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China offshore 2018
As 2018 comes to an end, Azure has put together a comprehensive review of China’s offshore wind status. By the end of the year, China had a total of 3GW offshore wind projects in operation, with nearly 80% in Jiangsu Province. But the trend is now clearly shifting towards Guangdong Province which is home to more than 30GW of offshore wind projects in various stages of development, representing 90% of the country's pipeline. Note: All analysis data source collected from public data and Azure database.
Local DRC pre-approves Shanghai Electric 9.5GW offshore wind projects
On December 17, 2018, Guangdong Province’s Shantou Development and Reform Commission (DRC) published 10 offshore projects with a total of 9.5GW. (Shantou DRC)
Shanghai Electric is currently the largest supplier of offshore wind turbines in China. By the end of 2017, the company had supplied more than 1.5GW of offshore wind turbines in China. In 2017, Shanghai Electric and the Shantou government signed a contract to set up the Shanghai Electric Guangdong offshore wind power intelligent manufacturing base in Shantou with an investment of 500 million CNY. After it is completed and put in operation, the base will have an annual production capacity of 200 wind turbines and an annual output value of more than 10 billion CNY. The facility is expected to ship its first wind turbine towards the middle of 2019.
Yangjiang DRC approves nine distributed wind projects totaling 230MW
Nine distributed wind farm projects, totaling 230MW, have been approved by the Yangjiang DRC. The project sizes range from 12 to 40MW. (Yangjiang DRC)
Jiangsu wind projects to be attributed via competitive bidding in 2019
According to a new notice posted by the Jiangsu DRC, from 2019 onwards, newly approved centralized onshore wind power projects and offshore wind power projects in Jiangsu Province should all be attributed via competitive bidding mechanisms taking in account proposed on-grid tariff. (Jiangsu DRC)
Shaanxi DRC releases new bidding mechanisms for onshore wind farms
The Shaanxi DRC has drafted new measures for competitive bidding of onshore wind power projects within the province in an attempt to promote efficient development of onshore wind power and technology, industrial upgrading, as well as market-oriented development. The measures will be implemented on January 1, 2019 for a trial period of two years. (Shaanxi DRC)
Shaanxi requires that onshore wind projects be between 50 to 100MW and, for developers, that net assets be above 500 million CNY. Projects that do not meet these conditions will be subject to a 5% decrease in developer-proposed on-grid prices and will be restricted from investment for three years.
Jiangsu DRC approves Zhugensha H2# 300MW offshore wind project
According to the Jiangsu Development and Reform Commission (DRC), the Zhugensha H2# 300MW offshore wind project has been approved. The project has a special sea area located between the Guohua Dongtai IV 300MW and Guohua Zhugensha H1# 200MW. The project’s distance from shore is 39km, making it a part of the intertidal zone offshore project. The project plans to deploy 50 units of 4.0MW and 17 units of 6.0MW offshore wind turbines. The project’s total investment is about 5.2 billion CNY and project capital is 1.04 billion CNY. (Jiangsu DRC)
While most offshore wind projects in China are developed and operated by large state-owned companies, this project’s developer, Dongtai Shuangchuang New Energy, is a private company. However, it is interesting to note that this project’s legal representative, Mr. Rong Leng, also works for CHN Energy Longyuan, which belongs to state-owned China Guodian Corporation. Last week, another project developped by a private owner was approved in Jiangsu, the GCL Rudong H15 200MW project.
