China: Slow and steady wins the race?
Already a superpower and a leader of global economy, can China meets its CSP targets of 1 GW by 2015 and 3 GW by 2020?
China, home to the world’s largest population, recently surpassed the U.S. as the world's biggest net oil importer, according to data by the Energy Information Administration. Not only has the country’s oil consumption outstripped production by 6.3 million barrels a day in September, but its power consumption rose 5.1% to 2.5 trillion kilowatt hours in the first half of this year.
“Energy demand is increasing in China, we need more power plants, and CSP is one of the options. The country’s strong support for renewable energy and the pressure coming from energy conservation and emission reduction makes CSP more valuable,” says Daniel Hui, Sales Engineer at Himin Solar Co., Ltd., which is building China’s first Fresnel CSP plant; a 2.5 MW project in Himin Solar Valley.
Operating since 1995, Himin Solar focuses on the R&D and manufacture of solar collecting products, such as concentrated solar collectors and solar absorbing tubes for CSP, as well as on solar fields. In the near term, The Chinese firm aspires to be a leading EPC contractor for solar fields, including parabolic trough, linear Fresnel, and tower heliostat fields.
“We are thirsty for clean and renewable energy. China is 60% powered by coal and we lack oil. The coal industry creates a lot of pollution,” says Hui. Driven by a desire to increase energy independence and reduce carbon dioxide emissions, the National Energy Administration of China set a target CSP capacity of 1 GW by 2015 and 3 GW by 2020 under the country’s 12th Five Year Plan for 2011 to 2015. But then it has also set more than a thirtyfold target for PV, of which it plans to install a staggering 35 GW by 2015.
Battling with local PV
Worldwide, CSP has been challenged by the plummeting prices of solar PV. This is even more prominent in China, where PV manufacturers have the capacity to supply the entire industry, with plenty left over.
“Competition is fierce from low-price PV. PV panel prices are now very cheap in China, and since the US and EU imposed anti-dumping and anti-subsidy duties on Chinese-made PV panels, the exporting has dropped sharply,” says Hui.
This means that PV manufacturers have to explore the domestic market, and to this end, the country’s central government released a series of favorable policies to support the development of local PV plants.
“I feel that the government is very cautious to introduce support policies for CSP at this point, because we don’t want to repeat the experience in the PV and wind industries. They have expanded at a very short time beyond imagination, quickly going over capacity and then dropping sharply. Now many factories have been shut down and workers laid off – a total mess. We don’t want to see this happen again. We want to build a healthy and sustainable CSP industry, even at the price of a longer time,” explains Hui.
Strengths and weaknesses
China, however, would be quite capable of achieving its CSP goals if the government were to issue incentives and industry-support mechanisms. The country boasts a comprehensive CSP supply chain, has remarkable experience in thermal energy, and its economy has become more liberalized. Additionally, it has vast lands and abundant solar resources.
However, in places where solar resources are suitable for CSP development, the weather conditions are not ideal. “The sunlight-abundant areas are in northwest China, where usually strong winds occur round the year,” notes Hui, adding that these locations are often sandy, scarce in water, and many are plateau.
“For example, in one of the most suitable places for solar power plants is Qinghai Province, where the altitude is about 3,000 metres above sea level, there are large day-night temperature differences and other unfavourable weather conditions”.
Technical difficulties also remain. Although there are several CSP players now in China, most of them are manufacturers and suppliers, and only a few have experience in system integration.
“It’s very difficult to design, engineer, construct and operate an entire CSP plant for Chinese companies at present, as we lack CSP professionals. From my perspective, CSP is still at the demonstration stage in China. We need to do more scientific research and train more professionals,” Hui tells CSP Today.
Moreover, some of the key local component and equipment manufacturers have no project references in commercial CSP plants; thus it will take time to verify the reliability of such products. On the other hand, the market still needs a mechanism, given that policies for CSP are still not sound enough, and feed-in-tariffs are still under study.
Slow but steady progress
Currently, China has four operating CSP pilot plants totalling 3.68 MW in capacity, and two under construction: Heliofocus’ 10 MW Orion solar dish field that is being built in Inner Mongolia, and Zhejiang Supcon Solar’s 50 MW CSP multi-tower in Delingha, Qinghai province.
Orion’s civil works – ground works and foundations – were at an advanced stage and being finalized last November. “During the first phase of the project, a 1MW solar field is scheduled to operate by mid-2013.The second planned to operate by end of 2014, will be 10MW and the third phase is 60MW scheduled to operate by end of 2015 as boosting for a coal power plant,” the company states on its website.
The second CSP project under construction will encompass 10 towers of 5 MW each and will integrate molten salt thermal storage. The first 10 MW have already commissioned last July, as reported by the State Grid Corporation of China, and the entire project is anticipated to come online by 2014.
While these two CSP projects seem to be moving forward, many power groups, including the Big 5 state-owned enterprises, have declared they will develop CSP plants, but little progress has been seen so far.
According to the CSP Today 2014 Markets Report, 18 CSP projects have been announced in China, seven are under development, and eight are in planning.
“I guess there are about five or six 50 MW-level CSP plants already licensed by the central government or province-level governments, but all these projects are progressing very slowly. I think China wants (us) to build a real 50 MW-size CSP plant all by ourselves,” Hui sceptically suggests.
First commercial-scale plant?
China’s licensed CSP plants may include the country’s first commercial-scale CSP plant, which BrightSource Energy will be supplying technology for. However, details remain difficult to uncover, with no indication of the project’s scale or cost in the company’s announcement.
In August, BrightSource said it signed a Memorandum of Understanding with key organizations in the Chinese energy market, including the China Power Investment Corporation (CPI), China Renewable Energy Engineering Institute (CREEI) and Huanghe Hydropower Development Co., a subsidiary of CPI.
CREEI has already been selected by China’s NEA to organize related parties, who would compile a national CSP handbook to help guide the development of future CSP projects.
The American company said that the plant will be constructed under the U.S.-China Framework for the Ten-Year Cooperation on Energy and Environment. While BrightSource will supply the technology for the project, Huanghe will lead the development, construction and operation.
“Working with CPI, the project will be configured to meet local conditions as well as the nation’s grid requirements for stable and dispatchable output. BrightSource will also work with CPI to track CSP technology developments for future cost reductions, pursue relevant policy developments in China and explore potential collaboration in international markets”, the company said at the time of the announcement.
However, this is as much as what’s been revealed. “At this point, we don’t have additional details to share about our activities in China, beyond what is in the press release,” the company told CSP Today in an emailed statement.
BrightSource’s interest in China goes back to 2009, when former CEO John Woolard said that the company was seeking partners in India and China as it looked to expand its reach outside the United States. Now that California’s 377 MW Ivanpah Solar Electric Generating System has been connected to the grid, BrightSource is indeed expanding its presence globally, as it gets involved in the Israeli and Chinese CSP markets.
“It seems now that 1 GW by 2015 is not possible, and it’s hard to say whether we can meet 3 GW by 2020,” remarks Hui. However, he adds that if the country reaches even 500 MW by 2018, it would still be possible to meet the 2020 goal – if the policies are good”.