RENEWABLE ENERGY TRACKS OF CHINA VS FOSSIL-FUEL POWER PLANTS Cigdem Yorgancioglu

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RENEWABLE ENERGY TRACKS OF CHINA VS FOSSIL-FUEL POWER PLANTS Cigdem Yorgancioglu

  

RENEWABLE ENERGY TRACKS OF CHINA VS FOSSIL-FUEL POWER PLANTS

Cigdem Yorgancioglu

03 Jan 2019

 

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Sihui International  Woman poetry festival held in China  is co-sponsored by the Chinese Poetry Society, the Peking University Chinese Poetry Research Institute, the Public Relations Department of the CPC Fourth Committee Municipal Committee, and the Sihui Development Management Center. At the end of 2018 going to China to represent Turkey has made me very happy and honored. Performing poetic recital and making an academic presentation was very valuable for me . Valuable as "Jade" In Traditional Chinese culture, "Jade culture" has always played an important role. Through its long history, jade has always been closely related to cultural concepts like yin (female) and yang (male) and represented the essence of yin power. The symbol of warm jade was in ancient times the highest complement of female beauty and power. Located in the southern province of Guangdong, Sihui is known as the home of Chinese jade The Renewable Energy issue in China is sounds like the dichotomy of a yin and yang in the country. It has two faces, consequently, I decided to concoct my first article  about the energy in  year 2019 stimulated  from China.

 

Jill Baker C who write about people and companies leading the clean tech revolution.dreaw attention n Solar Facts and Figures  in China on her article  headlined as Solar Leader China Is Slashing Its Subsidies On Solar Power -- What You Need To Know" published on Forbes on June 2018  Based on this , China  has  the biggest solar market in the world, and has installed capacity of around 130 GW, far bigger than the U.S. at around 60 GW, and Japan's roughly 46 GW. Nevertheless the incentive system, including feed-in-tariffs which are fundamentally guaranteed prices at which the government will buy power from solar developers, has created an cumbersome solar monster. Responding to these generous government incentives, solar installations have flourished, from 2.5 GW of cumulative installation in 2011 to around 130 GW today, according to figures from Shen at Roth Securities. However the end consequence has been a costly encumbrance on consumers. China's state-run renewable energy fund, financed by a surcharge on users' energy bills, is in deficit by more than 100 billion yuan ($15.5 billion). China currently generates about 11% of its energy from non-fossil sources, and that is targeted to go as high as 20% by 2030. China solar expert Frank Haugwitz of Asia Europe Clean Energy Advisory (AECEA) estimates that by the end of 2020, China will have 200 to 215 GW of total installed solar PV generation capacity, which he feels is "in-line with China’s 200 GW target for total solar-installed base, proposed by China’s National Renewable Energy Center (CNREC) in the context of China’s Renewable Energy Roadmap in Nov 2017.”

 

 

According to Forbes, [i]On May 31, China’s National Development and Reform Commission (NDRC), Ministry of Finance and National Energy Board issued a statement halting all subsidies for utility-scale solar projects in favor of competitive bidding, and greatly reducing feed-in-tariffs. This move is likely to efficiently slash demand in the world’s largest solar market by about 40%. China accounted for about 50% of global solar demand in 2017

 

 

China accounted for 50% of global solar demand in 2017. Worldwide demand is anticipated to shrink by double-digits

 

On the basis of The Development of China’s Renewable Energy Policy and Implications to Africa , Jingli Fan [ii] IOP Conf in  2018. After the finish of World War 2 (1945) and until 80’s China has vigorously developed several renewable energy sources to resolve the problem of insufficient supply, and initiated to develop and operate small hydropower, biogas digester, solar stove, wind water pumping, small wind turbine, medium and low temperature geothermal utilization plus small tidal power station uninterruptedly. At that time in China's rural areas, burning plant stalks was the essential way of the energy supply. And then the development of biogas technology made the biomass can be better used, therefore, some areas began to use biogas instead of fuelwood. China has been accelerating the development of small hydropower since the founding of the country in 1949. Overall, development of renewable energy during this period in China mainly focused on the utilization of hydropower and rural biomass energy, the technical content was not high, and there were no systematic renewable energy policies.

