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NDRC encourages more foreign investment
The National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOC) have released "Industry Directory for the Promotion of Foreign Investment", which is now in its draft stage and open for comments from the public. This notice has two intentions: 1) to revise the current guide for foreign investment industries, which applies to foreign investors and investment projects in various Chinese provinces and 2) to revise the list of advantageous foreign-invested industries in China’s central and western regions. The overall orientation of these revisions is to encourage more foreign investment in a large number of industries and technologies including renewable energy, renewable power generation equipment, key equipment manufacturing and clean power plants. (NDRC)
”Industry Directory for the Promotion of Foreign Investment” actively encourages more foreign investment in modern agriculture, advanced manufacturing, high-tech, modern service industries, etc., giving foreign capital a larger role in the transformation and upgrade of traditional industries, the development of emerging industries and the promotion of a sound economy in China.
Beijing Olympic Committee and State Grid sign contract for green power supply
The Beijing Olympic Organizing Committee and the State Grid Corporation announced that both Beijing 2022 Winter Olympics and Winter Paralympic Games venues would adopt “Green Power” in an effort to promote the widespread use of green energy in cities such as Beijing and Zhangjiakou in the future. China Huadian signed the contract as a representative of clean energy power generation enterprises (Xinhuanet)
Jiangsu to eliminate more than 2.8GW of thermal power projects in next two years
The Jiangsu Development and Reform Commission (DRC) has stated in a notice that eliminating the backward production capacity of thermal power units is a primary initiative of the power industry, to be carried out by accelerating the transformation of development methods, promoting energy conservation and emission reduction and optimizing the power structure. A total of 72 units of 2.83GW thermal power plants are listed in the notice, with the target timeframe for elimination within two years after the “Thirteenth Five-Year Plan”. (Jiangsu DRC)
Shanghai to fund high-end smart equipment projects up to 30 million CNY
The Shanghai Municipal Commission of Economy and Informatization (SHEITC) has just launched a special report on Shanghai’s first breakthrough R&D project of high-end smart equipment, which includes offshore wind turbines of 6MW and above and onshore wind turbines of 2-3MW and above. The report states that the project will be funded by SHEITC, in which the allocation of fund for each project will not exceed 30% of the amount of the first equipment sales contract. The first international equipment project will receive funding of 20-30% of the contract amount not exceeding 30 million CNY. (Sheitc)
Report shows Jiangxi 2018 wind power generation exceeds 4TWh, a 31.35% YOY increase
In the first three years of the “Thirteenth Five-Year Plan”, the growth rate of electricity consumption in Jiangxi Province has increased stably and is now ranking 9th in the country with an average annual growth rate of 9.54%. In 2018, the province's electricity production and consumption continued to maintain rapid growth, with total consumption reaching 142.877TWh, a YOY increase of 10.42%, and power generation reaching 130.145TWh, a YOY increase of 9.77%. (Jiangxi DRC)
NEA publishes 2018 grid-connected wind power report
By the end of 2018, China’s total installed grid-connected wind power capacity reached 184.26GW; with a total power generation of 366TWh, wind power made up 5.2% of the total. Wind curtailment rate was 7%, a 5% year-on-year (YOY) decrease. Among regions listed with the highest average wind power utilization hours, Yunnan came first at 2,654hrs, followed by Fujian (2,587hrs), Shanghai (2.489hrs) and Sichuan (2,333hrs). (NEA)
Map of wind curtailment conditions
In 2018, Xinjiang (curtailment rate: 23%, 10.7TWh), Gansu (curtailment rate: 19%, 5.4TWh) and IMAR (curtailment rate: 10%, 7.2TWh) had severe curtailment problems; the three provinces alone made up more than 84% of the country’s total curtailment.
