So far, China has been slow to recognise its CSP potential. Will China’s abundant biomass resource be the trigger that sets the industrial behemoth on course for large-scale CSP uptake?

By Paul French, Shanghai correspondent

The combination of a burgeoning manufacturing sector, rapid urbanisation and spiraling domestic consumption has left China with little option but to explore the full spectrum of potential alternative energy solutions.

With limited fossil fuel reserves, the country has been keen to diversify away from oil and coal fired power stations. Instead, the energy thirsty giant has opted to develop additional capacity in nuclear, wind and photovoltaic solar panels. More recently, CSP has been the latest technology embraced by China in its quest to diversify its energy mix.

Energy politics

To date, China has lagged behind Europe ad North America in tapping into its CSP potential. Internal senior Communist Party and Energy Ministry officials are said to be sceptical about the potential for CSP to deliver anything close to the amount of energy required to service China’s demand.

Energy is politics in Beijing and some officials are wary of committing to large-scale CSP projects that would, for the most part, be situated in the country’s far western desert regions, notably Xinjiang province.

Xinjiang is siituated far from China’s coastal regions, where energy demand is most concentrated. Furthermore, in recent years, the province has given China’s central government cause for concern, due to civilian unrest.

Despite its reservations, the government has been experimenting and is beginning to give  consideration to CSP as an alternative to coal-fired power. In Beijing a state-backed consortium comprising the Ministry of Science, the Beijing municipal government and the Chinese Academy of Sciences (CAS) has begun construction of a CSP plant on the outskirts of the capital - Asia’s inaugural plant. It is intended as a pilot generating a planned 1.5MW.

Another state-backed project, a 50MW CSP plant, is planned for Lanzhou, the capital of China’s Gansu province, which is sparsely populated and situated on the edge of the Tibetan plateau.

 

Chinese tower power CSP equipment manufacturer Penglai Electric recently signed a deal allowing it to manufacture CSP plant under license for California-based eSolar. Jessie Liu, International Business Development Manager at Penglai, notes: “Most people in China are still not quite clear on what is tower CSP. It requires further market development”.

However, she points to Beijing’s determination to lessen reliance on coal for resource supply and environmental reasons. “In 2009, Beijing eliminated more than 26GW of coal plants rated at 100MW or lower. This retreat from coal-plants in the 100MW or less territory opens up new opportunities for technologies with hybridization capabilities, such as eSolar, to further lower cost,” explains Liu.

 

As with the development of wind power in China, observers expect that CSP will ultimately be driven by private industry. Jonathan Watts, The Guardian’s East Asia Environment correspondent, believes that Chinese firms have shown themselves keen to monetise new energy technologies and profit from both domestic installations and exporting components. He forecasts that CSP-biomass hybrid plants will be no exception.

Surmounting the cost barrier

Many companies view CSP as a commercial opportunity, just as wind turbines have so far been for China. It is for this reason that analysts have been so interested in the recent announcements from Penglai Electric.

Penglai aspires to combine the developed world’s growing desire for CSP with China’s legendary ability to drive down production costs. Eric Wang, Penglai’s senior VP for international business development, recently told the New York Times that manufacturing mirrors, turbines, towers and other equipment in China, rather than in the United States, could cut costs by at least half.

The experience of wind turbines and PV cells indicates this is a fairly accurate assessment.

Cost is a major factor in determining China’s choice of alternative energy solutions at present. Both wind and photovoltaic cell have become more popular as Chinese manufacturers have driven down turbine prices.

Subsequently, both technologies enjoy high-level support from the government-backed Chinese Renewable Energy Industries Association. While so far this has not been the case with CSP, things may be about to change.

Biomass is key

Of key interest to Beijing is the possibility of energy storage. As such, the concept of CSP-biomass hybrid power plants, which can continue to generate electricity after the sun has set, has kindled interest.

Hybrid solar and biomass plants, which is what Penglai and eSolar can offer, share turbines and other infrastructure, reducing costs and producing energy throughout the day. This might just be the ‘kick start’ the technology needs in China.

Penglai, using eSolar’s power tower technology, will manage the construction of hybrid CSP-biomass power plants over the next decade.

The first is scheduled for construction in Shaanxi province, northwest China, where a biomass power plant will use sand willow (originally planted to prevent desertification in the area) as fuel. Penglai will build the plant in what is to be known as the Yulin Energy Park (covering 66-square-miles), using eSolar technology.

 

Once up and running, a separate firm, the China Shaanxi Yulin Huayang New Energy Company, will operate the Yulin Energy Park. According to Penglai, the project, which will generate 2GW, represents an investment of US$5 billion. Liu is confident that completion of the first project will provide a much-needed boost to the CSP sector in China.

Watts concurs: “Once it is up and running, the government will be more likely to commit further resources to CSP-biomass hybridisation.’

The question on everyone’s lips is whether or not China’s move into CSP-biomass hybrid plants will be a repeat of the Chinese move into wind and PV. With a handful of CSP-biomass hybrid power plants up and running, will Chinese tech firms then drive down costs globally making CSP a more viable technology commercially?

While Jessie Liu of Penglai is confident that it will, she notes that China’s market will be the first to benefit from lowered costs. “We will initially focus on the satisfying Chinese domestic demand. Our goal is to bring down the cost of equipment so CSP can become truly competitive against fossil fuels.”

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Paul French: paul@accessasia.co.uk

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Rikki Stancich: rstancich@gmail.com