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Wind – Goldwind opens new blade material plant with Swancor: Goldwind has partnered with resin producer Swancor to build a new facility for blade coatings in Jiangsu. Goldwind has a 60% stake in the facility. (Windpower Monthly, in English)
Wind – Construction kicks off at two facilities: Huanghe Hydropower has started construction at the 49.5 MW Gayakou project in Qinghai, with plans for completion by year-end 2014. (Windpower Intelligence, in English) Similarly, SinhoHydro has started construction at its 50 MW Guanjiazui facility near Hengyang. (Windpower Intelligence, in English)
Wind and solar – Curtailment report released: The report, which is based on data from multiple sources, paints a bleak picture for curtailment in 2014, saying the large number of projects added in 2013 and the full pipeline of new projects approved for 2014 implies a worsening curtailment situation for this year. In the first quarter of this year, Liaoning, Heilongjiang and Inner Mongolia have all seen higher wind curtailment numbers. There is some good news: Gansu province has seen wind curtailment fall substantially from prior years due to the addition of new transmission lines. (BJX, in Chinese)
Wind and solar – State Grid figures show slow solar additions: State Grid connected only 2.33 GW of new PV in the first half of 2014, according to figures released at a conference this past week. The vast majority of PV connections are large, central power plants, leaving the government far from achieving its goals on distributed solar. (Solar of Week, in Chinese) State Grid also reported adding 5.6 GW of wind in the first half of 2014. (Chinapower, in Chinese) Note these figures account for most, but not all, additions, since they exclude China Southern Grid.
Solar – FirstSolar officially cancels 2 GW Ordos project: The project, announced with fanfair in 2009, had been on ice for years while FirstSolar’s JV partners (most recently, Guangdong Nuclear) dithered on price and other issues. (PV-Tech, in English)
Energy storage – CNESA calls for new policies to promote storage: CNESA notes that energy storage can promote government goals for distributed solar, as well as help areas with weak local grids. (BJX, in Chinese)Electric vehicles – The central government wants governments to purchase 30% EVs by 2016: EVs should make up at least 30% of new government vehicle purchases by 2016, and the proportion may be raised if that target can be met. (Daily Energy Report, in English)
In May 2014, Barclays downgraded its rating on U.S. electric utilities, citing fears that growth in the PV and energy storage market will drive grid defection. The Barclays credit strategy team wrote:
"Over the next few years, however, we believe that a confluence of declining cost trends in distributed solar photovoltaic (PV) power generation and residential-scale power storage is likely to disrupt the status quo. Based on our analysis, the cost of solar + storage for residential consumers of electricity is already competitive with the price of utility grid power in Hawaii. Of the other major markets, California could follow in 2017, New York and Arizona in 2018, and many other states soon after… We see near-term risks to credit from regulators and utilities falling behind the solar + storage adoption curve and long-term risks from a comprehensive re-imagining of the role utilities play in providing electric power."
Barclays paints a dire picture for utilities and a rosy one for PV and energy storage developers. But Barclays' analysis uses a market valuation technique that doesn’t currently apply in most markets under present policies.
Case in point, Hawaii uses net metering, which provides a strong disincentive for energy storage. On one hand, Energy storage developers like SolarCity (NASDAQ: SCTY) and ZBB (NYSE: ZBB) should do more research before entering this market. On the other hand, the situation for American utilities in general (NYSEArca: XLU) may not be as dire as Barclays analysis leads one to believe—at least not due to the adoption of PV and ES.
This short analysis highlights the danger of using the wrong PV and ES valuation approach to draw conclusions concerning the near term business case for PV and ES. (See the full article here.)