CEC releases national power market analysis and forecast report for 2018-2019
In 2018, national power consumption totaled 6,840TWh, a YOY increase of 8.5%. Based on the country’s current economic situation, however, the outlook for power consumption growth is expected to fall steadily in the coming year, with an estimated growth rate increase of only 5.5%. (CEC)
NDRC calls for greater promotion and prioritization of renewable energy
The National Development and Reform Commission (NDRC) has requested a review of the management of the priority power generation and preferential power purchase system. The system was established to support the acquisition of clean energy such as wind power and solar power generation, as well as to ensure that clean energy such as nuclear power and large-scale hydropower are fully and safely operated. With the aim of promoting clean energy consumption, green energy development and energy structure optimization in the power industry, the NDRC is now calling for another look at ways to improve the policy system. (NDRC)
Local GOV can now independently organize unsubsidized PV generation projects
The National Energy Administration (NEA) has recently revealed the development plan for PV in 2019. Development will be divided into two major parts: PV power generation projects that do not require state subsidies and those that do. Projects that do not require state subsidies will be organized by local organizations on the premise of meeting management requirements such as planning, market environment monitoring and evaluation and implementing conditions such as grid connection. (NEA)
According to statistics, the average construction cost of wind farms and photovoltaic power plants built in 2017 was 20% and 45% lower than those built in 2012, respectively. (NEA)
“ZTT 7#” vessel completes Goldwind 6.45MW offshore WTG installation
After ZTT (Stock Code 600522.SH) successfully installed the first pile foundation at the 3-Gorges Jiangsu Dafeng 300MW Offshore Wind Power Project site using “MENCK-3500S,” the largest hydraulic pile hammer in China, it also reported that “ZTT 7#,” its offshore installation vessel, successfully installed the first Goldwind 6.45MW offshore wind turbine. (ZTT)
2018 newly installed grid connected wind power exceeds 20GW
By the end of 2018, China’s total installed grid connected wind power capacity reached 184.26GW, a 12.4% year-on-year (YOY) increase. The nation’s total installed grid connected PV power reached 174.63GW, a 33.6% YOY increase. On the power consumption side, national power consumption totaled 6,844.9TWh, an 8.5% YOY increase. (NEA)
Tianjin DRC publishes distributed wind plan (2018-2025)
Tianjin’s 2018-2025 distributed wind plan, in combination with the overall city development plan and the current state of implementation of land, power grid and wind resources, reveals that the target for installed capacity of distributed wind power is set to reach 780MW by 2025. (TianjinDRC)
Tianjin 100m height wind speed distribution map
7 billion CNY Pumped hydro station begins construction in Zhejiang
The Zhejiang Qujiang pumped hydroelectric energy storage station has begun construction. With a design capacity of 1200MW, the PHES station represents a total investment of 7.3 billion CNY. The station has a planned construction period of 70 months and once completed will have twice the installed capacity of the two Xin'anjiang hydropower stations that are also scheduled to be completed in 2025. (JJSB)
China’s farthest offshore wind turbine successfully installed
The first large-diameter offshore monopile foundation for wind turbines has been successfully installed in the Jiangsu Dafeng Offshore Wind Power Project. This is the first offshore wind turbine to be located as far as 70km from shore. (BJX)
Renewable energy export from Qinghai during 2018exceeds 10TWh
During 2018a total of 12,569 TWh of renewable energy was produced in Qinghai, of which 10.065TWh was exported to other provinces. At present, the installed capacity of Qinghai Province’s grid-connected renewable energy has reached 12.27GW, including 9GW of PV, 2.66GW of wind and 60MW ofsolar thermal power. During 2018, the government of Qinghai province has signed framework agreements with neighboring provinces, giving priority to absorption of new energy coming from Qinghai. (State grid paper)
CSIC receives government funding for floating wind demonstration
The Ministry of Industry and Information Technology (MIIT) has recently publicized “Development of Offshore Floating Wind Power Equipment,” a proposed research project of China Shipbuilding Industry Corporation (CSIC). The project is designed to explore the development of high-tech ships and high-power offshore floating wind power by carrying out research on key technologies and overall design of offshore floating wind power equipment, manufacturing, commissioning of mooring systems and applications at sea. (BJX)
With the project encompassing efforts to implement the “Made in China 2025” plan, promote the implementation of strategic emerging offshore engineering projects and improve the level of R&D and design of high-performing equipment in China, it is clear that China is looking to increase self-reliance by promoting large-scale domestic production. Currently, few foreign firms have development rights in China, but it is interesting to note that in late 2018 China seemed more open to the idea of using foreign aid to speed up development in deep-sea wind power. This could be due to prospects that the new policy effective January 1, which subjects all large-scale wind farm development to power price competitive bidding, will put a greater emphasis on the need for cost reduction.
