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Kick-start of competitive FIT for onshore and offshore wind may be delayed
Last week, the National Energy Administration (NEA) held a symposium to solicit opinions on the 2019 wind power construction management measures (NEA) and to discuss previous consultations. According to the information disclosed at the meeting, the wind power construction management measures in 2019 have been intentionally adjusted to balance various factors such as corporate demands, industry development and subsidy gaps. Specifically, the meeting intended to adjust measures for onshore and offshore wind power management, resulting in drafts for comments regarding the following measures:
In the past weeks and months we have seen increasing debate in the industry, between key players and government regulators, trying to reach a common ground for implementation of competitive FIT mechanisms. So far there has been some uncertainty around the exact interpretation of various policies issued over the past year, in the background of which local governments and industry players are pushing to secure as much "tariff pipeline" as possible, whereas the government is trying to limit the subsidy burden. While the final management notice still has to be seen, it is worth noting that we are seeing a key change in eligibility criteria, from "approval date" or "start of construction date" towards "grid connection date", putting even stronger pressure on developers to build their projects as fast as possible.
NDRC releases documents on overcapacity resolution in key areas
NDRC released an official document announcing results of overcapacity control in key areas over the past 2-3 years, mainly focused on steel production, coal mining and thermal power. So far the following capacity reductions have been achieved:
The document then lists out directions for pursuing overcapacity control, including for example closing down of small coal mines (less than 300 tons annual capacity), cleansing of "zombie companies", etc. (NDRC)
In terms of thermal power, there has been a lot of focus on eliminating outdated coal-fired power units that are not up to standard (including coal-fired self-supply units). The National Development and Reform Commission (NDRC) announced that it would clean up and rectify the illegal construction of coal power projects in accordance with the law and strictly control new production capacity of coal power in various regions. In the map above, areas in red and orange illustrate provinces in which new “self-use” coal-fired power projects will not be put into operation.
IMAR DRC approves CGN 3GW subsidy-free onshore wind project
The Inner Mongolia Autonomous Region (IMAR) Xing'an League 3GW Old Revolutionary Base Area Wind Power Poverty Alleviation Project is located in Horqin Right Front Banner and Kerqin Zuoyi Zhong Qi. The total planned capacity is 3GW, of which 1GW will be allocated to Horqin Right Front Banner and 2GW to Horqin Right Middle Banner. (BJX)
With the continuous commissioning of UHV lines, grid offtake in the Sanbei area ("Three North" including Northeast China, North China and Northwest China) has significantly improved, and low-cost large scale wind power projects regions are being launched one after another—we expect to see incremental growth in wind power construction in these regions in the future.
Jiangsu wind installed capacity predicted to exceed 10GW by 2020
Jiangsu Government has released a 3 year construction plan showing key objectives for the province, including the following:
It is clear that the Jiangsu Government recognizes renewable energy as an increasingly important component to ensure energy supply and has already started to adjust its power mix structure.
Jiangsu to accelerate 5G development and technological breakthroughs
The Jiangsu Government has announced efforts to further implement provincial strategy for strengthening networks, accelerating the development of fifth generation (5G) mobile communication networks and enhancing construction and application of the new generation of information infrastructure in the province. Doing so will include accelerating the pace of commercial deployment and breakthroughs in the fields of In-vehicle Networking, Industrial Internet, Internet of Things, Smart Grids and converged media. (Jiangsu GOV)
Azure presents in GWEC Webcast: Doing Business In China’s Offshore Wind Market
Join the Global Wind Energy Council’s (GWEC) Webcast next Monday, May 20 at 10:00 AM CET as industry experts share insights into the current situation of the Chinese offshore wind market, the barriers that new entrants should be aware of and how foreign investors can play a role. Azure CEO Hubert Beaumont will share insights on the market and opportunities at this occasion.Register for the event here: (GWEC)
NEA releases Q1 2019 wind power generation report
From January to March 2019:
During this quarter, the provinces with higher average utilization hours included Yunnan (1078 hours) and Sichuan (1048 hours). The regions that experienced severe wind curtailment included Xinjiang (wind curtailment rate of 15.2%, wind power curtailment of 1.37TWh), Gansu (wind curtailment rate of 9.5%, wind power curtailment of 550TWh) and IMAR (wind curtailment rate of 7.4%, wind power curtailment of 1.30TWh). However curtailment has continued to decrease noticeably compared to previous years.