 

1980s: Beginning to form policies with guiding significance With the development of the reform and opening-up, China's energy demand was increasing incessantly. Under this case, macro-policy environment in favor of the RE growth appeared in China. The “Agricultural Law of the People's Republic of China (PRC)” in 1983 pointed out that the use of straw in agricultural production could provide new energy and solve the problem of rural energy shortage. The “Water Law of the PRC”, which was enacted in 1988, encouraged the exploitation of hydropower resources. In the December 30, 1986, the “Opinion on Strengthening Rural Energy Construction” issued by the former National Economic Commission put forward the idea of "developing long-term planning for rural energy development". In addition to the formulation of guiding policies, China began to use economic incentives to support the development of renewable energy since the 1980s.

 

1990s onwards,  China's guiding policies on renewable energy have been further developed, and the national planning policies have also commenced to propose specific development goals. For instance, the “Outline of New Energy and Renewable Energy (1996-2010)”, released in January 5, 1995, pointed out that the actual use of renewable energy should be over 390 million ton of standard coal equivalent (tce) in the next 15 years (including the utilization of the traditional biomass energy). At the same time, the outline also pointed out that taxes reduction preferential policies for new energy producers or users would be given. In 1998, the “Catalogue of Industries, Products, and Technologies Currently Focused on Development by the State” pointed out that solar energy, geothermal energy, ocean energy, garbage power, biomass power generation and large wind turbines were included in the industries and products to be encouraged

 

2000-2005 years: the overall plan for renewable energy During this period, China began to issue overall plans for the development of renewable energy. In August 2000, the “2000-2015 Main Points of Development Planning of New Energy and Renewable Energy Industry” proposed that the annual development amount of new and renewable energy sources should reach 43 million tce in 2015, accounting for 2% of the total national energy consumption at that time (if small hydropower were included in, it would reach 3.6%). In 2002, the “10th Five-Year Plan for the Development of New Energy and Renewable Energy Industry” pointed out that the annual development and utilization amount of new and renewable energy sources (excluding the traditional utilization of small hydropower and biomass energy) should reach 13 million tce by 2005, solving the problem of no electricity for 1.3 million households of farmers and herdsmen in remote areas (about 500-600 million people) and providing nearly 200 thousand jobs.

 

2005-2015: Rapid and comprehensive development stage of renewable energy policies In 2005, “Renewable Energy Law of the PRC” was adopted, in which the article 4 clearly stipulated: "The state will arrange the development and utilization of renewable energy as the priority area of energy development, and promote the establishment and development of renewable energy markets by formulating various total amount target of the renewable energy and the corresponding measures. The State encourages various ownership entities to participate in the market of renewable energy, and will protect the legitimate rights and interests of renewable energy users.” This identified the priority development status of the renewable energy field in China from the legal level, indicating that China has taken a key step in the legal construction of renewable energy, and China's renewable energy policy has entered a rapid development stage. On the other hand, after years of developing, China's renewable energy industry achieved great achievements, and initially formed a certain scale. In view of the development status of renewable energy in China, the National Development and Reform Commission (NDRC) issued the "Medium and Long Term Plan of Renewable energy" in 2007 as a guiding document for renewable energy development in the new period. The plan made the overall goal of making renewable energy consumption ratio up to 10% by 2010 and to 15% by 2020.

 

Back to 2005 , The passing of the Renewable Energy Law (REL) in 2005 proven China’s commitment to renewable energy development within the 3 years after the REL, China’s renewable electricity capacity grew rapidly. From 2006 to 2008, China’s wind capacity installation more than doubled every year for  the first 3 years .Although it was a gigantic step  taken forward in sense of RE, The opinion leaders had some doubts based on some researches and also based on figures and facts about rapid growth of fossil fuel capacity. 

 

 

Again according to Jingli Fan From 2016 to the present, lets say today, green and sustainable development have become the mainstream of the current China. In the “Report of 19th National Congress of the Communist Party of China”, President Xi Jinping proposed the new concept of development: “Development is the basis and key to solve all problems in China . Development must be scientific development, and we must unswervingly carry out the concept of innovation, coordination, green, open and shared development". After entering the new era, China began to pay more attention to the green transformation of development, and the core of the transformation is energy transformation. In order to achieve development strategic targets of non-fossil energy consumption amount accounted for 15% and 20% of energy consumption in 2020 and 2030 respectively.