PetroChina to build 23 new natural gas storage facilities by 2030
According to China Petroleum News, China National Petroleum Corporation (CNPC) and relevant oil and gas enterprises gathered in Beijing on January 9 to discuss PetroChina’s 2019-2030 underground gas storage construction and deployment plan. There, the various parties signed an agreement that delegated responsibilities accordingly, and it was disclosed that PetroChina would expand ten natural gas storage projects and build 23 new ones by 2030. (The Paper)
From the winter of 2017 to the spring of 2018, tight supply of natural gas in China raised concerns about insufficient domestic gas storage capacity. According to international standards, the working volume of underground gas storage must exceed 12% of consumption if dependence on natural gas reaches or exceeds 30%. In 2017, the country’s natural gas dependence was close to 40%, and in 2018 exceeded 40%, but its gas storage capacity was far from meeting the standards. China’s geological conditions pose the greatest challenge to building large-scale economical and efficient natural gas storage facilities.
Shaanxi DRC releases direct electricity trading results
The Shaanxi Development and Reform Commission (DRC) has released the results for the direct electricity trading between centralized heating users in Shaanxi Province during the winter of 2018-2019. On October 26, 2018, the committee organized 16 direct-transmission power generation enterprises, 33 power sales companies and 412 users to participate, resulting in a total electricity turnover of 1.05TWh (0.329TWh in 2018 and 0.676TWh in 2019). Within this number, 0.889TWh is attributed to industrial and commercial users, and 0.107TWh to other industries. The average transaction price for industrial and commercial users was 321.4CNY/MWh, making the average price difference from other industries 23.45CNY/MWh. (Shaanxi DRC)
Note that this list of participants is not exhaustive and represents only a small sample from the experiment. We present this table to demonstrate how thermal power plants are still the major players in direct electricity trading.
As Azure had previously forecasted, while the direct power trading mechanisms introduced over the past few years were initially expected to have a positive impact in helping integrate clean energy, it is more likely that large coal power plants will continue to dominate the market in the beginning. As we can see from this experiment, the majority of direct electricity traded was still coal-generated electricity.
Shanghai Temple-Shandong ±800kV UHV DC line starts operating
On January 11, the Shanghai Temple-Shandong ±800kV UHV Direct Current (DC) project, conducted by State Grid Shandong Electric Power, successfully completed 168 hours of trial operation. The UHV DC line passes through Inner Mongolia, Shaanxi, Shanxi, Hebei, Henan and Shandong provinces over a total distance of 1,230km at a rated transmission capacity of 10GW. At present, only two UHV lines, in Weinan and Qingzhou, have a full-load transmission capacity as high as 20GW. (BJX)
Jiangsu DRC approves 24 offshore wind power projects
On December 28, 2018 the Jiangsu DRC approved 24 offshore wind power projects with a total installed capacity of 6,700MW and a total investment of 122.3 billion CNY. (Offshore wind)
The news comes right after the NEA’s announcement that projects approved in 2019 will be subject to competitive on-grid price bidding, and can be seen as local governments’ last-ditch attempts to obtain feed-in tariffs (FIT). The FIT price was not stated, so it is unknown whether or not these projects will actually be receiving them.