Changes to PV FIT pricing mechanism
The National Development and Reform Commission (NDRC) has released a notice on improving the current on-grid pricing mechanism for centralized PV power generation. The notice states that the PV FITs for new centralized PV power plants shall follow"guiding prices" of 0.40CNY/kWh, 0.45CNY/kWh and 0.55CNY/kWh (tax included) for resource type I, II and III areas respectively. In principle, the on-grid tariff of new centralized PV power plants should be determined through market competition, and should not exceed the guiding price of the resource area, which therefore serve as a ceiling. This will apply to Centralized PV power plants connected to the grid on or after July 1st 2019. Projects connected prior to this date may enjoy the prices from the "531" policy. (NDRC)
Henan DRC releases data on first batch of subsidy-free wind and PV projects in 2019
According to the report released by the Henan DRC, the 28 projects in the first batch of subsidy-free wind and PV projects have met national requirements. The projects include 11 subsidy-free wind projects with a total of 1.1GW, four subsidy-free PV projects with a total of 274MW and 13 market-oriented distributed power generation pilot projects with a total of 362MW. (Xueqiu)
Fujian DRC releases 2019 major project construction plan
Focusing on the objectives, tasks and overall requirements for accelerating the construction of a strong marine province as determined by the provincial party committee and the provincial government, the Fujian DRC vows to coordinate services such as project construction approval guidance, factor guarantee and implementation management, and to comprehensively support the 148 major projects that are under construction and the 91 that are in the pre-construction phases. The major project construction plan has already made great strides in achieving the completion or partial completion of more than 36 projects, the construction of more than 30 projects and the further planning of a number of major projects. (Fujian DRC)
NEA releases 2022 thermal power plan and construction risk warning
The National Energy Administration (NEA) has released the 2022 thermal power plan and construction risk warning to support decision-making and deployment of structural reforms in the thermal energy sector. (NEA)
The thermal installation margin is a binding indicator that reflects the redundancy of local thermal power installation and power supply. The early warning financial indicator for thermal power construction is a recommended indicator, which reflects the economics of self-use thermal power projects in the province and provides decision-making reference for the planning and construction of thermal power projects.
Mingyang wins bid for 1,400MW of offshore wind projects
Mingyang has won the bid for the procurement of wind turbines for CGN’s Shanwei Offshore Wind Power Project, for a total capacity of 1,400MW, and a total bidding price of 8,602.49 million CNY, which indicates a WTG price of 6,144 CNY/kW. (CGN)
As Goldwind’s bids in the Shanwei Houhu project and Jiazi I & II projects are only 0.55% and 1.25%, respectively, higher than those of Mingyang’s, it can be seen that current bidding for offshore wind turbines is becoming more and more competitive. These prices for ~6MW range turbines are also significantly lower than 1 year ago, when the same turbines were bidding in the 8k range.
Q1 wind power generation reaches 104TWh, increasing 6.1% YoY
By the end of March 2018, China’s total installed capacity reached 1,810GW, which included 310GW from Hydro, 1,010GW from Thermal, 85GW from Gas, 46GW from Nuclear, 190GW from Wind and 130GW from Solar. Between January and March, total power generation reached 1,674.7TWh, a 4.2% increase, and included 104TWh of Wind power generation, a 6.1% increase. (CEC)
HEAG (Huayi) signs an 800MW wind resource development agreement with the Panshi Government
According to the agreement signed by Huayi Wind Energy (HEAG) and the Panshi (Jilin Province) Government on April 24, the former is declared the only resource developer in the development area, which includes Jichang Town, Sanpeng Town, Mingcheng Town, Yantaishan Town, Shizui Town, Baoshan Township, Niuxin Town and Futai Town of Panshi City. Furthermore, Panshi’s Hongqiling Town has invested in the development of wind resources with a total scale of 800MW. (HEAG)
According to the “wind power investment risk warning” released by the NEA, the risk warning for Jilin wind changed from red to green, meaning that curtailment issues in Jilin area been significantly reduced and Jilin has been given the green light to continue developing wind power construction.
