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CSIC receives government funding for floating wind demonstration
The Ministry of Industry and Information Technology (MIIT) has recently publicized “Development of Offshore Floating Wind Power Equipment,” a proposed research project of China Shipbuilding Industry Corporation (CSIC). The project is designed to explore the development of high-tech ships and high-power offshore floating wind power by carrying out research on key technologies and overall design of offshore floating wind power equipment, manufacturing, commissioning of mooring systems and applications at sea. (BJX)
With the project encompassing efforts to implement the “Made in China 2025” plan, promote the implementation of strategic emerging offshore engineering projects and improve the level of R&D and design of high-performing equipment in China, it is clear that China is looking to increase self-reliance by promoting large-scale domestic production. Currently, few foreign firms have development rights in China, but it is interesting to note that in late 2018 China seemed more open to the idea of using foreign aid to speed up development in deep-sea wind power. This could be due to prospects that the new policy effective January 1, which subjects all large-scale wind farm development to power price competitive bidding, will put a greater emphasis on the need for cost reduction.
PetroChina to build 23 new natural gas storage facilities by 2030
According to China Petroleum News, China National Petroleum Corporation (CNPC) and relevant oil and gas enterprises gathered in Beijing on January 9 to discuss PetroChina’s 2019-2030 underground gas storage construction and deployment plan. There, the various parties signed an agreement that delegated responsibilities accordingly, and it was disclosed that PetroChina would expand ten natural gas storage projects and build 23 new ones by 2030. (The Paper)
From the winter of 2017 to the spring of 2018, tight supply of natural gas in China raised concerns about insufficient domestic gas storage capacity. According to international standards, the working volume of underground gas storage must exceed 12% of consumption if dependence on natural gas reaches or exceeds 30%. In 2017, the country’s natural gas dependence was close to 40%, and in 2018 exceeded 40%, but its gas storage capacity was far from meeting the standards. China’s geological conditions pose the greatest challenge to building large-scale economical and efficient natural gas storage facilities.
Shaanxi DRC releases direct electricity trading results
The Shaanxi Development and Reform Commission (DRC) has released the results for the direct electricity trading between centralized heating users in Shaanxi Province during the winter of 2018-2019. On October 26, 2018, the committee organized 16 direct-transmission power generation enterprises, 33 power sales companies and 412 users to participate, resulting in a total electricity turnover of 1.05TWh (0.329TWh in 2018 and 0.676TWh in 2019). Within this number, 0.889TWh is attributed to industrial and commercial users, and 0.107TWh to other industries. The average transaction price for industrial and commercial users was 321.4CNY/MWh, making the average price difference from other industries 23.45CNY/MWh. (Shaanxi DRC)
Note that this list of participants is not exhaustive and represents only a small sample from the experiment. We present this table to demonstrate how thermal power plants are still the major players in direct electricity trading.
As Azure had previously forecasted, while the direct power trading mechanisms introduced over the past few years were initially expected to have a positive impact in helping integrate clean energy, it is more likely that large coal power plants will continue to dominate the market in the beginning. As we can see from this experiment, the majority of direct electricity traded was still coal-generated electricity.
Shanghai Temple-Shandong ±800kV UHV DC line starts operating
On January 11, the Shanghai Temple-Shandong ±800kV UHV Direct Current (DC) project, conducted by State Grid Shandong Electric Power, successfully completed 168 hours of trial operation. The UHV DC line passes through Inner Mongolia, Shaanxi, Shanxi, Hebei, Henan and Shandong provinces over a total distance of 1,230km at a rated transmission capacity of 10GW. At present, only two UHV lines, in Weinan and Qingzhou, have a full-load transmission capacity as high as 20GW. (BJX)
Jiangsu DRC approves 24 offshore wind power projects
On December 28, 2018 the Jiangsu DRC approved 24 offshore wind power projects with a total installed capacity of 6,700MW and a total investment of 122.3 billion CNY. (Offshore wind)
The news comes right after the NEA’s announcement that projects approved in 2019 will be subject to competitive on-grid price bidding, and can be seen as local governments’ last-ditch attempts to obtain feed-in tariffs (FIT). The FIT price was not stated, so it is unknown whether or not these projects will actually be receiving them.
