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NEA revises RPS on quota system and policies
The National Energy Administration (NEA) has revised the Renewable Portfolio Standard (RPS) on the premise of keeping the quota system and policies basically the same. Previously, in March and September of this year, the NEA published two drafts for the RPS. In this notice, the methods for measuring provincial-level regional quotas, monitoring and evaluating the quotas and assessing the market entities that bear the quota obligations are as follows:
Non-hydro RPS required
(Note: The column on the right indicates the number of 100MW wind farms which would need to be built by 2020 to satisfy the increase in RPS requirement (assuming the whole gap is filled with wind, with utilization hours of 1800 hours, and also assuming average annual city power consumption growth of 5%).
Mingyang Smart Energy Group approved for IPO
In the 171st Working Session of the 17th Audit Committee in 2018, Mingyang Smart Energy Group’s application for an IPO has been approved. It has only been 281 days between the first disclosure of the prospectus in February and the meeting this week (November 13). (CSRC)
Note that in recent years, Mingyang’s performance has been declining. In 2017, the company's revenue was 5.3 billion CNY, down 19% year-on-year; the net profit return on revenue was 344 million CNY, down 11.5%. However, being headquartered in Guangdong province which has an agressive offshore wind pipeline, Mingyang is well positioned for rapid growth in the offshore sector in the coming years.
Zhejiang Daishan signs MOU with XEMC, CCCC Third Harbor and Ningbo Dongfang Cable
On November 6, the Zhejiang Daishan Government signed an MOU with XEMC, CCCC Third Harbor and Ningbo Dongfang Cable to promote offshore wind industry development. According to this document:
Beijing increases natural gas price during winter heating period
From November 15, 2018 to March 15, 2019, natural gas sales price for non-residential consumption in Beijing will rise by 0.23 CNY/m3, from 2.48 CNY/m3 to 3.22 CNY/m3 based on usage.
China has always been in a state of natural gas shortage. In the first three quarters of this year, natural gas production was 115.6 billion m3, up 6.3% year-on-year (YOY), and natural gas imports were 88.6 billion m3, up 37.6% YOY, while consumption of natural gas was 201.7 billion m3, up 18.2% YOY.
Yangjiang promotes investment activities in wind power industry
From October 31 to November 9, the mayor of Yangjiang led a delegation to the UK, Denmark and France to carry out investment activities in the wind power industry. This trip resulted in the signing of 3 MOUs and a trade cooperation contract of 25 million USD. The Yangjiang mayor pointed out that Yangjiang is an offshore wind power equipment manufacturing industrial base in Guangdong Province, that the offshore wind farm is planned to reach 10GW, and that the wind power industry has a favorable investment environment. And for this trip Azure also helped organize some of sht Yangjiang Delegation’s meeting (YJRB)
Hebei publishes 2018 Engineering Research Center Construction List proposal
Hebei Development and Reform Commission has published a proposal of projects to be listed on the 2018 Engineering Research Center Construction List. In this list, 4 out of the total 30 projects are in new energy. These include:
Projects that are not rejected before November 16 can receive special provincial funds for the development of strategic emerging industries.