Regulation – China kicks of energy 13th Five-Year Plan meeting: The official communique listed a number of green related high-level themes for the 13th Five-Year Plan, including low carbon, energy saving, sustainability, and clean energy. Market-oriented reforms weren't mentioned prominently. (China Power, in Chinese)
Regulation – WSJ reports on anti-corruption drive’s relation with power reform: The removal of energy officials could be related to overcoming stubborn resistance to energy reform, especially at the local level and at State Grid. (WSJ, in English)
Solar – West China expected to vastly exceed 2014 solar plan targets: Total solar installations in West China (Xinjiang, Qinghai, Gansu, Inner Mongolia) could reach 8 GW, over three times the announced plans of the central government. Qinghai has approved projects of 1.2 GW for 2014, over double the theoretical limit of feed-in tariff subsidy for 2014. (BJX, in Chinese)
Wind – XEMC begins offshore wind turbin installation in Fujian: XEMC, which has a manufacturing base in Fujian, has begun installation of 10 units of 5 MW turbines in Pinghaiwan, Fujian. The 50 MW project is budgeted for RMB 1.22 billion. (Windpower Monthly, in English)
Wind – 300 MW Heilongjiang project approved: Ruihao Group has received approval for a 300 MW project at Ladanpao in Heilongjiang. (Windpower Intelligence, in English)
Efficiency – China LED firm snags US$ 80 million in VC funding: Lattice Power claims that it has a high-efficiency, low cost LED. GSR and KPCB joined the round. (Dow Jones, in English)
Solar – Hanwha Q Cells announces module deal with Martifer: Hanwha Q Cells will supply 30 MW of modules to the Portuguese solar development company for European projects. (Q Cells, in English)
Solar – Trina announces 60 MW to Xinyi Solar: The deal includes 25 MW of dual glass modules for deployment in greenhouses. (PV Magazine, in English)
Solar – Yingli reports earnings, reiterates full-year guidance: Yingli reported gross margins of 15.7% and net profit margins of -4.8% for 1Q 2014. Shipments for the 1Q fell 33%, in line with previous earnings warnings, and the company reiterated full-year module shipment guidance of 4-4.2 GW. (SeekingAlpha, in English)
Regulatory – Small generators enjoy new tax breaks, distributed solar tax simplified: Tax authorities announced that the central government will reduce value-added tax (VAT) rates on revenue earned by small generators. Previously, some small generators were taxed at rates varying between 3-6%. Henceforth, all small generators will enjoy a flat 3% VAT rate. The tax savings are expected to amount to RMB 24 billion. The rates benefit small hydro, natural gas and biomass power. (China Power, in Chinese) In related news from the prior week, authorities announced that private individuals would no longer have to apply for a fapiao (official receipt) for revenue from power injected into the grid. From now on, grid companies can directly pay for such power, after deducting 3% VAT. Previously, individuals paid 17% VAT and had to apply separately for a tax receipt. (BJX, in Chinese) Red tape and delays are the major obstacles to meeting the government’s aggressive targets for distributed solar.
