobile Industry
    The State Council is identifying new measures to support the new energy automobile industry. It has focused on five areas of innovation. 

    1. New breakthroughs in battery technologies
    2. Electric vehicle charging infrastructure
    3. Increased share of new energy vehicles in public transportation
    4. Higher quality new energy vehicles
    5. Better subsidy and support policies for purchasing new energy vehicles (Gov CN)

    The development of the new energy vehicles has the potential to be a major contributor to carbon emission reductions. Last year, 330,000 new energy vehicles were sold in China
     



     

  • Week of January 14, 2019

    News Summary: 

    • CGN Baolihua Shanwei Houhu Offshore Wind Project begins construction
    • World’s first ±1100kV UHV DC line to start operation soon
    • Henan Power Grid 100MW Battery Energy Storage Demonstration Project begins operating
    • Five State Grid pumped hydro energy storage stations start construction concurrently
    • First turbine of Datang Binhai offshore wind farm successfully connected to grid

     

     

    CGN Baolihua Shanwei Houhu Offshore Wind Project begins construction

    The project is to have a total installed capacity of 500MW with an investment of 8.4 billion CNY. The project plans to deploy 91 units of 5.5MW offshore wind turbines with annual power generation of 1.4TWh. This project aims to be operating before the end of 2021. (Shanwei News)

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    This offshore wind project is co-developed by Baolihua (000690.SZ) and CGN. For more details, please see Azure’s December 24 news publication.

     

     

    World’s first ±1100kV UHVDC linetostart operation soon

    The world’s first ±1100kV UHVDirect Currentproject, extending from Changji (Xinjiang Province) to Guquan (Anhui Province), has entered the final inspection stage.With atotal investmentof 40.7 billion CNY, the UHV line spans across six provinces (Xinjiang,Gansu,Ningxia, Shaanxi, Henan and Anhui) overatotal distance of 3,3293km. Theproject started construction in January 2016; after completion, itis planned to send 66TWh of power to China’s eastern regionsannually. (Xinjiang daily)

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    Henan Power Grid 100MW Battery Energy Storage Demonstration Project begins operating

    All 16 energy storage power stations of the Henan Power Grid 100MW Battery Energy Storage Demonstration Project were completed and put into operation. China has taken an important step in the standardization and scaled construction of grid-side distributed energy storage power stations.The construction scale of the project is 100.8MW/125.8 MWh, with a total of 84 battery containers. (CEC)

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    Five State Grid pumped hydro energy storage stations start construction concurrently

    Five pumped hydro energy storage stations, located in Hebei, Jilin, Zhejiang, Shandong and Xinjiang, have begun construction concurrently and are set to operate at 6,000MW capacity by 2026. ThePHES stations have a total investment of 38.7 billion CNY. The construction of these stations is conducive to ensuring safe operation of the power grid and facilitatingintegration of other sources ofclean energy. (CEC)

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    First turbine of Datang Binhai offshore wind farm successfully connected to grid

    The first turbine of the Datang Binhai 300MW Offshore Wind Power Project was successfully connected to the grid. This project began construction in July 2018. On December 29, the first turbinecircuit installation and 35kV submarine cable laying work were successfully completed. (BJX)

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