• China Cleantech Update April 11, 2016

    News Summary:

    • Qinghai power trading center opens 
    • Jilin Energy Board publishes 2016 power generation forecasts and goals
    • NEA releases notice on market supervision priorities for 2016
    • CWEA releases 2015  wind report

    Policy: Qinghai Power Trading Center Open for Business
    Qinghai, a sparsely populated province in the northwest, announced last week that State Grid’s Qinhai division built a power trading platform for electricity sales. The new company is known as Qinghai Electric Power Trading Center, and will be responsible for wholesale electricity trading, overseeing market allocation of power resources, and the sustainable development of the local energy industry. (SGCC CN)
    The shift toward a more flexible power trading model is in line with recent market reforms, and ideally will usher in fairer market pricing structures in electricity sales. 

    Policy: Jilin Energy Administration Publishes 2016 Generation Goals
    The Energy Administration of Jilin Province published its energy generation targets and statistics for 2016. The announcement plan includes priority dispatch of renewable energy resources, namely, wind, biomass, and hydropower. The key data points include:

    • 4.9 GW of power generation under management
    • 6.4 TWh generation
    • Wind average utilization hours: 1,313, compared to 1,430 i n 2015

    Lastly, they will shut down a 25 year-old, 200MW thermal power plant run by Datang, primarily due to the shift in policy supporting less-efficient thermal power plants. (Jilin Gov CN
    Energy administrations are, by law, required to publish year-ahead energy consumption and generation forecasts. 

    Policy: NEA Announces Market Supervision Policy
    The NEA released a notice on its market supervision policy for 2016, put forward to strengthen the supervision of both renewable energy utilization. The policy consists of 26 points. Some highlights include:

    • improve utilization hours of renewable energy,
    • price reform on oil, natural gas, and coal,
    • online access to apply for and be approved for special market permits,
    • improved power grid scheduling with open trading and regulation,
    • an increased emphasis on pipelines and natural gas specifically, and
    • develop an online database of best practices and expert white papers. (NEA CN)

    Due to a number of political and economic concerns, there is a growing importance being placed on the actual utilization of renewable energy resources. While developers continue to add wind and solar capacity at unprecedented rates,  grid connection and energy utilization are two pressing concerns that the NEA is beginning to address more aggressively. Azure is able to model and forecast curtailment levels of wind and solar projects at the provincial level.

  • China Cleantech Update April 19, 2016

    News Summary:

    • NDRC approves new program to address renewable energy oversupply 
    • NEA increases promotion of  public-private partnership projects in energy industry
    • First quarter 2016 electricity consumption data released
    • Electric vehicle sales up 107% in first quarter of 2016

    Renewables: NDRC Approves New Program in IMAR, Gansu, Jilin Provinces to Address Renewable Energy Oversupply
    The NDRC announced and approved a new program to address the oversupply and underutilization of renewable energy in IMAR, Gansu, and Jilin provinces. Gansu province, with an annual electricity consumption rate of 110 TWh, has a 60 TWh oversupply of power generation. Inner Mogolia, with 104GW total installed capacity, has 10GW more thermal power generation than needed in the West, and 6GW excess thermal power generation in the East. Lastly, Jilin province, with 70.4TWh annual generation, produces 40 TWh excess capacity annually. 
    To address this oversupply, the NDRC is testing a pilot program that expands electricity demand, improve grid connection infrastructure, and also improves distribution grid policies to encourage renewable energy utilization. (NDRC CN)
    The excess capacity, poor grid connection, and a number of other factors all lead to high renewable energy curtailment rates in these provinces. Apparently, the NDRC is testing the waters with how an increasingly open power market will impact curtailment rates and other grid inefficiencies.

    Source: NDRC, Azure International

  • China Cleantech Update April 27, 2016

    News Summary:

    • NEA publishes Q1 solar curtailment rates
    • Jiangsu province to add 900MW wind in 2016
    • NEA publishes Q1 power generation utilization hours 
    • NDRC and NEA release coal production capacity metrics
    • Chongqing government releases guidance on electricity price reform

    Solar: NEA Publishes Q1 2016 Solar Curtailment Rates
    First quarter solar installed capacity and curtailment figures were published last week, and levels are high for some provinces. Nationally, 7.2GW of new solar was installed, raising the total installed solar installed capacity to 50.3GW by the end of the quarter. In the first quarter, total solar power generated was 11.8 TWh, and 1.9TWh of solar power was curtailed, or about 14%. Provinces with the worst curtailments are:

    • Gansu, 0.84TWh curtailed, 39% of total
    • Xingjiang, 0.76TWh curtailed, 52% of total
    • Ningxia, 0.21 TWh curtailed, 20% of total. (NEA CN)

    Severe wind curtailment has been a known risk for years, but investors in solar were hoping that integration of PV would be easier, given lower penetration levels and a good match between resource and energy demand patterns. Last year, Azure started to warn that our models also predicted the emergence of PV curtailment in certain regions, which is now being confirmed on the ground. We advise investors to assess PV curtailment risk as part of normal due diligence, as curtailment is set to become the most significant factor in off-take risk for PV projects going forward.

