Welcome to Azure International

Azure International is a leading investment and advisory company focused on China's cleantech energy sector. Founded in 2003, we have a team of 20+ local and international professionals based in China with backgrounds in engineering, marketing, manufacturing, consulting, policy, government relations and finance. In addition to deep advisory capabilities in renewable energy, energy efficiency, carbon management, and energy finance, we have proven capability to invest in and accelerate the development of clean energy companies.  Our portfolio and partner companies have achieved both significant commercial success and returns to investors. Azure provides the necessary expertise and execution capabilities in China to lead relationship development with government and strategic partners, project execution, sourcing, sales and technology development – all with deep understanding of Chinese and international requirements.

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E-mail: info@azure-international.com

Battery – New MIIT policy could spur massive wave of lithium ion battery industry plant closures and consolidation: On December 12, the Ministry of Industry and Information Technology released “Lithium Ion Battery Industry Scoping Conditions,” for which it is currently soliciting industry feedback until December 20.

Although the policy claims environmental protection as one of its main goals, it has strong implications for consolidation within China’s lithium ion battery supply chain. The policy sets the minimum yearly manufacturing capacities for battery and component manufacturers:

  • Assembled lithium ion batteries >100MWh
  • Cathode materials >2000 tons
  • Anode materials >2000 tons
  • Membrane >20 milion square meters
  • Liquid electrolyte >2000 tons
  • Solid electrolyte >500 tons

Moreover, the previous year’s manufacturing utilization must be greater than 50% of the plant’s stated capacity.

Read more: China Cleantech Update December 16, 2014

Policy – NDRC releases progress update on Twelfth Five-Year Plan energy efficiency targets: The NDRC recently surveyed progress towards meeting 12-5 energy efficiency targets based on provincial energy consumption during the first 10 months of 2014. Fujian, Qinghai, Xinjiang, Hainan and Ningxia showed energy consumption well above their target levels, meaning it will be very difficult for them to meet their 2015 goals if current trends continue.  Many other provinces, including Shanghai and Beijing, showed some risk of missing their targets. Local government officials are judged on their ability to meet national targets and currently failing provinces will likely take strong proactive measures. To meet 11-5 energy saving targets (2005-2010), many provinces forced factories to close or drastically reduce consumption during the final year. Encouraging rapid adoption of energy efficient technologies would be a more effective approach. (NDRC CN)

Electric Vehicles – Chinese government to phase out pure electric bus development: Reversing its previous stance, the Chinese government will now largely abandone its electric bus development plans. This is according to the Director of the National “863” EV Development and Battery Testing Center WANG Zidong. At a conference last week, he cited high infrastructure and maintenance costs as the drivers for this change. For example, Beijing invested

Read more: China Cleantech Update December 09, 2014

Solar – China will not make its 2014 solar target according to leading researchers: Last week, Director General of China’s National Center for Climate Change Strategy and International Cooperation announced that China will likely miss its 2014 of 14 GW newly installed capacity. Mr. Li estimates that 12 GW is more likely and that the actual number could be as low as 10 GW once grid interconnection delays are taken into account. In addition, Wang Sicheng of the NDRC Energy Research Institute estimated that China’s 2014 installations will reach only 10 GW, citing several distributed PV development challenges.


Installed PV Capacity Through Q3 2014 and 2014 Targets According to NEA

Source: NEA, Azure International

Azure has been closely following PV market developments. Despite the fact that less than 35% of

Read more: China Cleantech Update December 02, 2014

Policy – State Council releases Energy Development Strategy Action Plan (2014-2020): The PRC State Council released its vision for the future of China’s energy development on November 19th. Building upon earlier policy goals, the State Council calls for primary energy consumption to be limited to 4.8 billion tons of standard coal equivalent in 2020, implying a 3.4% CAGR. Coal consumption will be limited to 4.2 billion tons (equivalent to 2.98 tons standard coal), implying a 2.2% CAGR from 2014-2020. In line with previous goals, hydro, nuclear, wind and solar installed capacity targets for 2020 are 350 GW, 58 GW, 200 GW and 100 GW respectively. Energy storage is mentioned in this plan, appearing under the “9 focused innovation fields” and “20 significant improvement sections.” (GOV CN)

Policy – State Council eliminates six regulatory approvals related to energy market: On November 23, the PRC State Council released a sweeping list of administrative approval cancellations and adjustements touching all aspects of governance. With respect to China’s electricity market and operation, six approval processes covering issues like inter-provincial transmission pricing were eliminated. These changes will enable greater electricity market reform and marketization. (GOV CN)

Policy – Central bank interest rate cuts are good for RE project investment: China Central Bank’s decision to cut the one-year ad five-year lending rates by 40 basis points to 5.6% and

Read more: China Cleantech Update November 25, 2014

Policy – U.S.-China Joint Agreement on Climate Change: President Obama of the U.S. announced a new target to cut net greenhouse gas emissions 26-28 percent below 2005 levels by 2025.  At the same time, President Xi Jinping of China announced targets to peak CO2 emissions around 2030, with the intention to try to peak early, and to increase the non-fossil fuel share of all energy to around 20 percent by 2030. Interestingly, China’s population is also set to peak around 2030. (WhiteHouse EN)
 
Policy – U.S.-China Joint Agreement on Clean Energy Cooperation: It was also announced that the Clean Energy Research Center (CERC) mandate will be extended for an additional five years, from 2016-2020. Funding will be used to support four areas of  research: building efficiency; clean vehicles; advanced coal technologies and carbon capture, use and sequestration (CCUS); and the interaction between energy and water. (WhiteHouse EN)
 