Baolihua & CGN establish company to co-develop offshore wind project
Guangdong Baolihua New Energy Stock (000690.SZ) and China General Nuclear Power Group (CGN) have agreed to jointly invest in the establishment of a project company to develop the CGN Shanwei Jiazi offshore wind project (900MW) and the CGN Shanwei Houhu offshore wind project (500MW). The registered capital of the project company is 521 million CNY, of which 80% million CNY is contributed in cash by CGN, and the remaining 20% held by Baolihua. (Finance sina)
China publishes first bidding mechanism results for onshore wind project
The Ningxia 2018 wind bidding mechanism results have been published. A total of 32 projects joined the bidding, of which 20 successfully received the Ningxia DRC’s approval for a total 1 ,928 MW capacity. On-grid price bidding ranges from 0.37 to 0.49 CNY/kWh. (Ningxia DRC)
Ningxia belongs to a Type IV wind resource area; prior projects would receive a fixed FIT of 0.49 CNY/kWh. Following the new policy issued in May this year, projects now need to bid for approval with a ranking score partly based on the proposed tariff.
SPIC’s CNY 22 billion project starts construction in Jieyang City
The SPIC Jieyang 900MW offshore wind project, phase one of the Qianzhan general offshore terminal and the Jieyang gas power generation project have started construction. The three projects’ total investment is above 22 billion CNY. After a construction period of 4-5 years, the Jieyang offshore wind project is expected to supply 2.7TWh of clean energy to Jieyang city annually. The Jieyang gas power generation project is designed with an annual power generation of 1.3TWh and is planned to start operating in 2021. (Huilai GOV)
China’s biggest offshore WTG shipped to project site
On December 19, Shanghai Electric’s first 7MW offshore wind turbine has been shipped to the Sanchuan offshore project site in Fujian province. This unit is currently the largest offshore wind turbine produced in China so far. (BJX)
The Shanghai Electric 7MW PMDD offshore wind turbine is based on a license from Siemens Gamesa, and Shanghai Electric is also working on production of the SG 8MW-167 offshore wind turbine. Deeper sea, complex soil conditions combined with medium wind resource are driving the race for bigger turbines in China. So far Goldwind's 6.7MW turbine was the largest in China, but a number of OEMs are working on 7-8 MW models.
Local DRC approves 3,000MW of offshore wind capacity for 3 Gorges
As Azure predicted in last week’s (December 10) news report, the Yangjiang government will be approving a series of offshore wind projects before the end of this month. 3-Gorges’ Qingzhou V, VI and VII offshore wind projects with a cumulative capacity of 3,000 MW have been approved by the Yangjiang Development and Reform Commission (DRC) earlier this month. The three projects all plan to deploy 5.5MW and above offshore WTGs. The total investment for all three projects is said to be above 55.3 billion CNY, of which 30% shall be invested as equity by 3-Gorges and 70% as bank financing. (Yangjiang DRC)
Yangjiang City’s Qingzhou offshore area has 7 projects with a total installed capacity of 5,000MW. Of these projects, 60% is led by 3-Gorges, followed by 20% from Yuedian and 10% from Huadian and Mingyang. The Yangjiang City projects closely follow the approval of 7 other offshore projects in Jieyang City, also in Southern China’s Guangdong Province, undertaken by Mingyang, CGN and SPIC. Azure sees the timing of these approvals as Guangdong’s last-minute attempt to help the industry make the best of the existing 0.85 CNY/kWh offshore wind tariff.
Power trading companies can now take seats on South Hebei Power Grid Electricity Market Management Committee
The Hebei DRC has released a notice outlining the composition of South Hebei’s new Power Grid Electricity Market Management Committee. The committee will consist of 26 members who represent market entities such as power grid enterprises, power generation enterprises, power users, power trading companies, trading centers and third-party institutions (including research institutions and independent experts). (Hebei DRC)
The Electricity Market Management Committee is established to ensure the fairness and openness of the electricity market and protect the legitimate rights and interests of market participants. With a more diverse mix of players being represented, Azure believes that China will be pushing power sector liberalization more aggressively. As a result, electricity prices may expected to drop and barriers to inter-provincial electricity trading reduced, which among other benefits can help ease curtailment issues.