 

 

 

In between On September 4 and 5 of 2016 China hosted the 11th G20 summit in the city of Hangzhou, bringing together leaders from around the globe. .According to   To such meeting, bilateral cooperation is surely in China’s interest particularly with the emerging market like Turkey. In fact, the progress made towards convergence in the relations between China and Turkey has been more apparent during this summit. At the summit, China and Turkey highlighted new sectors for bilateral cooperation. Xi and Erdoğan signed four overarching agreements, covering almost most aspects of their economic ties in clean and renewable energy and coal, agriculture exports from Turkey to China, and the regulation of cooperation on nuclear security.[3] Cooperation in “infrastructure construction” (增强基础设施) and “energy field” (能源领域合作) have become the two key economic cooperation areas for both countries. Under China’s continuous economic reform and opening-up, and Turkey’s aspiration for industrialisation and modernisation, it is critical for both countries to make substantial progress in aligning China’s “One Belt and One Road” (OBOR) initiative with Turkey’s “Middle Corridor” plan.[iii] .This issue will be analyzed further in consecutive articles.

 

On September 2018, China’s National Development & Reform Commission (NDRC) has written a draft policy that would increase the renewable energy target from 20% to 35% by 2030. Perpetually, it has seemed that the Chinese 2030 renewable energy target of 20% was incredibly short given the volume of renewable energy it has been adding. For instance, in 2017, China installed more than 52 gigawatts (GW) of solar, which is roughly as much as has been installed in the United States since ever. According to some opinion leaders The renewable energy is growing and simultaneously dropping in price for sure .In the meantime .If the increase becomes law, it would certainly be remarkable news. Nevertheless, it’s going to take a long time to sort out what is really going on. One of the motives this target is being implemented is because the national government seems to be having difficulty slowing the construction of coal power plants. Reporting on emissions, coal consumption, etc., has been all over the map, and it appears that will continue. Satellite photos show unapproved coal power plant construction continuing based on the reports of The Guardian, Quartz and the China South Morning. Gratefully, the lately proposed Renewable Energy Portfolio Standards for 2030 will have some projections. Companies that do not meet the standards will be fined and the proceeds will be used to cover the renewable energy subsidies. China’s current five-year plan edicts that there should be no more than 1,100GW of coal by 2020, but the 259GW increase via new plants comes on top of 993GW of existing capacity in between. China will have a fifth of the world’s fossil-fuel power plants by 2040. If that occurs, there will be no chance that the world will punch the goals set under the Paris climate agreement and will be confronted with tragic climate change.

 

Carbon Tracker found that China’s coal fleet was essentially producing power for less than half the time it could have been generating energy. In industry terms, its utilization rate was below 50 percent.  That’s partly because China has other means to generate power and partly because the country is looking to cut air pollution. It’s a major underuse of very expensive assets. Projections for coming years are trickier. Carbon Tracker assumes China will levy some form of carbon pricing, starting in 2021 at $5 per metric ton of carbon dioxide emissions and rising to about $40 by 2040. That will add to the operating expenses of coal power plants, and eat into potential profits.. Based on those same carbon price predictions, it will be inexpensive to build brand new wind and solar farms in China than to operate an existing coal power plant in 2021 and 2025, respectively, according to Carbon Tracker.

 

 

 

This is the first time an analysis of power generation based on satellite images has been done, which means the results are likely to have large margin of error. For example, Carbon Tracker has already found that, when running its models on historical images of coal power plants, its predictions for how much power those plants generated were slightly higher than the actual data provided by the Chinese government. The models also make a number of assumptions to simplify calculations. And the models cannot predict a wild change in Chinese policy, which hasn’t been a rare occurrence in recent history. However, despite those caveats, this kind of analysis still provides new insights into coal’s future in China.