MOEA reaffirms commitments to reach 5.5 GW of offshore wind by 2025
Earlier this week, the Ministry of Economic Affairs (MOEA) has reaffirmed commitments to reach 5.5 GW of offshore wind power generation by 2025, a goal set by President Tsai Ing-wen after she took office and which attracted wind power developers from all over the world. However, after a series of intensive selection and bidding procedures in the first half of the year, selected developers are often limited to a provisional permit, which prevents them from being able to sign purchase and sale agreements. The MOEA has clarified that the installation procedure is divided into three stages: preparation of licenses, granting of construction permits and granting of licenses. The MOEA says that at present, all developers have in fact obtained most preparatory documents, that application operations are being carried out in parallel, and that implementation is progressing smoothly in accordance with the target of installing 520MW of offshore wind by 2020 and 5,500MW by 2025. (TWTPO)
Jiangsu promotes PPP projects in revision of awards and supplemental funds
The Jiangsu Provincial Department of Finance has revised the “Administrative Measures for the Government and Private-Public Partnership (PPP) Project Awards and Supplemental Funds” to further promote and accelerate the implementation of PPP projects. For private enterprise projects, the award-added standard will increase by 10%; for projects in the green environmental protection field, the award-added standard will increase by 10%. The maximum amount awarded for a single district-level project does not exceed 20 million CNY, and the maximum amount awarded for a single county-level project does not exceed 10 million CNY. (CZT)
Yangjiang DRC approves 3-Gorges Yangjiang Xishapa III offshore wind project
The Yangjiang Development and Reform Commission (DRC) has approved the Yangjiang Xishapa III offshore wind project, which plans to install 73 units of 5.5MW WTG. This project includes two zones: Zone A1 will hold 55 units of WTG connected to a newly installed offshore substation and Zone A2 will hold 18 units connected to the 3-Gorges Xishapa II offshore substation. (Yangjiang DRC)
In the Xishapa area, 3-Gorges has five offshore wind projects in total:
China releases biomass electricity on-grid price research report
According to the “Biomass Electricity Price Policy Research Report” jointly published by the National Renewable Energy Centre, the Energy Research Institute of the National Development and Reform Commission, and the Biomass Energy Branch of the China Association for the Promotion of Industrial Development, the gap between subsidy funds and installed capacity of China’s renewable energy has continued to widen. By the end of 2017, a total of 14.4 billion CNY, of which 6.41 billion CNY was agricultural and forestry biomass, and 1,228MW (about 8% of total installed capacity) were not included in the government subsidy list. The report outlines the challenges in biomass power generation—projects have high cost, weak profitability, long payback periods, subsidy arrears—alongside the important role biomass power generation plays in environmental protection, people’s livelihood and clean heating. (BJX)
Jiangsu sets 2019 power trading target at 300TWh
The 2019 Jiangsu power market transaction notice states that the province’s power trading target is 300TWh based on a two-sided negotiation and bidding system. On the power demand side, power voltage levels of 10kV and above are required to participate in trading. On the power supply side, trading participation is open to thermal and nuclear power units. (JSPEC)
Jiangsu’s total power consumption in 2017 was 580TWh, and total power consumption for 2019 is estimated to reach 630TWh, putting the 300TWh power market trading target at half of total power consumption.
Zhejiang gas on-grid price temporarily increases 0.2 CNY/kWh
From October 1, 2018 to December 31, 2018, Zhejiang will increase gas power generation on-grid price by 0.202CNY/kWh. During this period, 9F and 6F power generation units’ on-grid price will be 0.73CNY/kWh. 9E and 6B power generation units’ on-grid price will be 0.79 CNY/kWh. (Zhejiang DRC)
In comparison, Zhejiang’s wind on-grid price sits at 0.57CNY/kWh based on resource type IV, and its PV on-grid price at 0.85CNY/kWh based on resource type III. This is encouraging evidence that wind and solar are competitive players in the region.
Q3 2018 report shows China boosts grid-connected offshore capacity by 1,020MW
By the end of Q3 2018, China’s yearly installedwind capacity reached 12,610MW, a 30% year-on-year (YOY) increase. Total wind generation capacity in China was 267.6TWh, a 26% YOY increase. For China’s grid-connected offshore wind, there was 1,020MW newly added capacity, mainly concentrated in Jiangsu (920MW) and Fujian (90MW) provinces. (NEA)
Fujian DRC approves Fujian Putian City offshore wind farm
Fujian Putian City offshore wind farm will be located in Xinghua Bay, with plans to set 40 units of 5.0MW WTG. Project details – distance from shore: 3km; depth range: 5 to 15m; total investment: 3.44 billion CNY.
