China Seeks Grid Parity for Renewable Energy

Developers of renewable energy projects in China are ramping up efforts to move their installations forward, after delays from the coronavirus pandemic slowed the government’s plan to have solar and wind power compete with coal generation on prices. Renewable energy has received government subsidies since 2011, but officials maintain they will remove those subsidies by the end of 2021. Some solar projects were particularly impacted, as under current government policy some farms not connected to the grid by June 30 were expected to lose subsidies.

He Genxin, who leads Jiangxi New Energy Generation, a subsidiary of the State Power Investment Corp., told China Energy News: “There are over 400 megawatts of projects which need to connect to the grid by the end of the year if they are to get subsidies. About 60% of those are confident of doing so, another 20% might manage it, and the other 20% face huge difficulties.”

The National Development and Reform Commission (NDRC), China’s top agency for economic policymaking, in May 2019 said onshore wind power projects approved last year and this year, and connected to the grid by the end of 2020, already would receive a lower subsidy than those projects that were approved in 2018. The group also said that after 2021, there would be no more subsidies for new projects. That has not stopped companies from working on projects in China, which despite its long and continued reliance on coal-fired generation is also among the world leaders in renewable power.

GE Renewable Energy in June announced it would expand its clean energy footprint in China, supplying 12 turbines for a 30-MW onshore wind farm. The company’s contract with PowerChina Guizhou, a Chinese engineering firm, also includes a two-year service commitment for a project expected to be fully operational by the end of the year.

Zhao Lin, GE Renewable Energy’s general manager of Onshore Wind, China, said, “We’re delighted to see our first onshore wind partnership with PowerChina. GE has a long-term relationship with PowerChina and has consistently met expectations and commitments by designing solutions to enable their success in the energy sector. This agreement with PowerChina is significant for GE Renewable Energy as it affirms our commitment towards helping China meet its clean energy targets.”

1. Shanghai Electric in June said it had commissioned China’s first 8-MW offshore wind turbine featuring black-start technology. The company has a license to produce and sell Siemens Gamesa Renewable Energy’s 8.0-167DD offshore turbines in the Chinese market. Courtesy: Shanghai Electric

Shanghai Electric, an integrated equipment manufacturing group for the energy industry, in June announced that it had commissioned China’s first 8-MW offshore wind turbine featuring black-start technology. The company also unveiled its plan to further explore solutions for integrated renewable energy-based systems, combining wind, solar, and energy storage. Shanghai Electric’s 8-MW-167 model offshore turbine (Figure 1) has the largest generation capacity among Chinese wind turbines, according to the company, and is the result of an agreement signed in March 2018 with Siemens Gamesa Renewable Energy (SGRE), which gives Shanghai Electric a license to produce and sell SGRE’s 8.0-167DD offshore turbines in the Chinese market.

Pengju Kang, the company’s chief digital officer and engineering general manager, told POWER that the offshore wind industry in China will be challenged after 2021, when government subsidies are no longer available. “How to reduce the lifecycle cost from construction of wind farms to the 25-year operation and maintenance is the biggest challenge for the offshore wind power sector,” Kang said. “The technology trend of offshore wind will be to develop breakthrough technologies to achieve three objectives: reducing the LCOE [levelized cost of electricity], improving annual energy production, and improving product quality and reliability.”

Kang said the decision to use the SGRE turbine was because it “is the most suitable machine solution for the Chinese market. The 8-MW offshore turbine has mature technology of direct drive platform and continues its predecessor’s excellent reliability records. Compared to the 7MW-154 wind turbine, this model produces 20% more electricity and cut down the LCOE by around 11%.”

The 8-MW turbine features 81.4-meter blades, producing a rotor diameter of 167 meters, and a swept area of 21,900 square meters. It was tested onshore at the Shantou Haojiang offshore industrial park. The demonstration project for an integrated clean energy solution also features a 4-MW offshore wind turbine and 2.42-MW rooftop photovoltaic system. It incorporates energy storage, charging pile equipment with a 2-MWh capacity, a set of intelligent building environment control systems, a 5G+ industrial internet of things component, and a microgrid control center and energy management system. Kang said the company is “developing a two-system intelligent control platform with powerful edge computing capability. The digital wind turbine has the ability of analysis, thinking, and prediction, which can realize optimal control, maximize the capture of wind energy, improve the reliability of the wind turbine, and extend the life of the unit.”

Moving forward, Kang said Shanghai Electric is focused on “large-capacity turbine units and digital transformation” for both offshore and onshore wind power projects. He said the company is in a prime position to capitalize on the growing Chinese offshore turbine market, noting up to 26 GW may be grid-connected by the end of 2025. However, that ambitious schedule could be altered due to construction delays from the pandemic.

The wind and solar power sectors in China also would like to see the government extend grid connection deadlines so more projects will be eligible for subsidies, but the country’s Ministry of Finance has turned down these requests except for projects in the Wuhan region. One problem is that the government is far behind on earlier subsidy payments; a late-2019 report from the National People’s Congress Standing Committee, concerning implementation of China’s law on renewable energy, said more than 90% of new renewable projects during the country’s 13th Five-Year Plan period (2016–2020) did not get subsidy funds. Analysts earlier this year said there’s a subsidy gap of 300 billion yuan ($42 billion).

Despite that, renewables are pacing toward grid parity. The China National Nuclear Corp.’s 50-MW Heiyzi wind farm in Yumen, Gansu province, was the first of China’s wind power grid parity trials to be connected to the grid when it started operating in August last year. According to project officials it can generate 152 million kilowatt-hours annually, and match local coal power generators on price, at 0.3078 yuan ($0.043) per kilowatt-hour. The China General Nuclear Power Group’s 260-MW solar farm in Ma’anshan, Anhui—China’s first solar grid parity trial—is matching local coal generators, at 0.3844 yuan per kilowatt-hour.

Kang said that’s a promising development and will drive future renewable energy projects. “There will be a strong demand for floating units in the far-reaching and deep-sea market in China,” he said. “We are actively developing strong coupling technology between the whole turbine machine and floating foundation to reduce system cost.” He added that “localized industrial chains such as construction, installation, operation, and maintenance need to be cultivated for return on project investment,” and said “the grid parity market demand for turbine cost, reliability, equivalent full-load hours, etc., can be met.”

Darrell Proctor is associate editor for POWER (@DarrellProctor1, @POWERmagazine).

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