CGN Baolihua Shanwei Houhu Offshore Wind Project begins construction
The project is to have a total installed capacity of 500MW with an investment of 8.4 billion CNY. The project plans to deploy 91 units of 5.5MW offshore wind turbines with annual power generation of 1.4TWh. This project aims to be operating before the end of 2021. (Shanwei News)
This offshore wind project is co-developed by Baolihua (000690.SZ) and CGN. For more details, please see Azure’s December 24 news publication.
World’s first ±1100kV UHV DC line to start operation soon
The world’s first ±1100kV UHV Direct Current project, extending from Changji (Xinjiang Province) to Guquan (Anhui Province), has entered the final inspection stage. With a total investment of 40.7 billion CNY, the UHV line spans across six provinces (Xinjiang, Gansu, Ningxia, Shaanxi, Henan and Anhui) overa total distance of 3,3293km. The project started construction in January 2016; after completion, it is planned to send 66TWh of power to China’s eastern regions annually. (Xinjiang daily)
Henan Power Grid 100MW Battery Energy Storage Demonstration Project begins operating
All 16 energy storage power stations of the Henan Power Grid 100MW Battery Energy Storage Demonstration Project were completed and put into operation. China has taken an important step in the standardization and scaled construction of grid-side distributed energy storage power stations.The construction scale of the project is 100.8MW/125.8 MWh, with a total of 84 battery containers. (CEC)
Five State Grid pumped hydro energy storage stations start construction concurrently
Five pumped hydro energy storage stations, located in Hebei, Jilin, Zhejiang, Shandong and Xinjiang, have begun construction concurrently and are set to operate at 6,000MW capacity by 2026. The PHES stations have a total investment of 38.7 billion CNY. The construction of these stations is conducive to ensuring safe operation of the power grid and facilitating integration of other sources ofclean energy. (CEC)
First turbine of Datang Binhai offshore wind farm successfully connected to grid
The first turbine of the Datang Binhai 300MW Offshore Wind Power Project was successfully connected to the grid. This project began construction in July 2018. On December 29, the first turbine circuit installation and 35kV submarine cable laying work were successfully completed. (BJX)
Hebei Government approves Xiongan New Area (2018 – 2035) comprehensive plan
The State Council, China’s cabinet, recently approved the comprehensive development plan (2018-2035) for Xiongan New Area, a guideline for developing the region based on international standards with Chinese characteristics. The plan outlines the need to build a green low-carbon city, to optimize energy structures, to build green power supply systems and clean and environmental-friendly heating systems and to promote local renewable energy utilization. (GOV)
Fujian DRC releases new bidding mechanisms for offshore wind farms
The Fujian Development and Reform Commission (DRC) has drafted new measures for competitive bidding of offshore wind power projects within the province in an attempt to promote efficient development of offshore wind power and technology, industrial upgrading, as well as market-oriented development. The measures are currently being implemented in a trial period and applied to select projects as detailed below.
Scope of application:
1. Projects approved before 2019 – FIT (0.85CNY/kWh)
2. Projects with determined investment entities and approved after 2018 will be subject to competitive on-grid tariffs and development rankings
3. Projects that have not yet determined investment entities before May 18, 2018 will be required to determine the investment entities and will be subject to competitive on-grid tariffs and development rankings (Fujian DRC)
Fujian Xinghuabay offshore wind project
Looking at Fujian’s new bidding mechanisms for offshore wind farms, it seems that the lack of requirement for developer references but increased requirements for offshore wind turbine suppliers have leveled the playing field for foreign investors. As for on-grid pricing, it seems that the Fujian DRC favors excessive competition over proposed on-grid prices.