Policy –RE Subsidy delays for China’s Big Five generation companies tops US$1 billion: According to

Read more: China Cleantech Update November 18, 2014

Policy – NDRC to encourage greater foreign investment in cleantech: On November 4th, the government released a draft version of its “Foreign Investment Catalogue,” which lists industries open to foreign investment. When compared with earlier versions of the policy, this draft is considerably more open. The number of sectors where foreign companies are required to form JVs with Chinese majority stakes was reduced from 79 to 35. Clean coal products, tidal current energy, wastewater treatment and the operation of power grids (controlled by Chinese) were all included in the encouraged industry list. (NDRC CN)
 
Policy – NDRC releases national plan for addressing climate change: On November 4, the National Development and Reform Comission released its plan for addressing climate change from 2014 to 2020. This comprehensive document provides the following2020 installation targets for clean generation technology: hydro power 350 GW,  nuclear power 58 GW, wind power 200 GW, solar power 100 GW and biomass 30 GW. The plan also calls for natural gas to make up more than 10% of energy consumption with annual consumption projected to exceed 360 bcm in 2020. (NDRC CN)
 
Policy – NDRC announces transmission and distribution separation pilot in Shenzhen: The separation of transmission and distribution assets, which has been a policy goal since electricity market liberalization began in 2002, is finally being tested through a pilot project in Shenzhen, China. The goal of this project is to treat transmission and distribution separately in order to improve supervision and regulation as well as realize greater marketization. Similar to many international markets, the cost of transmission and distribution services will be based on a cost plus approved profit margin scheme. The pilot is scheduled to run from Jan. 1, 2015 to Dec. 31, 2017 in Shenzhen, which falls within China Southern Grid’s operation territory. (NDRC CN)
 
Policy – NEA expects solar and wind price parity by 2020: At a press conference during the APEC event in Beijing, the National Energy Administration outlined its vision for the future of China’s grid. By 2020, the NEA expects that large-scale wind energy prices will be at the same level as wholesale coal-fired power tariffs and that PV energy prices will be at the same level as retail electricity tariffs. (RED CN)
 
Energy Storage – Samsung SDI and Sungrow Power to build ES plant in China: Samsung SDI and PV inverter manufacturer, Sungrow Power Supply will build and operate a lithium-ion battery energy storage plant in China for the supply of energy storage systems in the country. Investors have responded positively to the news, with both company’s stock making gains since the cooperation signing on November 4th. Azure International was proud to serve as Samsung’s strategic advisor for this JV, providing in-depth market analysis, partner shortlisting and initial introductions. (PVTech EN)
 
Wind – Mingyang installs 6.5 MW, two blade offshore wind prototype: After more than a year of delay, Ming Yang announced the completion of its 6.5 MW offshore wind turbine prototype. The prototype is located off the coast of Jiangsu and features a unique gearbox and PMMD design as well as a two-bladed turbine to deal with typhoon conditions. (WindPowerOffshore EN)
 
Wind – China cuts offshore wind target by two-thirds: According to  a recent release by the National Energy Administration, China’s new 2020 target for offshore wind is now 10 GW. The NEA’s 2011 generation plan originally called for 30 GW by 2020. Offshore wind projects have been plagued by higher-than-expected costs and grid connection issues. (EcoBusiness EN)
 
Solar – Shanghai releases distributed PV management policy: Similar to many other cities in China, the Shanghai Development and Reform Comission released management policies aimed at clarify processes for project application, measurement and subsidy redistribution. (BJX CN)
 
Wastewater Treatment – Veolia and TIS announce JV and initial projects: Veolia announced two 30-year contracts worth US$497 million for supplying wastewater treatment facilities to China’s largest Steelmaker, Tangshan Iron & Steel (TIS) at its manufacturing sites in Hebei, Beijing’s neighboring province. Veolia will provide a wastewater treatment and water recycling facility for a coking plant and a gas liquefication plant. To meet stricter emissions standard, many manufacturers will likely consider gasifying coal and biomass feedstocks. However, gasification is much more water intensive, so water treatment will be necessary to limit consumption in China’s numerous water-scarce regions. (EnvironmentalLeader EN)
 
Gas – China and Russia announce MOU for second major natural gas pipeline: On November 9, President Xi Jinping announced a new agreement with Russian President Vladamir Putin for a second major natural gas pipeline into China. A memorandum of understanding was signed between Gazprom and CNOOC. They are currently in discussions for supplying 30bcm/yr through a Western pipeline (Altai project), which could rise to 100bcm/yr. Gazprom and CNOOC already signed an agreement in May for an Eastern pipeline that will supply 38bcm/yr at an average cost of US$9.94/MMBtu. Greater availability of natural gas may enable more natural gas-fired generation, which is badly needed to meet growing demand for peak generation. However, suitable market structures and transmission pipelines still need to be developed. (InterFax Energy EN)
 
Gas – GE and Huadian JV manufactures first aeroderivative gas turbine: The LM6000-PF aeroderivative turbine, manufactured by HDGE is one of the most advanced turbines in the world. HDGE just completed the manufacture of its first unit, which  will be used in the Tianjin Beichen Wind Power Industrial Park. The combined cycle plant will also provide district heating and is expected to have a net efficiency of 75-85%. Unlike coal, natural gas in China is expensive and undersupplied, pushing the need for highly efficient generation technologies. (Whatech EN)

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