 

Mid November 2018 Reuters Beijing reported that ,China is close to introducing its first mandatory renewable power quota system by giving detailed targets for each of its regions, the National Energy Administration (NEA) said on Thursday (Nov 15), to boost the use of clean energy in the country. According to a draft NEA proposal, the central government would start to set minimum targets of renewable energy consumption by region from 2019. Local authorities would monitor compliance by power companies and consumers, according to the draft. The draft sketches setting regional quotas based on their renewable energy resources, with hydropower-rich Sichuan province in southwest China required to bring renewables to 80 per cent of total power consumption, compared with only 9.5 per cent in coal-dependent Shandong province in the east. The quota system, opposed by traditional coal-fired power companies, has been under discussion for some time. The draft proposal on November  followed two previous drafts issued in March and September. The March version proposed a quota of 91 per cent renewable power consumption in Sichuan and 8.5 per cent in Shandong. The system targets to lower the rate of wasted renewable power by giving clean energy generators priority access to the grid. Power from wind, solar and hydropower plants is often lost because its intermittent nature makes it difficult to schedule without disrupting grid operations. Nonetheless, the rates of waste, known as curtailment, have been declining. Companies covered by the scheme, comprising owners of captive power plants, was given some preferential treatment if they surpass the quota requirements, such as less burdensome enforcement of energy efficiency targets, according to the latest draft. Yet, they would be penalized if they fail to meet the mandatory targets. The final quota for each region was scheduled to be  handed out in the first quarter of 2019 and the assessment of policy compliance started from Jan 1 .The quota will be increased in 2020 when China looks to increase the portion of renewable energy use in its total energy mix, said the NEA. Beijing has set a national target to raise clean energy use to 15 per cent by 2020 and 20 per cent by 2030. It was at 13.8 per cent in 2017.

 

The progress of renewable energy in China has appealed global attention in recent years. In 2012, The world’s biggest energy consumer China’s installed capacity of wind and solar power was 61GW and 3.4GW respectively, while the annual electricity generated by renewables was only 2.1% of China’s total consumption. By 2017, China's wind and solar power capacity had increased to 168.5 GW and 130.06 GW respectively, and renewables were generating 5.3% of China’s electricity supply. Currently, China leads the world in terms of wind and solar power capacity. And with large-scale industrial applications, the costs have dropped substantially. Photovoltaic (PV) technology is a good example. The price of PV modules decreased from about 30 Yuan per watt in 2007 to about 10 Yuan in 2012, and by 2017 it had decreased further to just 2 Yuan per watt. The success of China's renewable energy drive fully exemplifies the effectiveness of China’s on-grid tariff subsidies. The advantage of the on-grid tariff policy through which the government can make renewable energy production more competitive and eye-catching to businesses and investors is that it anchors the revenue of power generation throughout the entire life cycle. In this manner, it conveys a clear price signal to investors, and can efficiently support the primary stages of renewable energy development.

However, beside the rapid expansion of installed capacity, the total amount of renewable subsidies is also rising rapidly. Based on the average on-grid electricity tariff, the total amount of wind and PV subsidies in 2012 came to about 60 billion yuan, a figure that had increased to 170 billion yuan by 2017. Although the government reduced the subsidy several times during this period, the total amount of subsidy continued to climb. The subsidies for renewable energy should be compensated by the renewable surcharge collected from end consumers. China’s renewable surcharge was 0.015 yuan/kWh in 2012, and rose to 0.019 yuan/kWh in 2016. There was a surplus of 15 billion yuan in the account of China's ‘renewable energy subsidy’ in 2012, but by 2017 it had turned into a large deficit of about 80 billion yuan.

Therefore, China’s expansion of renewables will inevitably lead to a rapid increase in subsidies. Solutions to accommodate rapid renewable expansion usually lead to two phenomena: one is the rapid growth of end consumer tariffs, such as in Germany, and the other is maintaining high subsidies, such as in China, but with a large subsidy deficit.

The rapid development of renewables in Germany has led to a significant rise in electricity tariffs, which have nearly doubled over the past decade, making Germany one of the countries with the highest electricity tariffs in Europe. Of these tariffs, the largest incremental has been the renewable energy surcharges. At present, Germany's renewable surcharge roughly amounts to 0.8 yuan/kWh - or €0.11 - which alone is equivalent to China's average end consumer tariffs. This has had a considerable negative impact and has provoked great opposition. As a result, the development of renewables in Germany has slowed sharply in the last two years.