Yudean Zhenjiang Wailuo Offshore Wind Farm II begins construction
On December 26, the commencement ceremony for phase two of the Yudean Zhenjiang Wailuo Offshore Wind Farm was held in Guangdong’s Xuwen County. The project is to have a total installed capacity of 203.5MW with an investment of 3.8 billion CNY. The project plans to deploy 37 units of 5.5MW offshore wind turbines with annual power generation of 484GWh. (Xuwen GOV)
The Yudean Zhenjiang Wailuo Offshore Project was divided into two phases. The first phase of the project oversaw a total installed capacity of 198MW and completed its first offshore wind turbine installation in December 2018.
Xinjiang 1,200MW pumped hydroelectric energy storage project approved
The Xinjiang Hami 1,200MW pumped hydroelectric energy storage project has been approved by the local DRC. This project is located Northeast of Hami City with a distance of 66km to shore. The project will have a total installed capacity of 1,200MW distributed in four energy storage units of 300MW each. The project will have an investment of 8.2 billion CNY with an annual power generation of 1.4TWh. (XJDRC)
The project involves the construction of two reservoirs. The upper reservoir collects snow from Tian Shan (mountain range) and discharges water into the lower reservoir. The water from the lower reservoir is then pumped into the upper reservoir to generate electricity. Due to the large amount of wind power generated by Hami City at night, the power station can use the unutilized wind power to pump water to the reservoir during the nighttime so that the water can drain in the daytime. (SINJIANGNET)
Yunnan “West to East” electricity capacity to reach 39GW
Following implementation and acceleration of the Kunliulong ±800kV and Lancangjiang 500kV projects, Yunnan’s “West to East Power Transmission” project is also said to speed up construction for completion by 2020 with electricity capacity reaching 39GW. (CEC)
Kunliulong ±800kV project
Since the transmission of electricity to Guangdong and Guangxi in 1993, it has accumulated 800TWh. Yunnan’s installed capacity for power generation jumped from 1.3GW in 1978 to 93.2GW by the end of October 2018. The proportion of clean energy installed by hydropower accounted for more than 82.7%, becoming an important green energy base and power transmission base for the “West to East” project.
China's first 100MW scale solar thermal power station successfully put into operation
The first-class, energy-saving Dunhuang 100MW molten salt tower type solar thermal power generation demonstration project has been successfully put into operation. This project’s total investment is above 3 billion CNY. According to the requirements of the National Energy Administration (NEA) on the grid connection time of the first batch of demonstration projects, the project will have a FIT of 1.15 CNY/kWh. (cnenergynews)
China offshore 2018
As 2018 comes to an end, Azure has put together a comprehensive review of China’s offshore wind status. By the end of the year, China had a total of 3GW offshore wind projects in operation, with nearly 80% in Jiangsu Province. But the trend is now clearly shifting towards Guangdong Province which is home to more than 30GW of offshore wind projects in various stages of development, representing 90% of the country's pipeline. Note: All analysis data source collected from public data and Azure database.
Local DRC pre-approves Shanghai Electric 9.5GW offshore wind projects
On December 17, 2018, Guangdong Province’s Shantou Development and Reform Commission (DRC) published 10 offshore projects with a total of 9.5GW. (Shantou DRC)
Shanghai Electric is currently the largest supplier of offshore wind turbines in China. By the end of 2017, the company had supplied more than 1.5GW of offshore wind turbines in China. In 2017, Shanghai Electric and the Shantou government signed a contract to set up the Shanghai Electric Guangdong offshore wind power intelligent manufacturing base in Shantou with an investment of 500 million CNY. After it is completed and put in operation, the base will have an annual production capacity of 200 wind turbines and an annual output value of more than 10 billion CNY. The facility is expected to ship its first wind turbine towards the middle of 2019.
