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Policy: Electric Development Plan of the 13th Five Year Plan published by Zhejiang DRC and NEA
The Zhejiang NEA and DRC released its Electric Development Plan as part of the provincial 13th Five Year Plan. The province plans to install new capacity of 15.2 GW including 13.3 GW of non-fossil energy by 2020, bringing the total installed capacity of the province to 94 GW. Further targets include:
The decreasing installations of new thermal capacity forecasted in Zhejiang's 13th Five Year Plan promotes an increased share of renewables in the province, as the percentage of installed renewable capacity is expected to rise from 40% in 2015 to nearly 50% in 2020.
Source: NEA, Azure International
Solar: Concentrated solar power pilot project list published by NEA
The NEA published its CSP pilot project list. On-grid prices start at 1.15 RMB per kWh and is in effect for 2016 only. So far, there are 20 pilot projects with a cumulative installed capacity of 1.35 GW. The projects are found in Qinghai, Gansu, Hebei, Inner Mongolia, and Xinjiang. The projects include:
Tower-based concentrated solar is the top CSP project to date, mostly because it has a higher startup and construction cost. We expect the other methods to be better suited to smaller scale installations.
Total Installed Capacity of CSP Plants (1.4GW)
M&A: State Grid Purchases Minority Stake in Third Largest Brazilian Energy Generation and Distribution Company
State Grid Corporation of China finalized a 23.6% purchase stake, worth $1.8 billion USD, in the Brazilian energy generation and distribution company CPFL Energia. State Grid worked with the holding company Camargo Corrêa S.A. to close the deal. (BJX CN)
Chinese companies are expanding their control of international companies to increase revenue streams. The 23.6% minority ownership stake gives State Grid an inroad strategy to Brazil, South America's largest economy and a top transmission and distribution grid market. CPFL Energia owns 13% of the total distribution market share and manage over 1.6 GW of generating capacity.
M&A: Shanghai Electric Power Announces Plans to Buy Controlling Stake in Pakistani Utility
Shanghai Electric plans to purchase a 66% stake in Pakistani, K-Electric, a vertically integrated utility of 11,000 employees based out of Karachi. The investment totals $1.6 billion USD and is Shanghai Electric's largest ever investment. (In-En CN)
M&A: China Three Gorges Corporation & State Grid Bidding on Brazilian Hydropower Company
China Three Gorges Corporation and State Grid Corporation are joint bidding on Santo Antônio Energia, the owner and operator of the $7 billion USD, 3.1 GW Santo Antônio Hydroelectric Plant in Western Brazil. The deal may go as high as $3.1 billion USD for a to-be-determined stake. (Deal Street Asia EN)
The weakening Brazilian economy is opening up foreign direct investment opportunities for investors, and China is leading the pack with $4 billion USD year to date. The downturn also is scaring away existing investors, such as Duke Energy, which is selling its Latin America energy assets and has invited China Three Gorges, State Grid, and Brookfield Asset Management to purchase its assets.
Wind: Hebei Delegates Offshore Wind Approval Authority to Municipalities
The government of Hebei announced shifting regulatory approval authority from province- to municipality-level for offshore wind farm project reviews and approvals. The authority includes approving offshore wind generators, undersea transmission cables, and mechanical support structures for wind turbines. Presumably, the offshore wind permitting process will be faster now. (BJX CN)
Presumably, a change from centralized to local control of offshore wind approval should make things more efficient, however, data and analysis from the 2013 Carbon Trust Offshore Wind Report point to a slowdown. Offshore wind projects as of 2013 took around two years to approve. Local governments are less well-equipped to assess wind projects, compared to provincial-level approval processes.
Policy: NDRC, NEA jointly approve Beijing JingJinLi market development plan
The NDRC and NEA approved an electricity reformation plan for the Beijing, Tianjin, and Hebei regions, commonly referred to as JingJinJi. Beijing plans to reduce its reliance on thermal generation sources by a to-be-determined level. One solid data point is to achieve 10% of consumption provided by renewable energy by 2020, excluding hydropower. (BJX CN)
JingJinJi Market Development Power Transmission Plan
Policy: NEA Publishes 2015 National Renewable Development Energy Portfolio
The NEA released a report highlighting the end of year 2015 national renewable energy data. Total installed capacity of all renewable energy sources stood at 480 GW. The installed capacity and annual generation for each resource is shown below.
Total generation figures stand at 1,363 TWh, approximately 24.5% of total power demand. Excluding hydro, however, paints a less rosy picture of 278 TWh and 5% of total power demand.
Power Generation (Outer Circle) and Installed Capacity (Inner Circle) Ratio by Generation Type, 2015 All of China
Source: NEA, Azure International
Statistics: Shanxi government publishes electricity sales price reform bulletin
The Shanxi government published its number 9 reformation document, focused on bringing in electricity competition to the regional market. Companies with over 20 million RMB registered capital can participate. The first payment rate will focus on providing capacity, as it is one of the easiest market transactions to provide, measure, and compensate for. (Shanxi Gov CN)
Requirements for Companies to Join Shanxi Capacity Payments Market
Source: Shanxi Government
Statistics: NEA publishes July energy consumption data
July saw an 8.2% month-on-month increase in energy consumption to 553 TWh, leading to a cumulative consumption of 3,329 TWh for the year to date. Year-on-year, January to July saw a 3.2% increase from 2015 levels. Current installed capacity of energy generation is as follows:
Energy consumption in July is speculated to have increased greatly due to the record high temperatures, reaching a national average of 27.7 ℃, 0.9 ℃ higher than last year. (NEA CN)
Energy Consumption Data by Industry Segment, 2016 January to July