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Grid – Electricity sourced from coal down 0.3% through first 11 months of 2013: The CEC November electricity consumption statistics show a drastic slowdown in coal-fired electricity consumption. Over the first 11 months, Electricity generated by China’s large-scale coal-fired generation fleet declined 0.3% from 3812.6 TWh in 2013 to 3806.6 TWh in 2014. This was driven by a 4.2% drop in coal fired generation in November 2014 compared to November 2013. Utilization of coal-fired capacity is down 5.4% from 2013 and is also headed towards a historical low. If this trend continues, China will see the first annual decline in coal-fired electricity generation in recent history. (CEC CN)
Grid – Six provinces experience rare drop in electricity consumption this November: According to official statistics released by the China Electricity Commission, electricity consumption from January – November reached 5011.6 TWh, up 3.7% from the same period in 2013. However, Shanxi, Liaoning, Hebei, Shanghai, Henan and Beijing all experienced a drop in electricity consumption from the previous month.
Policy – NDRC issues notice on 2015 electricity supply and demand situation: The NDRC issued a notice requesting careful analysis by grid companies for their 2015 electricity supply and demand forecasts, which are due by December 31. Although not
Battery – New MIIT policy could spur massive wave of lithium ion battery industry plant closures and consolidation: On December 12, the Ministry of Industry and Information Technology released “Lithium Ion Battery Industry Scoping Conditions,” for which it is currently soliciting industry feedback until December 20.
Although the policy claims environmental protection as one of its main goals, it has strong implications for consolidation within China’s lithium ion battery supply chain. The policy sets the minimum yearly manufacturing capacities for battery and component manufacturers:
Moreover, the previous year’s manufacturing utilization must be greater than 50% of the plant’s stated capacity.
Policy – NDRC releases progress update on Twelfth Five-Year Plan energy efficiency targets: The NDRC recently surveyed progress towards meeting 12-5 energy efficiency targets based on provincial energy consumption during the first 10 months of 2014. Fujian, Qinghai, Xinjiang, Hainan and Ningxia showed energy consumption well above their target levels, meaning it will be very difficult for them to meet their 2015 goals if current trends continue. Many other provinces, including Shanghai and Beijing, showed some risk of missing their targets. Local government officials are judged on their ability to meet national targets and currently failing provinces will likely take strong proactive measures. To meet 11-5 energy saving targets (2005-2010), many provinces forced factories to close or drastically reduce consumption during the final year. Encouraging rapid adoption of energy efficient technologies would be a more effective approach. (NDRC CN)
Electric Vehicles – Chinese government to phase out pure electric bus development: Reversing its previous stance, the Chinese government will now largely abandone its electric bus development plans. This is according to the Director of the National “863” EV Development and Battery Testing Center WANG Zidong. At a conference last week, he cited high infrastructure and maintenance costs as the drivers for this change. For example, Beijing invested
Solar – China will not make its 2014 solar target according to leading researchers: Last week, Director General of China’s National Center for Climate Change Strategy and International Cooperation announced that China will likely miss its 2014 of 14 GW newly installed capacity. Mr. Li estimates that 12 GW is more likely and that the actual number could be as low as 10 GW once grid interconnection delays are taken into account. In addition, Wang Sicheng of the NDRC Energy Research Institute estimated that China’s 2014 installations will reach only 10 GW, citing several distributed PV development challenges.
Installed PV Capacity Through Q3 2014 and 2014 Targets According to NEA
Source: NEA, Azure International
Azure has been closely following PV market developments. Despite the fact that less than 35% of
Policy – State Council releases Energy Development Strategy Action Plan (2014-2020): The PRC State Council released its vision for the future of China’s energy development on November 19th. Building upon earlier policy goals, the State Council calls for primary energy consumption to be limited to 4.8 billion tons of standard coal equivalent in 2020, implying a 3.4% CAGR. Coal consumption will be limited to 4.2 billion tons (equivalent to 2.98 tons standard coal), implying a 2.2% CAGR from 2014-2020. In line with previous goals, hydro, nuclear, wind and solar installed capacity targets for 2020 are 350 GW, 58 GW, 200 GW and 100 GW respectively. Energy storage is mentioned in this plan, appearing under the “9 focused innovation fields” and “20 significant improvement sections.” (GOV CN)
Policy – State Council eliminates six regulatory approvals related to energy market: On November 23, the PRC State Council released a sweeping list of administrative approval cancellations and adjustements touching all aspects of governance. With respect to China’s electricity market and operation, six approval processes covering issues like inter-provincial transmission pricing were eliminated. These changes will enable greater electricity market reform and marketization. (GOV CN)
Policy – Central bank interest rate cuts are good for RE project investment: China Central Bank’s decision to cut the one-year ad five-year lending rates by 40 basis points to 5.6% and
Policy – U.S.-China Joint Agreement on Climate Change: President Obama of the U.S. announced a new target to cut net greenhouse gas emissions 26-28 percent below 2005 levels by 2025. At the same time, President Xi Jinping of China announced targets to peak CO2 emissions around 2030, with the intention to try to peak early, and to increase the non-fossil fuel share of all energy to around 20 percent by 2030. Interestingly, China’s population is also set to peak around 2030. (WhiteHouse EN)
Policy – U.S.-China Joint Agreement on Clean Energy Cooperation: It was also announced that the Clean Energy Research Center (CERC) mandate will be extended for an additional five years, from 2016-2020. Funding will be used to support four areas of research: building efficiency; clean vehicles; advanced coal technologies and carbon capture, use and sequestration (CCUS); and the interaction between energy and water. (WhiteHouse EN)
Policy –RE Subsidy delays for China’s Big Five generation companies tops US$1 billion: According to