SPIC Dafeng H3#300MW offshore wind farm first 6 WTG units connected to the grid
The 75-unit 4.0MW WTG SPIC Dafeng H3#300MW offshore wind power project has been successfully connected to the grid. The project is located in Yancheng City’s Binhai County in Jiangsu Province. Project details – distance from shore: 36km; depth range: 17.9 to 18.3m; sea area: 46km2; total investment: 4.96 billion CNY (excludes onshore investment) (CEC)
Before this project, SPIC already had two offshore wind farms completed and in operation.
SPIC Binhai North H1# - 25 units 4.0MW WTG operating in May 2015
SPIC Binhai North H2# - 100 units 4.0MW WTG operating in June 2018
2017 wind power generation average on-grid price decreases 0.43% YOY
The 2017 national wind power generation average on-grid price was 0.5623CNY/kWh, a 0.43% YOY decrease. Shanghai’s average on-grid price, ranked the highest, was 0.7519CNY/kWh, whereas Yunnan’s was only 0.4238CNY/kWh. (Average on-grid price = power sale income / on-gird power * 1.17 including TAX) (NEA)
CIP & Century Group sign 16.5 billion TWD offshore wind foundation contract
The Copenhagen Infrastructure Fund (CIP) and Century Group (Century) signed an Offshore Wind Foundation Contract for 16.5 billion TWD on October 2. CIP Zhangfang and CIP Xidao, which have a total capacity of 600MW and more than 60 units of offshore wind foundations, will be handed over to Century Group, making it the highest single contract in the history of offshore wind power in Taiwan. (CIP tw)
CIP Taiwan offshore projects
The project is based on Taiwan’s goal to remove nuclear power plants by 2025. Taiwan wants to install a 520MW offshore wind farm in 2020 and a total of 3,000MW offshore wind farms by 2025. In phase I of CIP Zhangfang offshore wind farm, 100MW will be operating in 2021, and in phase II, 452MW will be operating in 2023. For CIP Xidao offshore wind farm, 48MW will be operating in 2024.
Baoxin Energy and CGN sign MoU for 1,400MW offshore wind project
Baoxin Energy has announced the signing of an MoU with CGN for a 1,400MW offshore wind project. The two sides will negotiate a cooperation agreement based on the letter of intent for cooperation. According to the letter, the two sides intend to jointly develop the Shanwei Jiazi Offshore Wind Farm (900MW) and the Shanwei Houhu Offshore Wind Farm (500MW). After the Shanwei Houhu (500MW) Offshore Wind Farm project is approved, Baoxin Energy and CGN will establish a JV in which CNG will hold 80% and Baoxin 20%. (Sina Finance)
Shanwei Houhu 500MW project sea area diagram.
CGN is a large clean energy group. By the end of 2017, CGN had 21,470MW of nuclear plants in operation, 10,270MW under construction, more than 11GW of wind installed, and more than 2GW of PV installed.
NEA publishes letter promoting non-subsidized PV & Wind on-grid work
In the context ofon going Photovoltaic (PV) & Wind technology advancement and cost reductions, the National Energy Administration (NEA) announced that it will further promote the acceleration of renewable energy development and competitiveness, and eliminate subsidy dependence as soon as possible. Non-subsidized PV & Wind projects will be approved by local governments and should sign long-term contracts with local power grid companies with curtailment levels below 5%. In this notice, NEA also announced plans to promote direct trading in PV & Wind. In direct trading, PV & Wind developers and customers negotiatean on-grid price and pay a T&D (Transmission and Distribution) price to the power grid company. (BJX)
Non-subsidized renewable energy direct trading.
For illustration, wind farms connected in type I wind resource areas (mostly in North, NE and NW China) can currently receive a subsidized on-grid tariff of 0.4CNY/kWh, whereas thermal power plants in the same region receive between 0.25 and 0.30 CNY/kWh. However these same wind farms often face severe curtailment, with up to 30% of possible production lost because of grid off-take challenges. .