CGN 1,200t jackup vessel launched in Guangdong
On December 8, China State Shipbuilding Corporation (CSSC) Guangzhou Huangpu Shipbuilding Co. and China General Nuclear (CGN) launched a 1,200t jackup offshore wind installation vessel which will start operation in early 2019. The platform has a total length of 94.5m, a width of 43.3m, a maximum working depth of 60m and and will be used for installation of offshore wind turbines up to 7MW. (BJX)
China’s first turn-key EPCI offshore wind project begins installation
The Guangdong Yudean Wailuo offshore project is currently undergoing installation and is set to be operating in 2019. The project plans to deploy 36 units of 5.5MW offshore wind turbines with a total capacity of 198MW. The project developer, Yudean, signed a a full turn-key EPCI contract with China Energy Engineering Group Guangdong Electric Power Design Institute Co., Ltd (GEDI), making it the first domestic offshore wind project for which design, construction and commissioning is contracted to one single company, therefore allowing to significantly reduce risk and work load for the project owner. (CEEC)
November report shows 3.6% YOY industry-wide power generation increase
The National Bureau of Statistics has released data on China’s energy production for November 2018. In November, industry-wide power generation was 554.3TWh, an increase of 3.6% year-on-year (YOY). Among this statistic, thermal power generation increased 3.9%, hydropower generation increased 1.5%, nuclear power generation increased 24.7%, wind power generation decreased 9.5% and solar power generation increased 2.5%. The fall in wind power production can be attributed to unfavorable wind conditions in Hebei, Shanxi and IMAR. (Stats)
Local DRC releases Guangdong new bidding mechanisms for offshore wind farms
The Guangdong 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 apply 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 (Guangdong DRC)
Guangdong Zhuhai Guishan 102MW offshore wind farm (Operating)
According to the scope of application of this policy, Azure thinks that multiple offshore projects in Guangdong will be approved within this month. The Guangdong DRC has previously published an opinion on this policy in August earlier this year (Azure news). The policy has not changed much since the draft, and still favors local developers as only references in Guangdong province and China are taken in account. However based on discussions with local governments and players in Guangdong we believe this is an omission rather than a deliberate intention to exclude foreign investors from Guangdong.
Yangjiang DRC approves China’s largest offshore wind farm
CGN’s Yangjiang Fanshi I 1,000MW offshore wind farm has been approved for construction by the Yangjiang DRC. The 1,000MW offshore wind farm surpasses what used to be the largest wind farm in China, the Zhenjiang Xuwen 600MW offshore wind farm, by 400MW, making it now number one. CGN’s Yangjiang Fanshi I 1,000MW offshore wind farm is located south of Yangjiang’s Nanpeng Island in Guangdong Province. The project plans to deploy 5.5MW WTG and feature three 220kV offshore substations. The turbines will be installed in depths of 38m to 50m, and the wind farm will be constructed between 2020 and 2025 with a total investment above 18.8 billion CNY. (Yangjiang DRC)
CGN’s Yangjiang Fanshi I project belongs to the Yangjiang deep-water offshore wind zone II (as outlined in the Guangdong offshore wind development plan). With increases in water depth, floating foundations may have more advantage than the traditional WTG foundations and some of the developpers are interested to test floating technologies. Since November 2018, Yangjiang City has approved 3,300MW offshore wind projects but has more than 5,000MW of pipeline is still under review by the local government. Azure thinks that some of the remaining pipeline will be approved within this month.
