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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Azure International

Tel: +86 10 8447 7053

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E-mail: info@azure-international.com

Solar – China’s Northwest grid operator to make solar plants pay for ancillary services: According to the Northwest grid’s revised ancillary service measures document, which is to become effective on January 1, solar farm owners must pay additional fees based on deviations from their 24-hour forecasts as well as share costs of the region’s ancillary service burden. Solar farm owners will contribute money to a pool to pay for frequency regulation, load following, AGC, AVC, reactive power, power backup and black start services. According to a local developer’s estimates, this new policy will increase the yearly costs for a 10 MW PV farm by RMB 1.2 million. Assuming an annual production of 13200 MWh, this implies an additonnal cost of RMB0.09 per kWh generated, which is 10% of the PV feed-in-tariff (or revenues). Given subsidy payment delays and grid curtailment issues, many projects will not be able to remain profitable after a 10% reduction in revenues. (BJX CN)

Wind – Sinovel averts bond default by selling account receivables: This week, Sinovel narrowly avoided becoming the second company (first was Chaori Solar) to default on a payment in China’s public bond market. On December 23, Sinovel’s board approved the sale of accounts receivable to Fu Haineng Investment and Dalian Huineng Investment for RMB 1.78 billion (US

$286 million). As of December 18, Sinovel had RMB 662 million in capital available for bond repayment, bringing the total capital available to RMB 2.44 billion. According to a statement issued to the Shanghai Stock Exchange by Sinovel on December 28, Sinovel has paid RMB 2.56 billion to buy back notes originally issued in 2011. Sinovel resumed trading on Monday but questions about its future remain. The Chinese  government is looking to allow more defaults in 2015 to rationalize bond market pricing. (Bloomberg EN)  

Solar – PV development rights trading continues despite NEA ban: This week, a reporter from “Nengyuan” magazine reported on the various issues confronting PV development in Southern Xinjiang. A number of local developers interviewed for the story admitted that project development rights are still being traded and speculated upon, despite a NEA ban. Unfair allocation and oversubscription (relative to the local grids ability to absorb generated power) of project development rights is making some developers worry. (BJX CN)

Solar – 655 MW PV for poverty alleviation plan approved for Tongxin, Ningxia: Following the guidance of China’s national PV for poverty alleviation plan, the Tongxin government approved a plan on December 24 to install 655 MW across 22 villages from 2015-2020. The total cost of the project is estimated to be RMB 5 billion. According to an October policy release (see October 28 Cleantech Update) these projects will receive additional subsidies and preferential loans. (BJX CN)

Energy Storage – Shenzhen Baoqing Battery Energy Storage Station commissioned: On December 26, the Shenzhen Baoqing Battery Energy Storage Station, which was funded through the 863 program, was commissioned. The system claims to be the first system connected to a 10KV grid without a transformer. It uses lithium titanate batteries. China Southern Grid Energy Research Institute, Guangdong Electric Power Design Institute, Tsinghua University, Sifang Automation, and seven other organizations participated in the project. This MW-scale project is part of a 10 MW technology demonstration program started in Shenzhen in 2011.  The 863 program is a domestic innovation support program intended to the support development of Chinese core IP. (BJX CN)

Electric Vehicles – NDRC clarifies pricing support for EV charging infrastructure: On December 23, the National Development and Reform Comission issued a “notice” to clarify issues related to its earlier EV policy releases. The policy states that charging facilities located in residential areas will be charged according to local residential electricity prices and that industrial facilities will not have capacity charges. In addition, providers of charging services should charge their customers based on clearly defined local electricity prices and an additional service fee. It is hoped that market competition will drive down service fees. (ChinaSmartGrid CN)

Electric Vehicles – MOF releases policy suggestions calling for EV subsidies to extend through 2020: The document, released on December 26, outlines standards and subsidies to be in effect from 2016-2020. It calls for EV manufacturers to provide a 10-year, 150,000 km warranty for private vehicles and an 8-year 300,000 km warranty for commercial vehicles. It also makes EV manufacturers responsible for battery recycling. The 2016 subsidy for pure EV is from RMB32,000-55,000 based on vehicle range. In contrast, current subsidies are based on the size of the electric vehicles battery in kWh and can reach up to RMB60,000. The document also includes subsidies for fuel cell vehicles. The proposed subsidies are notably racheted, with 10% reductions in 2017 and 2019. (MOF CN)

Gas – China experiencing natural gas shortage this winter: According to official data, demand for natural gas is expected to reach 88 bcm this winter while supply will max out at 82 bcm. This means a 6.2 bcm shortfall. Over the last five years, yearly gas demand has nearly doubled from 90 bcm to 170 bcm. Government forecasts show gas consumption reaching 360 bcm by 2020, of which 67% will be imported. As local governments around China seek to control air pollution by forcing industries to switch coal-fired boilers to natural gas and biomass fired boilers, they become exposed to high price inflation and supply-side risks. This winter illustrates an undersupply trend that may continue for many years to come. (CCTV EN)

Gas – China’s ENN receives first LNG Cargo: According to Platts, ENN received it first imported LNG cargo on December 23. The delivery marks the first time a privately owned company has received a cargo via third party access at an existing terminal. The LNG is being delivered by Texas-based Excelerate, which brokered a deal in October with prices set in the high $12/MMBTU range. ENN is building its own LNG import terminal that is scheduled for completion in 2016. In the meantime, ENN and several other private companies will continue to vie for access to state-owned infrastructure. The Chinese government is strongly supporting private investment in natural gas infrastructure, relieving some of the burden from PetroChina and CNOOC but also creating the potential for price inflation as prices become less regulated. (Platts EN)


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