    Source:Gansu PV

  • China Cleantech Update August 02, 2016

    News Summary:

    • First half 2016 generation utilization hours published
    • Coal reduction reforms announced 
    • First half 2016 Jilin energy utilization rates published
    • Gansu strikes 1 billion RMB deal to integrate wind and 400MW storage
    • NEA publishes Dongbei electricity 2020 roadmap 
    • IMAR renewable energy generation January to May 2016 data released
    • Q1 to Q2 China energy consumption data release

    Data: First Half 2016 Power Plant Utilization Hours Published
    The NEA published the first half of 2016 utilization hours for power plants at the 6MW and above installed capacity. Average utilization hours for all power plants was 1,797 hours, a decrease by 137 hours (about 7%) from 2015 levels in the same time period. The table below summarizes the total installed capacity and utilization hours for the first half of 2016 and change relative to 2015 levels. (NEA CN)
    While the average decreased, the utilization hours per province varies greatly. Yunnan and Sichuan provinces, for example, were at 1,441 and 1,377 hours, respectively. Due to the major difficulties integrated wind, lower user demand, and lack of sufficient transmission capacity, Xinjiang, Gansu, Jilin, and Ningxia provinces all had less than 680 utilization hours. Gansu is aware of this situation and, as discussed later, is attempting to increase utilization hours with a storage plant solution. 
    Table: First Half 2016 Utilization Hours for 6MW+ Power Plants

    Source: NEA 

  • China Cleantech Update August 18, 2016

    News Summary:

    • State Grid forecasts 3.5% bump in consumption
    • Shaanxi solar cell manufacturing increases 85%
    • China Longyuan Power announces 11.2 billion CNY in 2016H1
    • China Shenhua announces 0.8 billion CNY in 2016H1


    Statistics: State Grid Forecasts 3.5% Rise in National Electricity Consumption
    State Grid announced a forecast increase of 3.5% in energy consumption levels for 2016 compared to the previous year. The first half of 2016 saw 2,780 TWh of demand, an increase of 2.7% over 2015. State Grid believes total consumption for 2016 will be up to 5,770 TWh. New installed capacity for 2016H1 include:

    • 27.1 GW thermal of 54 GW planned
    • 5.7 GW wind of 34 GW planned
    • 17.6 GW solar of 27 GW planned
    • 4.4 GW hydro of 11 GW planned
    • 2.2 GW nuclear of 4.9 GW planned

    The top contributors of new capacity growth are from the following regional grids:

    • 25% from Huabei
    • 23% from Xibei
    • 15% from Nanfang
    • 13% from Huadong
    • 10%, 8%, and 6% from Huazhong, Donbgei, and Xinan (SGCC CN)

    Typical growth is not typical in China — there have been consecutive growth years in the 10%+ range, followed by either a single digit contraction or flat growth. 3.5% is an aggressive growth number for an established energy base, however, for China, this is still a healthy level and we'll need a few more years of data to see if 3.5% represents the new normal. 
    Distribution of New Installed Capacity for 2016

    Source: SGCC, Azure International


    Source: SGCC, Azure International


    Source: SGCC, Azure International

  • China Cleantech Update August 24, 2016

    News Summary:

    • Shanxi government publishes electricity sales competition bulletin
    • NEA publishes July energy consumption data
    • China Electricity Council publishes January to June energy consumption data
    • Hunan publishes July energy consumption data

    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:

    • Thermal: 1,021 GW
    • Hydro: 282 GW
    • Wind: 138 GW
    • PV: 44 GW
    • Nuclear: 31 GW

    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


    Source: NEA


    Source: NEA 

  • China Cleantech Update February 02, 2016

    News Summary:

    • 152MW Jiangsu offshore windfarm gets partial grid connection
    • Chinese firm gets another EPC project in Africa
    • 2015 annual power plant utilization hours released
    • Inner Mongolia company signs 300MW wind farm development agreement

    Offshore: China General Nuclear Connects Part of 152MW Offshore Wind Farm
    China General Nuclear, the largest nuclear power operator in China, achieved grid connection for six of its 4MW offshore wind turbines. The Jiangsu Rudong 152MW offshore wind farm is 10km from shore, while water is at a maximum depth of 10-15 meters. (Xinhua CN)
    CGN plans to connect 38 4MW offshore wind turbines using simple monopile foundations.  The 152MW offshore farm is forecast to produce 400GWh of power annually, equivalent to a coal power plant using 131kt of standard coal which would emit 267kt of CO2.  