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)
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 UHV DC line to start operation soon
The world’s first ±1100kV UHV Direct Current project, extending from Changji (Xinjiang Province) to Guquan (Anhui Province), has entered the final inspection stage. With a total investment of 40.7 billion CNY, the UHV line spans across six provinces (Xinjiang, Gansu, Ningxia, Shaanxi, Henan and Anhui) overa total distance of 3,3293km. The project started construction in January 2016; after completion, it is planned to send 66TWh of power to China’s eastern regions annually. (Xinjiang daily)
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)
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. The PHES 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 facilitating integration of other sources ofclean energy. (CEC)
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 turbine circuit installation and 35kV submarine cable laying work were successfully completed. (BJX)
Hebei Government approves Xiongan New Area (2018 – 2035) comprehensive plan
The State Council, China’s cabinet, recently approved the comprehensive development plan (2018-2035) for Xiongan New Area, a guideline for developing the region based on international standards with Chinese characteristics. The plan outlines the need to build a green low-carbon city, to optimize energy structures, to build green power supply systems and clean and environmental-friendly heating systems and to promote local renewable energy utilization. (GOV)
Fujian DRC releases new bidding mechanisms for offshore wind farms
The Fujian Development and Reform Commission (DRC) has drafted new measures for competitive bidding of offshore wind power projects within the province in an attempt to promote efficient development of offshore wind power and technology, industrial upgrading, as well as market-oriented development. The measures are currently being implemented in a trial period and applied to select projects as detailed below.
Scope of application:
1. Projects approved before 2019 – FIT (0.85CNY/kWh)
2. Projects with determined investment entities and approved after 2018 will be subject to competitive on-grid tariffs and development rankings
3. Projects that have not yet determined investment entities before May 18, 2018 will be required to determine the investment entities and will be subject to competitive on-grid tariffs and development rankings (Fujian DRC)
Fujian Xinghuabay offshore wind project
Looking at Fujian’s new bidding mechanisms for offshore wind farms, it seems that the lack of requirement for developer references but increased requirements for offshore wind turbine suppliers have leveled the playing field for foreign investors. As for on-grid pricing, it seems that the Fujian DRC favors excessive competition over proposed on-grid prices.
Yudean Zhenjiang Wailuo Offshore Wind Farm II begins construction
On December 26, the commencement ceremony for phase two of the Yudean Zhenjiang Wailuo Offshore Wind Farm was held in Guangdong’s Xuwen County. The project is to have a total installed capacity of 203.5MW with an investment of 3.8 billion CNY. The project plans to deploy 37 units of 5.5MW offshore wind turbines with annual power generation of 484GWh. (Xuwen GOV)
The Yudean Zhenjiang Wailuo Offshore Project was divided into two phases. The first phase of the project oversaw a total installed capacity of 198MW and completed its first offshore wind turbine installation in December 2018.
Xinjiang 1,200MW pumped hydroelectric energy storage project approved
The Xinjiang Hami 1,200MW pumped hydroelectric energy storage project has been approved by the local DRC. This project is located Northeast of Hami City with a distance of 66km to shore. The project will have a total installed capacity of 1,200MW distributed in four energy storage units of 300MW each. The project will have an investment of 8.2 billion CNY with an annual power generation of 1.4TWh. (XJDRC)
The project involves the construction of two reservoirs. The upper reservoir collects snow from Tian Shan (mountain range) and discharges water into the lower reservoir. The water from the lower reservoir is then pumped into the upper reservoir to generate electricity. Due to the large amount of wind power generated by Hami City at night, the power station can use the unutilized wind power to pump water to the reservoir during the nighttime so that the water can drain in the daytime. (SINJIANGNET)
Yunnan “West to East” electricity capacity to reach 39GW
Following implementation and acceleration of the Kunliulong ±800kV and Lancangjiang 500kV projects, Yunnan’s “West to East Power Transmission” project is also said to speed up construction for completion by 2020 with electricity capacity reaching 39GW. (CEC)
Kunliulong ±800kV project
Since the transmission of electricity to Guangdong and Guangxi in 1993, it has accumulated 800TWh. Yunnan’s installed capacity for power generation jumped from 1.3GW in 1978 to 93.2GW by the end of October 2018. The proportion of clean energy installed by hydropower accounted for more than 82.7%, becoming an important green energy base and power transmission base for the “West to East” project.
China's first 100MW scale solar thermal power station successfully put into operation
The first-class, energy-saving Dunhuang 100MW molten salt tower type solar thermal power generation demonstration project has been successfully put into operation. This project’s total investment is above 3 billion CNY. According to the requirements of the National Energy Administration (NEA) on the grid connection time of the first batch of demonstration projects, the project will have a FIT of 1.15 CNY/kWh. (cnenergynews)