Beijing establishes “Belt and Road” energy partnership with 30 countries
On April 25, energy ministers, ambassadors to China and high-level representatives of energy authorities from 35 countries attended the “Belt and Road” energy partnership ceremony in Beijing. The partnership will promote intergovernmental policy exchanges and cooperative intent communication, build a bilateral and multilateral project cooperation and technology exchange platform, and promote pragmatic cooperation in the energy field between the 30 member countries. (NEA)
NEA requires cities to promote winter wind power heating
Following the winter clean heating plan for China’s northern regions (2017-2021) (NDRC), the National Energy Administration (NEA) requires that northern cities complete wind power heating development planning before June 2019. Meanwhile, it will implement corresponding investment subsidy policies for wind power clean heating projects. (NEA)
This solution is being implemented gradually with several objectives: 1. provide an alternative revenue steam for wind farms suffering from heavy curtailment and 2. electrify heat supply in order to reduce the need for CHP plants which are among the key contributors to pollution in urban areas.
NEA releases second batch of “13th Five-Year Plan” PV poverty alleviation projects
The second batch of photovoltaic (PV) poverty alleviation projects of the “13th Five-Year Plan” will be carried out in 15 provinces (districts) and include 165 county PV poverty alleviation projects that comprise of 3,961 village-level PV power stations with a total installed capacity of 1.67GW. The target is to assist 301,773 households in poverty-stricken villages, and all projects should be operating before the end of 2019. (NEA)
Second batch of “13th Five-Year Plan” PV poverty alleviation projects distribution
Shandong shuts down four coalmines of 1.62 million ton annual capacity
Regarding the decision-making and deployment of structural reforms on the power supply side, the Energy Administration of Shandong Province is working towards resolving and preventing overcapacity of coal-fired power generation by shutting down four coalmines that have constituted a capacity of 1.62 million tons in 2019. (SDNYJ)
To put this in perspective, 1.62 million tons of coal allows to produce about 5,500 GWh of thermal power in a year. Closing down these mines thus creates space for roughly 2,800MW of new wind farms on the Shandong grid, where wind produces at an average of 1,971 utilization hours.
Hebei promotes the application of 35,500 new energy vehicles in 2019
The lead department for the Development and Promotion of New Energy Vehicles in Hebei Province has proposed to promote the application of 35,500 new energy vehicles in 2019 and increase the proportion of new energy vehicles used in the public service sector, such as logistics vehicles, school coaches, postal service vehicles, street cleaning vehicles, etc. The department will also support the pilot results of the promotion and application of new energy vehicles in Baoding City and promote the full roll out of new energy vehicles in the main vicinity of the 2022 Winter Olympic Games (in the Zhangjiakou City administrative zone). (Hebei GOV)
CGN and Huaneng Group sign strategic cooperation agreement
China General Nuclear Power Corporation (CGN) and Huaneng Group have signed a strategic cooperation agreement stating that the two sides will carry out specific cooperation in the fields of nuclear power, information technology development, nuclear fuel, finance and nuclear technology. (CGN)
CWEA releases 2018 China wind power installed capacity report
In 2018, China’s total installed capacity reached 209.53GW, of which 21.14GW were newly installed wind power, a 7.5% year-on-year (YOY) increase. Of more than 4GW of offshore wind total installed capacity, 1,655MW were newly installed, a 42.7% YOY increase. On the wind turbine manufacturer side, Goldwind’s newly installed capacity reached 6,707MW, constituting 31.7% of the total installed capacity. Following positions are held by Envision, Mingyang, United Power and Shanghai Electric, the five making up 75% of the sector’s newly installed capacity. (CWEA)
NEA releases subsidy-free wind and PV projects development plan
The National Energy Administration (NEA) has released a development plan for subsidy-free wind and PV projects. The plan highlights:
China’s largest and heaviest offshore wind turbine jacket foundation completes lifting
Contracted to deliver jacket foundations for the Yangjiang Nanpeng Island Offshore Wind Farm Project developed by China General Nuclear (CGN), CCCC Third Harbor Engineering has completed the lifting of the project’s first set of wind turbine jacket foundations last week. With a total weight of over 900 tons, it is the largest and heaviest offshore wind turbine jacket foundation in China so far. (BJX)
Shanghai DRC releases FITs for third batch of 2018 projects
49 PV projects (including two full-scale PV power plants and 47 distributed PV projects, with a total of ~28MW) and 1,250 household PV projects ( with a total of ~9.5 MW) are eligible to receive feed-in tariffs (FITs) from the city’s Renewable Energy and New Energy Development Project Funds for five years. The FIT for PV projects has been raised from 0.25CNY/kWh to 0.55CNY/kWh, while the FIT for household PVs is 0.4CNY/kWh. (Shanghai DRC)
Xiong'an’s first UHV line project to be completed by end of April
The Beijing West-Shijiazhuang 1000kV UHV transmission line is the fourth UHV line in the southern power grid of Hebei Province and the first UHV line to serve Xiong'an. With a total length of 2 × 224km, this project will be of great significance to improving the security and stability of the Beijing-Tianjin-Hebei region and the northern China power grids, meeting the needs of Xiong'an New District's load growth and alleviating the power shortage in southern Hebei. (Xiong’an GOV)
NDRC determines on-grid price for third generation nuclear power technology
In 2013, the National Development and Reform Commission (NDRC), Zhejiang DRC, Shangdong DRC and Guangdong DRC issued a notice that supports the introduction of technology to the first batch of nuclear power units in the provinces. Last week, in conjunction with the provinces’ support for the first three generations (AP1000) of nuclear power projects, the following trial prices of on-grid tariffs have been determined:
Note:The FITs will be put into effect from the projects’ start date until the end of 2021.
NDRC approves transmission price of Guangdong project in Northwestern Yunnan
The transmission price of the DC project in Northwestern Yunnan has been approved at 0.092 CNY/kWh (including tax without line loss); the transmission price of the supporting AC project in Yunnan Province is 0.015 CNY/kWh. The transmission price is determined by income generated from CAPEX, which ultimately depends on the span of distance of the project. (NDRC)
The starting point of the project is located in Dali Prefecture, Yunnan Province. The line runs through Yunnan, Guizhou, Guangxi and Guangdong Provinces, with its endpoint located in Shenzhen, Guangdong Province. With a total length of 1,928 kilometers, it is the longest transmission project of the Southern Power Grid. The project relies on a ±800 kV DC transmission technology with a transmission capacity of 5GW.
SPIC releases final 6GW subsidy free onshore wind project WTG bidding results
Following the close of the recent bidding (refer to Azure’s earlier publication for more details on the bidding process) for SPIC’s 6GW subsidy free onshore wind project, the final results have been released last week: the project site will be located in Siziwangqi, Wulanchabu City, Inner Mongolia Autonomous Region (IMAR), it will require a total investment of 42.544 billion CNY, occupy a planned area of 3,800 square kilometers and reach a construction scale of 6GW. (BJX)
CGN completes trial of 1,200-ton self-elevating offshore wind turbine installation platform
This platform is currently the most advanced of wind power installation platforms in China, classified by the China Classification Society (CCS) as a 7MW and below offshore wind turbine installation. It has a total length of 94.5 meters, width of 43.3 meters and depth of 7.6 meters, a design draft of 4.7 meters, leg length of 91.5 meters and maximum working depth of 60 meters. (BJX)
Beijing-Tianjin-Tangshan power grid absorbs 33.3TWh of local clean energy in 2018
In 2018, total electricity consumption in the Beijing-Tianjin-Tangshan region totaled 372.9TWh, a year-on-year (YOY) increase of 6.33%. Of that total consumption, on-grid electricity produced by local clean energy constituted 33.3TWh, a YOY increase of 13.8%. (BJ-PX)