    Figure: A monopile offshore wind turbine.

  • China Cleantech Update February 18, 2016

    We hope you all had a great Spring Festival! In lieu of news this week, we came up with this nice infographic, summarizing key China energy statistics from 2015. Enjoy!


  • China Cleantech Update March 03, 2017

    News Summary:

    • Wind project approvals halted for six northern provinces
    • 2016 IMAR power generation summary published by statistics bureau 
    •  Preliminary construction begins on biomass power plant in Guinea-Bissau

    Wind: NEA Issues 2017 Wind Investment Monitoring and Warning Results
    The NEA recently published monitoring and warning results for wind investment in 2017. Most important is the red-listing of six major wind producing provinces, which prevents project approvals for new wind power projects. The affected provinces are: Xinjiang, Gansu, Ningxia, Inner Mongolia, Jilin and Heilongjiang. The NEA document also encourages a greater and concentrated effort for wind investment in the greater Jing-Jin-Tang area, which borders the red-listed provinces. (NEA CN)

    Map of Regions where Wind Power Project Approvals Are Halted (Red)


    Source: Azure International, NEA

    Authorities continue to struggle with high curtailment rates in many provinces due to significant installed capacity, low power demand, or transmission bottlenecks constraints. The red-listed provinces account for over 76 GW, 51% of total wind capacity in China. Individually, the affected provinces all experienced high levels of curtailment in 2016, with Inner Mongolia (21%), Jilin (30%), Heilongjiang (19%), Gansu (43%), Ningxia (13%), and Xinjiang (38%). The intent of the temporary ban on project approvals is to  push project development southward. The halt corroborates with the trend to push wind power development away from Northern areas and towards the South.

  • China Cleantech Update May 05, 2016

    News Summary:

    • NEA publishes Q1 2016 wind power generation data
    • Tibet begins construction on first 1GW+ hydro power plant
    • Hebei province approves Zhangjiakou 6.8GW phase three wind power base
    • Xinjiang pilots new retail-side electricity purchase program


    Wind: NEA Posts Q1 2016 Wind Power Generation and Curtailment Data
    The NEA announced wind power data for the first quarter 2016. Total new wind installed capacity was 5.3GW, raising the cumulative total installed wind capacity to 134GW. Total wind power generation for the quarter was 55.2 TWh, and a staggering 19.2 TWh of wind power was curtailed. Key high curtailment regions, by absolute percentage, were:

    • Jilin: 1.2 TWh curtailed, 53% of total, 224 utilization hours
    • Xinjiang: 2.9 TWh curtailed, 49% of total, 189 utilization hours
    • Gansu: 3.2 TWh curtailed, 48% of total, 294 utilization hours
    • Ningxia: 1.1 TWh curtailed, 35% of total, 264 utilization hours (NEA CN)

    The Northern regions — western, central, and eastern — are both major wind resource and wind curtailment zones. The map below highlights the curtailment levels by province. These areas are low population, high installed capacity areas, where power needs to be exported or else it is underutilized. Azure provides curtailment modeling and consulting services to forecast curtailment levels in the future.
    Q1 2016 Wind Power Curtailment Levels by Province

    Source: NEA, Azure International


  • China Cleantech Update May 25, 2016

    News Summary:

    • Shandong province publishes 2016 wind power plan
    • NEA publishes March 2016 energy consumption statistics
    • NEA responds to flooding and hydropower curtailment issues in central China
    • Hebei plans to expedite Chengde, Hebei phase two wind power plant


    Wind: Shandong DNC Publishes 2016 Wind Power Development and Construction Agreement
    The Shandong DNC published its 2016 wind power development and construction plan, focused on the cities of Yantai, Dezhou, Binzou, and Qingdao. The government is following up on nationwide capacity plans the NEA published in March,  requiring Shandong to build 3.3GW new wind power in 2016. The chart below highlights the highest wind penetration regions in Shandong province. (Shandong Gov CN)
    Current Installed Capacity in Shandong province, as of May 2016

    Source: NEA, Azure International
    Azure maintains a database of historic, planned, approved, and in-construction wind farms across China, and is able to help forecast future wind power penetration and curtailment rates at the provincial level.