6,000MW unsubsidized onshore wind project FSR passes review
The Feasibility Study Report (FSR) for the first phase of SPIC’s IMAR Ulanqab 6,000MW onshore wind project has passed review. The project will be listed in the National 2018 Wind Development Plan and will not be receiving national electricity price subsidies. (SPIC)
Ulanqab has access to Type I wind resources and belongs to the West IMAR power grid. The aim is for the project to sell electricity at the local on-grid price of 0.28CNY/kWh instead of 0.4CNY/kWh like other nearby wind farms that benefit from a feed-in-tariff. However in counterpart, UHV power lines are being build specifically for this wind base which should enable to guarantee close to 100% energy offtake, whereas other nearby projects that suffer from severe curtailment
Taiwan 2025 “non-nuclear home” target fails
A November 30 referendum on abolishing Taiwan’s 2025 non-nuclear target has resulted in the failure of the ruling. Previously, the Taiwanese government proclaimed that Taiwan would stop all operations of nuclear power generation plants before 2025 and replace them with clean energy. On December 2, the act has been declared ineffective. (MOEA)
Taiwan 2025 installed capacity by technology [resource]
Earlier this year, Taiwan approved 5,500MW of offshore wind projects and aimed to have all the projects operating by 2025. The 5,500MW of offshore projects were divided into 3,836MW selected projects and 1,664MW auctioned projects.
China State Grid and Portugal REN sign MOU for cooperation in energy
On December 5 (Portugal local time), under the joint witness of Chinese President Xi Jinping and Portuguese Prime Minister Antonio Costa, China State Grid and Portugal’s national energy network REN signed an MOU at the Cruz Palace in Lisbon to deepen cooperation and development in the energy field. With this framework, the two sides agree to utilize their respective advantages in South America, Africa and Europe, as well as other regions, to explore energy infrastructure cooperation. China and Portugal are to strengthen joint R&D of new energy technology and the exchange of business best practices via specialized personnel visits between the two countries. (CEC)
In 2012, China State Grid acquired 25% of REN’s stock for 387 million EUR and became the company’s largest shareholder.
Yangjiang DRC approves two Mingyang offshore wind projects
The Development and Reform Commission (DRC) of Yangjiang, a city in China’s southern Guangdong Province, has approved two offshore wind projects to be owned and developped by one of the country’s largest private wind turbine manufacturer Mingyang.
Mingyang Yangjiang Shaba 300MW Wind Farm
Mingyang MySE5.5-7.0MW Installation at Xinghua Bay
The Mingyang MySE5.5-7.0MW platform is already being tested at the Three Gorges Xinghua Bay offshore demonstration project in Fujian. The technology is based on the same platform as the Mingyang 5.5MW turbine, and will be deployed in large volume in the Yangjian projects. Interestingly, these projects are being developed by Mingyang which is both private and a turbine manufacturer, which changes from the usual large state owned utilities which dominate most of the pipeline. Mingyang is also setting up a blade manufacturing base in Yangjiang’s High Tech Development Zone with a capacity of 230 blade set per year (with each set being made of 3 blades).
Jieyang DRC approves SPIC Jieyang Shenquan II 350MW project
The Jieyang DRC has reviewed and approved phase two of SPIC’s Jieyang offshore project application. The project will have a total installed capacity of 750MW, divided into two phases, Shenquan I with 400MW and Shenquan II with 350MW. Shenquan I was approved in August earlier this year with plans to install 73 units of 5.5MW WTG. Shenquan II has plans to use 64 units of 5.5MW WTG. (Jieyang DRC)
A large number of big wind farms are being approved in Guangdong this week. This is driven by a strong will from local governments to boost the local offshore wind industry, as well as by a rush to get projects approved this year in order to benefit from the 0.85 CNY/kWh tariff.
Data shows national wind total installed capacity reached 177GW by end of October
The National Energy Administration (NEA) has released data on the national power industry from January to October 2018. The numbers revealed that by the end of October, the national wind total installed capacity was 177.57MW. From January to October, wind utilization hours totaled 1,724 hrs, an increase of 172 hrs from the same period last year. (NEA)
Imports less than or equal to 6MW now required to pay duties and value-added taxes
The Ministry of Finance has decided to revise relevant catalogues of import tax policies for major technical equipment according to the development of the domestic equipment manufacturing industry and its supporting industries in recent years. Among the revisions, it is now stated that imports of technical equipment of less than or equal to 6MW should pay an import duty and an import value-added tax. (MOF)
Imports of major technical equipment and catalogues not exempt from taxes:
What is also suggested by the policy is that whole wind turbine systems of more than 6MW would not be subject to import duty and import VAT (which sum to more than 20%). Maybe an opportunity for foreign suppliers to sell large turbines in China ?