Last year, there was an appeal to increase China’s renewable surcharge to 0.3 yuan/kWh in order to balance the subsidy deficit. But it did not happen. Instead, the government this year lowered the end consumer tariffs for industrial and commercial consumers by 10%. It would seem it is not possible to increase funding for renewable subsidies. At the same time, the installed capacity of China's PV surged significantly. In the first nine months of 2017, about 42GW of new capacity had been installed and this increased the subsidy bill by nearly 30 billion yuan.

At present in China the quality of renewables, rather than the quantity, should be prioritized. Since competitiveness is crucial to future development, subsidies should be designed in such a way as to favor competitiveness. The current approach - subsidy based on quantity (generation hours) - could possibly prompt some enterprises to overlook the long-term interests of the industry in order to make short-term profits. The reduction of wind and solar in China is largely due to the imbalance in China's energy endowment. The majority of renewable generation is concentrated in western China, but the market’s capacity to accommodate wind and solar power there is very limited. Despite the government's efforts, the relatively large curtailment is likely to endure, as long as renewable installed capacity continues to grow rapidly. As such, the government might need to consider decreasing subsidies to contain the enthusiasm for renewables. Further, with the current electricity surplus in China, transferring subsidy reductions into cost reductions can reduce inefficient capacity installations. Reducing subsidies can also force renewables manufacturers and power plant investors to consider future investments more carefully, and encourage them to look for more economical projects.

 

 

According to the IEA, China will account for over 40% of global renewable capacity expansion from 2018 to 2023. Wood Mackenzie estimates that renewables will account for nearly 20% of China's power output in 2035, while coal will drop to less than 50%.However while the Chinese government seems committed to its renewable energy push, the question is how this commitment will hold up in the face of a slowdown in growth. According to Takuma Yatsui, senior economist at Mitsui & Co. Global Strategic Studies Institute, China's environmental efforts are "currently relaxed to counter the economic slowdown." He noted that a draft government policy published in September removed the cap on winter steel production in the northern part of the country, possibly in response to the expected impact of the trade dispute with the U.S. on the economy.

 

 

As a result Fossil Fuel investments  and Renewal Energy in China are currently inseparable and conflicting opposites,Therefore    fossil-fuel power plants shall remain for certain time in China Energy Mix although  renewable expansion is increasing rapidly

Ref

https://www.weforum.org/agenda/2018/05/china-is-a-renewable-energy-champion-but-its-time-for-a-new-approach/

ay 2018 Lin BoqiangDirector, China Center for Energy Economics Research

 

https://qz.com/1419899/satellite-images-reveal-coal-power-is-bad-business-for-china/

 

https://www.theguardian.com/world/2018/sep/26/satellite-images-show-runaway-expansion-of-coal-power-in-china

Satellite images show 'runaway' expansion of coal power in China -Adam Vaughan @adamvaughan_uk Wed 26 Sep 2018 

 

https://www.researchgate.net/publication/223528760_China's_renewable_energy_policy_Commitments_and_challenges

https://asia.nikkei.com/Spotlight/Cover-Story/China-s-renewable-energy-surges-after-state-backing


[ii] The Development of China’s Renewable Energy Policy and Implications to Africa Jingli Fan1, 2, Jiaxing Wang1 , Shijie Wei1 , Xian Zhang3, * 1 School of Resources & Safety Engineering, China University of Mining & Technology, Beijing (CUMTB), Beijing 100083, China 2 State Key Laboratory of Coal Resources and Safe Mining, China University of Mining and Technology, Beijing 100083, China 3 The Administrative Centre for China’s Agenda 21 (ACCA21), Ministry of Science and Technology (MOST), Beijing 100038, China   IOP Conf. Series: Materials Science and Engineering 394 (2018) 042034 doi:10.1088/1757-899X/394/4/042034

 

Uluslararası Politika Akademisi - A glimpse of china-turkey relations at the 11th g20 summit 23 Oct 2016 Xiaoli GUOPhD CandidateAustralian National University

http://politikaakademisi.org/2016/10/23/a-glimpse-of-china-turkey-relations-at-the-11th-g20-summit/

 

 

  

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