NEA data show national wind power utilization hours increase 167hrs by end of August
The National Energy Administration (NEA) has released statistics on the national electricity industry for January to August. Between January and August, national power consumption was 4,529.6TWh, a 9% YOY increase. During this period, there was also 10.26GW of newly installed wind capacity with 1,412 utilization hours. (NEA)
Azure has summarized some of the key data in the graph below:
Zhejiang province to limit coal production and energy consumption
According to this notice, Zhejiang will control the proportion of coal production, limit the development of high energy-consuming industries and promote development of new energy such as wind, PV and biomass. ( ZJDRC)
Azure has summarized some of the key data in the graph below:
Despite the notice announcing more support for new energy, we are in fact surprised by how small the numbers are for new wind installations. The projections are reasonable in light of historical installations, with average annual installations of 160MW over the past 7 years, but they are not in line with the target of reaching 4GW by 2020 according to the province's 13th 5 year plan, starting from 1.3GW in 1H2018. We therefore assume that wind targets listed above are not including distributed wind projects nor offshore wind. Zhejiang currently has 252MW of offshore wind under construction and more than 1.2GW already approved.
NEA publishes national coal power ultra-low emission and energy saving targets
2018 National coal power ultra-low emission target: 48,680MW.
Energy saving transformation target: 53,905MW. (NEA)
Energy saving target map below:
Wind production accounts for more than 5% of national total in 1H2018
A total of 82.9TWh of wind power was produced in China during 1H2018 ,accounting for 5.4% of total on-grid power. Wind power trading reached 19.8TWh inluding 9TWh of cross-provincial trading. (CEC)
1H2018 Wind power market trading diagram
Large power generation groups have participated in wind power transactions in 16 provinces, with the three provinces of Yunnan, Xinjiang and Gansu accounting for more than half. The average transaction price in these provinces (including production as well as cross-provincial and / or cross-regional transmission price s) ranged between 0.37 and 0.44 CNY / kWh.
Fujian and Shandong cancel subsidies for distributed PV projects
Following the “531” < 国家发展改革委财政部国家能源局关于2018年光伏发电有关事项的通知> ( NDRC)policy realised earlier this year, Shandong & Fujian provinces are officially cancelling subsidies for newly connected PV project. The final subsidy amount or power tariff depends on the timing of both registration and connection of the project (BJX)
Fujian distributed PV subsidy breakdown
China's first flexible high-voltage direct current (VSC HVDC) offshore wind farm
ChinaHuadong Design Institute is planning to open a groundbreaking 1.1 GW offshore wind farm 90 kilometres from the coast of Jiangsu Province in eastern China. DNV GL announced that it will provide technical support for the feasibility study of China's first flexible high-voltage direct current (VSC HVDC) offshore wind farm converter station. ( BJX)
Compared with traditional submarine high voltage AC power transmission (HVAC), VSC HVDC can minimize power losses and is suitable for long distance and large capacity project.
NDRC requires power trading companies to carry out shareholding reforms
According to NDRC document #9 <中共中央国务院关于进一步深化电力体制改革的若干意见> and as part of the power market reform, many new power trading companies have been setup over the past two years. The result however is that most power trading companies are still wholly-owned subsidiaries of the grid company. In this new policy, NDRC now requires that preferably 50% and at least 20% of power trading companies stock be owned by enterprises independent of state grid. ( NDRC)
Guandong DRC publishes opinion on new bidding mechanisms for wind farms
Guangdong is the first province to publish clarifications on the specific mechanisms which will be used to allocate wind farm subsidies following the new competitive on-grid tariff guidelines requirements issued by NEA earlier this year. The document provides some details on the scoring scale which will enable to compare bidders, as well as guidelines on procedures for applying for subsidies. (GD DRC)
According to theNEA policy issued earlier this year (NEA), the tariff related score for both onshore and offshore wind farms should account for at least 40% of total score. The remaining criteria are listed in the pie charts above. For offshore projects, the business capability score, which relies on a specific scale for rating references, is the second most important criteria with a weight of 30%. For onshore projects progress on preliminary construction is given more importance.
