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Jiangsu DRC publishes 2018 wind development and construction plan
The plan features 46 projects with total installed capacity of 2.58GW, and estimated utilization hours of 2,000 hrs in 2018. (Jiangsu DRC)
In 2017, Jiangsu province saw power consumption of 580.8 TWh and power generation of 488.5TWh, therefore needing to satisfy more than 15% of its energy demand by importing power from other provinces. As consequence, Jiangsu has no curtailment issue and it was listed as a "green province" in the 2018 Wind Power Investment Monitoring report of the NDRC , meaning that it can move forward with their wind planning, by opposition to some "red provinces" which have to interrupt wind developments.
Jiangsu DRC guidance for development of distributed energy and micro grids
The documents proposes establishement of 20 micro-grid demonstration projects in Jiangsu province by 2020, representing 400MW of newly-added distributed energy capacty; and also guides towerdas building 50 projects by 2025, with an associated capacity of 2,000MW. (Jiangsu DRC)
Distributed energy microgrids are generally characterized as clean, small, autonomous and convenient. Their aim is to achieve a balance between local energy demand and production.
Direct power trading in Beijing in June
The Beijing Electric Trading Center saw 14 transactions in June, totalling 16,4 TWh of direct power trading, and including 7% of clean energy. Transactions are not only for power produced or consummed in Beijing however, but cover several provinces in the country. (BJX)
Anhui DRC issues distributed wind development and construction notice
The notice calls for DRC bureaus in all Anhui cities to submit their 2018 - 2020 distributed wind pipeline by the end of July. (Anhui DRC)
Yet another province rapidly compiling its distributed energy plans, confirming the clear new trend in the industry.
Guohua Dongtai IV 300MW offshore wind project officially started
On June 22, Jiangsu Shenhua and its suppliers held a ground breaking ceremony for the start of construction of the Guohua Dongtai IV 300MW offshore wind project.(BJX)
Dongtai IV is currently the offshore wind farm which is furthest from shore in China. After completion, it is expected to produce 813GWh annually, equivalent to 20% of Dongtai city's annual electricity consumption.
MOF published the 7th batch new energy subsidy list
On June 15, the Chinese Ministry of Finance published the 7th batch of the new energy subsidy list. The batch covers more than 5,000 renewable energy projects that were connected to the grid between closure of the 6th batch and March 2016, including 1,185 grid-connected power generation projects with a total capacity of approximately 53GW. 475 wind farms with cumulative capacity of 34GW account for 64% of all grid-connected power generation projects. 613 solar power projects with cumulative capacity of 17 GW account for 33% of all grid-connected power projects (MOF)
The issuance of the subsidy catalogue will help improve the cash flow of related renewable energy projects, which have not been able to secure full FIT revenue streams since they connected to the grid and started selling electricity, up to years ago. This seventh batch in particular has been awaited for a longer time than in the past, as the application was closed more than a year ago.
NEA published national power industry statistics from Jan to May
Between January and May 2018, a total of 34GW of energy projects have been installed throughout the country.
The data is incomplete as solar installations are not given, however we can extrapolate that they have exceeded 10GW, from looking at the total installed capacity. Hydro and thermal installations are slowing down compared to previous years, and wind is maintaining a steady growth.
Shaanxi Province distributed wind power development plan
In June 2018, Shaanxi Province officially issued its distributed wind power development plan, with a total installed capacity of 426 MW. (CHINAWINDNEWS)
From the documents, we can see that a majority of the projects are below 20 MW, and that 90% of them do not overcome 30 MW. This definitely is a new trend compared to the past were big 50MW projects have been preferred. We remind that smaller capacity distributed wind power projects will benefit from more government subsidies (for further information consult the news published on April 23rd).
Xi Jinping and Putin sign nuclear energy cooperation project
On June 8th, during the Cooperation Summit in Qingdao, the Chinese President Xi Jinping and Russian President Putin signed an agreement for joint construction of 4 VVER-1200 third-generation nuclear reactors in Tianwan, Liaoning province, and Xudabao, Jiangsu province. The value of the contract exceeds 20 billion RMB contract and the total cost of the 2 projects is estimated above 100 billion RMB. (CEC)
NDRC & NEA agree Tibet carry out electric reformation
On June 21st, NDRC & NEA agreed that the Autonomous Region of Tibet will join other provinces in implementing electrical power system reforms, By the end of 2017, Tibet power consumptions reached 6.201TWh and power generation reached 6.226 TWh for a total installed generation capacity of 3.09GW. (NDRC)
Electric reforms applied to a growing number of Chinese provinces form a set of policies enabling to determine energy prices through market mechanisms, therefore disrupting the monopoly of grid companies and establishing a more transparent structure for pricing of T&D.
NEA issues new FIT guidelines for wind projects
On May 18, 2018, NEA issued the “Circular on the 2018 Annual Requirements for Wind Power Construction Management”, listing a number of management guidelines for deployment of wind farms such as how implementing of national targets and avoiding wind curtailment. The most important item is the sudden announcement that, as of the date on which the policy was issued, for all the new onshore wind farms in provinces which have not yet issued their 2018 wind construction plans, and all new offshore wind farms for which an investment entity is not yet identified, the feed-in-tariff (FIT) shall be established via a competitive mechanism. Other projects that already built or do not fit in above categories can continue to enjoy the regular wind FIT. It is also suggested that the wind farms eligible under the distributed wind policy (less than 50MW, 110kV or less grid connection) can still benefit from the original tariffs. (NEA)
There has been regular policy drafting and discussion around reduction of FIT for wind energy, but such a sudden change effective immediately was generally unexpected. Relying on historical events, one can imagine that FITs established via competitive bidding will be significantly lower than original FITs and might also create uncertainty on developer's capacity to retain their project. This can be very bad news for some investors, especially those with projects still in development and not yet announced in provincial plans. Azure is currently performing further research to understand the details of the policy, such as to which projects it applies, the definition of "investment entity", which "competitive mechanisms" will be put in place to establish future tariffs, and the potential impact on market players.