Yangjiang DRC approves nine distributed wind projects totaling 230MW
Nine distributed wind farm projects, totaling 230MW, have been approved by the Yangjiang DRC. The project sizes range from 12 to 40MW. (Yangjiang DRC)
Jiangsu wind projects to be attributed via competitive bidding in 2019
According to a new notice posted by the Jiangsu DRC, from 2019 onwards, newly approved centralized onshore wind power projects and offshore wind power projects in Jiangsu Province should all be attributed via competitive bidding mechanisms taking in account proposed on-grid tariff. (Jiangsu DRC)
Shaanxi DRC releases new bidding mechanisms for onshore wind farms
The Shaanxi DRC has drafted new measures for competitive bidding of onshore wind power projects within the province in an attempt to promote efficient development of onshore wind power and technology, industrial upgrading, as well as market-oriented development. The measures will be implemented on January 1, 2019 for a trial period of two years. (Shaanxi DRC)
Shaanxi requires that onshore wind projects be between 50 to 100MW and, for developers, that net assets be above 500 million CNY. Projects that do not meet these conditions will be subject to a 5% decrease in developer-proposed on-grid prices and will be restricted from investment for three years.
Jiangsu DRC approves Zhugensha H2# 300MW offshore wind project
According to the Jiangsu Development and Reform Commission (DRC), the Zhugensha H2# 300MW offshore wind project has been approved. The project has a special sea area located between the Guohua Dongtai IV 300MW and Guohua Zhugensha H1# 200MW. The project’s distance from shore is 39km, making it a part of the intertidal zone offshore project. The project plans to deploy 50 units of 4.0MW and 17 units of 6.0MW offshore wind turbines. The project’s total investment is about 5.2 billion CNY and project capital is 1.04 billion CNY. (Jiangsu DRC)
While most offshore wind projects in China are developed and operated by large state-owned companies, this project’s developer, Dongtai Shuangchuang New Energy, is a private company. However, it is interesting to note that this project’s legal representative, Mr. Rong Leng, also works for CHN Energy Longyuan, which belongs to state-owned China Guodian Corporation. Last week, another project developped by a private owner was approved in Jiangsu, the GCL Rudong H15 200MW project.
Baolihua & CGN establish company to co-develop offshore wind project
Guangdong Baolihua New Energy Stock (000690.SZ) and China General Nuclear Power Group (CGN) have agreed to jointly invest in the establishment of a project company to develop the CGN Shanwei Jiazi offshore wind project (900MW) and the CGN Shanwei Houhu offshore wind project (500MW). The registered capital of the project company is 521 million CNY, of which 80% million CNY is contributed in cash by CGN, and the remaining 20% held by Baolihua. (Finance sina)
China publishes first bidding mechanism results for onshore wind project
The Ningxia 2018 wind bidding mechanism results have been published. A total of 32 projects joined the bidding, of which 20 successfully received the Ningxia DRC’s approval for a total 1 ,928 MW capacity. On-grid price bidding ranges from 0.37 to 0.49 CNY/kWh. (Ningxia DRC)
Ningxia belongs to a Type IV wind resource area; prior projects would receive a fixed FIT of 0.49 CNY/kWh. Following the new policy issued in May this year, projects now need to bid for approval with a ranking score partly based on the proposed tariff.
SPIC’s CNY 22 billion project starts construction in Jieyang City
The SPIC Jieyang 900MW offshore wind project, phase one of the Qianzhan general offshore terminal and the Jieyang gas power generation project have started construction. The three projects’ total investment is above 22 billion CNY. After a construction period of 4-5 years, the Jieyang offshore wind project is expected to supply 2.7TWh of clean energy to Jieyang city annually. The Jieyang gas power generation project is designed with an annual power generation of 1.3TWh and is planned to start operating in 2021. (Huilai GOV)
China’s biggest offshore WTG shipped to project site
On December 19, Shanghai Electric’s first 7MW offshore wind turbine has been shipped to the Sanchuan offshore project site in Fujian province. This unit is currently the largest offshore wind turbine produced in China so far. (BJX)
The Shanghai Electric 7MW PMDD offshore wind turbine is based on a license from Siemens Gamesa, and Shanghai Electric is also working on production of the SG 8MW-167 offshore wind turbine. Deeper sea, complex soil conditions combined with medium wind resource are driving the race for bigger turbines in China. So far Goldwind's 6.7MW turbine was the largest in China, but a number of OEMs are working on 7-8 MW models.