Jan to Jul energy statistics published by NEA
From Jan to Jul, power consumption in China reached 3,877.5TWh, a 9% increase yr-on-yr. Wind showed the strongest growth, with new installations of 9.46 GW, with utilization hours improving as well. (NEA)
Azure has summarized key information in the graphs below:
3-Gorges Guangdong 400MW offshore wind farm approved by Yangjiang DRC
The project has a sea area of approximately 67km2, waterdepth of 21 to 26m and distance to shore of 15.9km. The project will feature 73 5.5MW wind turbines with a projected annual production of 1.5TWh.
SPIC secures project approval for 2 offshore wind farms in Guangdong province
SPIC Jieyang Jinghai 150MW & Shenquan PhaseI 400MW offshore wind projects have been approved by Jieyang DRC. The two projects will require a combined number of 101 5.5MW wind turbines. Both projects plan to start construction by the end of 2018 and will be operating in 2021.(JYDRC)
Mingyang is the only turbine supplier with a 5.5MW turbine on the market and is securing a large number of orders in Guangdong province where it is headquartered, especially this year as developers are rushing to secure approvals while the 0.85 CNY / kWh feed in tariff is still available.
Mingyang and SPIC sign an MOU for cooperation on offshore wind
Mingyang and SPIC signed an MOU regardingfixed as well as floating offshore wind. The strategic partnership will be focused on offshore wind power development, clean energy equipment supply, technical cooperation, international projects, information sharing, engineering construction and ancillary services.(BJX)
NEA publishes 1H2018 solar power installations
During the first half of this year, 24 GW of new PV capacity was installed. This includes 12GW of centralized PV, a decrease of 30% yr-on-yr, and 12GW of distributed PV, an increase of 72% yr-on-yr. The total installed PV capacity has now reached 154.5GW, about three quarters of which is centralized. (NEA)
In the first half of 2018, newly installed PV capacity in Shandong, Zhejiang, Henan and Jiangsu provinces all above 1GW, and the newly installed distributed photovoltaic installations in the four provinces accounted for more than half of the country.
HHI signs an offshore wind construction & installation contract with 3-Gorges
Huadian Heavy Industries (HHI), a subsidiary of Huadian Group, won the bid for the first batch of foundation construction and installation of 38 wind turbines as well as an offshore high voltage substation for the 3-Gorges Guandong Yangjiang Xishaba 300MW offshore wind project. The contract is worth 1 billion CNY. (Finance Sina)
Source: Yangjiang GOV
Jiangsu power grid load exceeds 100 GW for second consecutive year
On August 8, Jiangsu Power Grid load reached 102.26 GW, breaking last year's record of 102.19GW. From January to July this year, total power consumption in Jiangsu reached 349.5TWh, an increase of 6.78% yr-on-yr. Appoximately 22% of this power demand was produced from renewable energy sources.(CEC)
China EV charging infrastructure annual report (2017-2018) published by NEA
777,000 electric vehicles were sold in China in 2017, an increase of 53.3% year-on-year, allowing EV market share to reach 2.7%. In 2017, there were 214,000 public charging stations and 232,000 private charging stations. Construction of another 600,000 charging stations is in planning, including 100,000 public and 500,000 private. (NEA)
Highway power charging network
Shanghai Electric terminates acquisition of subsidiary of GCL-Poly
In June this year, Shanghai Electric announced its intention to acquire 51% of Jiangsu Zhongneng, a subsidiary of GCL-Poly (HK3800) focused on high-purity polysilicon production, for 12.7 billion CNY. Shanghai Electric now terminates the acquisition procedure. (Finance Sina)
The acquisition was cancelled due to changes in the photovoltaic situation since the second half of the year. Especially after the “531” PV New Deal, the two sides have different judgments on the trading conditions and the future development prospects of the PV market.