Shandong province announced 2.4 GW wind power projects in 2018
On May 17th, Shandong Province issued the 2018 annual wind power development plan. The province informed that, in 2017, a total of 3.34 GW of wind power projects have been developed, and announced that a total of 51 power projects have been arranged for 2018, with a total construction scale of 2.4 GW. (BJX)
Shandong will promote more than 50 new wind energy plants. Considering the relatively average low capacity of wind farms, we expect that several of them are decentralized projects, connecting at or below 110kV. The timing of the announcement is interesting, 1 day prior to the national FIT policy described above.
Dalian City announced 1.5 GW offshore wind farm project
Dalian City (Liaoning province) has recently approved 200 MW of onshore wind, 600 MW of offshore wind and 40 MW of photovoltaic power generation projects. Dalian Development and Reform Commission has also announced a plan to develop 1.5 GW of offshore wind power in Zhuanghe sea area. (BJX)
As the most Northern of the ten Chinese coastal provinces, Liaoning also has significant offshore wind ambitious, and its own technical challenges, such as low temperatures and ice conditions. Dalian city was home to Sinovel, once a leading Chinese wind turbine manufacturer. It is yet unknown whether the local manufacturer will get a chance to participate in said project.
EDP rejects €9.1 billion offer from Three Gorges Group
On May 14th, Portugal’s largest power company EDP (Energias de Portugal) rejected Three Gorges’ 9.1 billion € acquisition offer. Three Gorges Group became EDP’s shareholder in 2011, acquiring 21,35% of the company for 2.69 billion €. Currently, Three Gorges is the largest of EDP’s shareholder and just made an offer to requiring all remaining shares. According to Bloomberg, although the Portuguese government was satisfied by Three Gorges Group's offer, it has not received the support of EDP shareholders. (CHINAWINDNEWS)
Jilin: 35.5% wind curtailment rate drop in Q1
In the first quarter of 2018, wind curtailment in Jilin Province has decreased by 35.5%. During the same period last year, the province had the worst curtailmentin the country with a rate of 44%.Thanks to new UHV DC projects that came in operation in February 2018, in less than 2 months, Jilin has been able to export a total of 1.78 TWh of clean energy. In 2018, the province plans to control wind curtailment rate within 15%, and within 12% in 2019 and 10% in 2020. During the first quarter of this year, Heilongjiang Province also registered strong improvements, with a curtailment reduction of 27.8% compared to Q1 the previous year. (CHINA WIND NEWS)
The provinces in the north of China are focusing on reducing wind curtailment. In 2016, NEA added Jilin on the red alert zone list, suspending construction of new wind farms. The province is increasing power exportations in order to increase power plants utilization hours. If it can achieve its objectives, Jilin should be able to get off the red ban list within a few years, which would be great news for the developpers that have projects in standby in the area .
Henan province announces 5.5 GW of wind power construction in 2018
On May 8, Henan province issued the "2018 Wind Power Construction Scale Notice." This year,the province plans to develop 5,5 GW of wind powers projects, with a 50 MW minimum power unit size. (BJX)
Source: Azure International
Henan is seeing increasing investment in wind power. Almost 30 different projects have been approved, with an installed capacity varying between 50 MW and 350 MW..
Shandong, renewables account for 20% of new installed capacity
Shandong is speeding up the establishment of a clean energy supply system. On April 26th, State Grid Shandong Electric Power Co. announced that the province's renewable energy installed capacity has reached 26.04 GW, accounting for 20.7% of total installed capacity and, by the end of 2020, it is expected to reach 31 GW. Moreover, Shandong has recently actively promoted the construction of UHV transmission channels that,up to now, have guaranteed an incoming 400 GWhof energy,allowing to save the equivalent of 180 million tons of coal consumption. By 2019, the 1000 kV Shandong-Hebei UHV project will be completed and put into operation, andby 2020, Shandong’s grids expected to be more than 30 GW incoming power. (CEC)
Shandong is actively incentivizing clean-energy and cross-regional market transactions. Renewables capacity is expected to increase by 16% in less than 2 years. The province is currently promoting non-coal energy sources.The premium localization between Beijing and Shanghai offers huge potentialities for energy tradings. The development of UHV transmissions channels will generate high opportunities also for the neighboring provinces.
6.4 TWh nuclear power transmissions in Fujian province
During the first quarter of this year, Fujian province consumed 10.8 TWh of energy. Nuclear power delivered 6.4 TWh, two times the production registered during the same period of 2017. The total installed power capacity reached a 55.97 GW value, with clean energy accounting for 54.5%, and nuclear energy accounting for 8.71 GW, 15.6% of total, ranking second in the country. Moreover, the 1000-kV UHV T&D project between northern Zhejiang and Fuzhou has been put into operation, increasing power grids exchange capacity from 1.7 GW to 4.5 GW. (BJX)
Renewable energy is currently accounting for more than half of installed power capacity in Fujian. During the first quarter of 2018, nuclear power satisfied almost 60% of transactions in the province. Renewables are expected to represent a solution to support the continuous growth of demand in the area.Distribution networks development will support new power stations construction, offering the possibility to rely on other provinces demands and increasing power plants utilization hours.