Reports show rapid development in grid side power storage
Since the beginning of this year, China's grid side energy storage has developed rapidly. At present, local governments and power grid enterprises in Jiangsu, Henan, Qinghai, Gansu and other regions are actively deploying grid side energy storage projects. According to statistics from the CNESA global energy storage project library, from January to September 2018, the installed capacity of electrochemical energy storage connected to China's power grid reached 150MW, of which 140MW was newly installed. (People)
Local DRC pre-approves SPIC Zhanjiang Xuwen offshore wind project
The Zhanjiang City Development and Reform Bureau has released a public notice regarding the Zhanjiang Xuwen offshore wind project and is now accepting feedback during the notice period. The project is divided into two phases and has a total planned installed capacity of 600MW. The estimated annual on-grid power for this project is 1.5Twh and the annual equivalent full load hours is 2505h. The project will also involve the construction of 2 units of 220kv offshore substations. (Zhanjiang DRC)
In December 2017, the Zhanjiang government, SPIC and Mingyang Wind Power signed an MOU for the Zhanjiang Xuwen offshore wind project. The agreement stated that:
Q1 ~ Q3 PV newly installed capacity decreases 19.7% YOY
According to the National Energy Administration (NEA), China’s PV power generation newly installed capacity totaled 34.5GW in the first three quarters of 2018, down 19.7% year-on-year (YOY). Among that figure, centralized PV newly installed capacity made up 17.4GW and distributed PV newly installed capacity made up 17.1GW. By the end of September, the national PV total installed capacity was 164.7GW, with 117.9GW in centralized PV and 46.8GW in distributed PV. (NEA)
The chart above represents the percentage of PV newly installed capacity that each region accounts for of the total 34.5GW. The sharp decrease (19.7%) in Q1 ~ Q3 PV newly installed capacity can be seen as a direct result of the “PV 531” policy.
ZSOAF pre-approves CGN Daishan IV offshore wind project sea area use right
On November 13, the Zhoushan Ocean and Fishery Bureau released a public notice for the CGN Daishan IV Offshore Wind Power Project’s (Phase I) sea area use application, giving the public a period of 20 days to voice any objections or hearing requests. The CGN Daishan IV offshore wind farm is planned to have a total installed capacity of 216MW and a total investment of 4 billion CNY. (ZSOAF)
3-Gorges plans to transfer 61% stake in pumped storage power generation company
On November 19, 3-Gorges announced plans to transfer a 61% stake in Hohhot Pumped Storage Power Generation Co., Ltd. for a reserve price of 929 million CNY. The IMAR hydro pump power generation company was established in 2005 with a registered capital of 1.5 billion CNY. As of October 31, 2018, the company’s financial report stated that its operating income was 838 million CNY, total assets were 6.224 billion CNY, and owner's equity was 1.322 billion CNY. (CS)
JHD and Guangxi HOPE sign MOU for waste power battery recycling
On November 20, JHD (Guangdong Guanghua Sci-Tech Co., Ltd) and Guangxi HOPE Automobile Co., Ltd signed an MOU regarding waste power battery recycling. Through the cooperation between the two parties, organic integration of economic benefits, environmental benefits and social benefits can be realized, and a model for the recycling and utilization of power batteries as well as for a circular economy can be established. (Finance Sina)
As evidence of JHD’s commitment to environmental and social responsibility, the company was among the first batch of automobile, motorcycle, three-wheeled vehicle and freight car products and producers approved by the Ministry of Industry and Information Technology (MIIT) based on its Interim Measures for the Management of Recycling and Utilization of Power Batteries of New Energy Vehicles. Additionally, apart from this MOU JHD also signed with BJEV and Skywell (Nanjing Jinlong) to cooperate and advance sustainable development in China.