Carbon – Chongqing will be final carbon market pilot before 2018 nationwide rollout: Trade data from the existing pilots shows a wide range of prices and trading volumes. (RTCC.org, in English)
Wind – China wind export figures for 2013 show substantial growth: China exported 688 MW of wind turbines in 2013, representing growth of 60% versus the prior year’s 430 MW. Cumulative wind exports are 1,389 MW, the vast majority of which took place in 2012 and 2013. Goldwind accounts for 45% of cumulative exports, and accounted for over 50% of China wind exports in 2013. (BJX, in Chinese)
Wind – Ming Yang gains approval for 300 MW offshore project: Jiangsu has approved Ming Yang to build a 300 MW offshore facility near Rudong, already the site of China’s largest offshore wind farm. (Ming Yang, in English) Ming Yang has also signed an agreement to test its new 6 MW offshore wind turbine in the seas near Norway. (Windpower Monthly, in English)
Wind – Suntien to build 49.5 MW wind farm in Hebei: The RMB 470 million project will begin construction in a few months. (Windpower Intelligence, in English)
Wind – Huadian to build 100 MW wind farm near Lijiang, Yunnan: Huadian Jinzhong has signed a preliminary agreement with the local government to develop a 100 MW wind project. The project will likely be completed in two phases. (Windpower Intelligence, in English)
Solar – Hanergy partners with Japan’s Sojitz to enter Japanese market: The two companies announced that they are planning several PV projects, including a 10 MW thin-film manufacturing facility in Japan using Hanergy’s CIGS technology. Japan has become a major export destination for China’s solar products as the U.S., India and the EU raise tariffs and trade barriers. (PV-Tech, in English)
Solar – Hanwha ships 9.5 MW of solar to Ikaros in U.K.: The panels will be used in two separate installations, one 3 MW and the other 6.5 MW. Hanwha previously delivered 11.5 MW to Ikaros for a plant in Norfolk. (PV-Tech, in English)
Solar – Government eases tax red tape for distributed solar: Distributed solar systems selling power back to the grid can use a simple invoicing form, the government announced, rather than the complex corporate form. State Grid can collect any tax due. (PV-Tech, in English; PV Magazine, in English)Regulatory – Central government publicizes checkups on polluting factories: The report includes detailed inspection results at factories and power plants found to have violated air pollution limits, falsified emissions data, or incorrectly operated emissions control devices. (BJX, in Chinese) Coal plants are paid a tariff set for desulfurized, de-NOx coal power, but in the past observers have noted that coal plants install mandated equipment such as scrubbers and then fail to operate it.
Wind – Minsheng Bank provides loan for Gamesa Uruguay project: China Minsheng Bank will provide loans to support the 50 MW project. The project will be developed by Abengoa with turbines from Gamesa, to be manufactured in Tianjin. (Windpower Monthly, in English)
Wind – China Resources Group to develop 150 MW Hebei project: The RMB 1.2 billion project in Qinglong, Hebei, is expected to begin construction in 2016. (Windpower Intelligence, in English)
Solar – China Sunergy will supply 50 MW of PV modules in Turkey: China Sunergy has signed an agreement with joint-venture KosiFrankensolar to develop 50 MW of rooftop and ground mounted solar. China Sunergy has manufacturing facilities in Istanbul. (PV-Tech, in English)
Wind – 201 MW Kushui project under construction: Datang’s Kushui project near Hami in Xinjing is seeing progress, with 39 turbines connected to the grid. Completion is expected by the end of 2014. (Windpower Intelligence, in English)
Solar – ReneSola reports wider-than-expected loss, revenues up 46%: ReneSolar reported 1Q financial results, with a US$ 0.14 loss per share (American depositary share). Revenues rose due to higher shipments, particularly to the Japanese market, and the company said it expects to ship between 480-500 MW of modules in 2Q 2014, with gross margins of 12-14%. (Yahoo, in English)
Power industry – CEC releases official power plant cost estimates for 2012: On May 30, the China Electricity Council released cost figures for new power plant capacity in China. Wind was estimated to cost RMB 9,056/kW, new coal capacity RMB 3,824/kW, and solar RMB 14,788/kW. Solar costs have fallen significantly since 2012. (BJX, in Chinese)
Transmission – Opponents to State Grid transmission plan issue alternative plan: 11 electric transmission experts have published a letter with an alternative plan to State Grid’s proposed 12 new long-distance transmission lines. The alternative plans are intended as having lower-cost and higher-benefits, including improved grid safety and stability. The experts also explicitly criticized State Grid for advertising its transmission plans as falling under the heading of smog reduction. (China Smart Grid, in Chinese)
Renewable energy – EY names China as #2 in its sustainability index: International professional services firm EY (formerly Ernst & Young) listed China as #2 in its sustainability index in May, slightly behind the U.S. China came out as #1 in solar PV, onshore wind, hydro and biomass, but the U.S. came out ahead in geothermal, marine and concentrating solar. (EY, in English)