Local DRC approves 3,000MW of offshore wind capacity for 3 Gorges
As Azure predicted in last week’s (December 10) news report, the Yangjiang government will be approving a series of offshore wind projects before the end of this month. 3-Gorges’ Qingzhou V, VI and VII offshore wind projects with a cumulative capacity of 3,000 MW have been approved by the Yangjiang Development and Reform Commission (DRC) earlier this month. The three projects all plan to deploy 5.5MW and above offshore WTGs. The total investment for all three projects is said to be above 55.3 billion CNY, of which 30% shall be invested as equity by 3-Gorges and 70% as bank financing. (Yangjiang DRC)
Yangjiang City’s Qingzhou offshore area has 7 projects with a total installed capacity of 5,000MW. Of these projects, 60% is led by 3-Gorges, followed by 20% from Yuedian and 10% from Huadian and Mingyang. The Yangjiang City projects closely follow the approval of 7 other offshore projects in Jieyang City, also in Southern China’s Guangdong Province, undertaken by Mingyang, CGN and SPIC. Azure sees the timing of these approvals as Guangdong’s last-minute attempt to help the industry make the best of the existing 0.85 CNY/kWh offshore wind tariff.
Power trading companies can now take seats on South Hebei Power Grid Electricity Market Management Committee
The Hebei DRC has released a notice outlining the composition of South Hebei’s new Power Grid Electricity Market Management Committee. The committee will consist of 26 members who represent market entities such as power grid enterprises, power generation enterprises, power users, power trading companies, trading centers and third-party institutions (including research institutions and independent experts). (Hebei DRC)
The Electricity Market Management Committee is established to ensure the fairness and openness of the electricity market and protect the legitimate rights and interests of market participants. With a more diverse mix of players being represented, Azure believes that China will be pushing power sector liberalization more aggressively. As a result, electricity prices may expected to drop and barriers to inter-provincial electricity trading reduced, which among other benefits can help ease curtailment issues.
CGN 1,200t jackup vessel launched in Guangdong
On December 8, China State Shipbuilding Corporation (CSSC) Guangzhou Huangpu Shipbuilding Co. and China General Nuclear (CGN) launched a 1,200t jackup offshore wind installation vessel which will start operation in early 2019. The platform has a total length of 94.5m, a width of 43.3m, a maximum working depth of 60m and and will be used for installation of offshore wind turbines up to 7MW. (BJX)
China’s first turn-key EPCI offshore wind project begins installation
The Guangdong Yudean Wailuo offshore project is currently undergoing installation and is set to be operating in 2019. The project plans to deploy 36 units of 5.5MW offshore wind turbines with a total capacity of 198MW. The project developer, Yudean, signed a a full turn-key EPCI contract with China Energy Engineering Group Guangdong Electric Power Design Institute Co., Ltd (GEDI), making it the first domestic offshore wind project for which design, construction and commissioning is contracted to one single company, therefore allowing to significantly reduce risk and work load for the project owner. (CEEC)
November report shows 3.6% YOY industry-wide power generation increase
The National Bureau of Statistics has released data on China’s energy production for November 2018. In November, industry-wide power generation was 554.3TWh, an increase of 3.6% year-on-year (YOY). Among this statistic, thermal power generation increased 3.9%, hydropower generation increased 1.5%, nuclear power generation increased 24.7%, wind power generation decreased 9.5% and solar power generation increased 2.5%. The fall in wind power production can be attributed to unfavorable wind conditions in Hebei, Shanxi and IMAR. (Stats)