Yi Yuechun, President of China National Solar Thermal Energy Alliance and Vice President of China Renewable Energy Engineering Institute, delivered a keynote speech at the conference, and introduced the progress of the first batch of solar thermal power demonstration projects. The speech is summed up as follows:
On September 13, 2016, the GNXN [2016] No. 223 document “Circular of the National Energy Administration on the Construction of Solar Thermal Power Generation Demonstration Projects” issued by the National Energy Administration determines the first batch of 20 solar thermal power generation demonstration projects, with a total installed capacity of 1.349 GW. Projects are located in Qinghai Province, Gansu Province, Hebei Province, Inner Mongolia Autonomous Region, and Xinjiang Autonomous Region. The “Circular” requires that filing be completed before September 30, 2016, and the projects be completed and put into operation before the end of 2018 in principle. This ushers in the commercial development of solar thermal power plants in China. The progress of the first batch of solar thermal power demonstration projects has become the focus of attention.
First of all, we recall the purpose of the construction of solar thermal power generation demonstration projects in China. There are chiefly two goals: the first is to expand the scale of industrial use; and the second is to form the industrial capability through demonstration projects, including development and construction of system integrators, so as to lay a foundation for subsequent large-scale development.
Since February 2017, China Renewable Energy Engineering Institute, as per the requirements of the National Energy Administration, organized the research for the first time into the construction progress of the first batch of solar thermal power generation demonstration projects. At the time, all demonstration projects have completed the filing, and nearly half the projects have completed the special research for the access system, water, and land use and the like.
On August 2-3 and August 7, 2017, prior to the convention of the 3rd China Solar Thermal Electricity Conference, China Renewable Energy Engineering Institute arranged the Electric Power Planning and Engineering Institute and China National Solar Thermal Energy Alliance to hold high-level closed-door meeting, in order to make one-on-one exchange and research into the latest progress of demonstration projects. I hereby make a brief introduction.
Overall progress of demonstration projects
According to the preliminary research results, the CGN Delingha 50MW trough power plant commenced its construction on August 1, 2014. The bidding work has been completed and 57% of investment has been made. The SUPCON solar power Delingha 50MW tower power station commenced its construction in October 2016, and 60% of the bidding has been completed, and 12% of investment has been made; Shouhang energy-saving Dunhuang 100MW tower power station commenced its construction on November 19, 2016, and the bidding for steam turbines and generator has been completed; contracts for main transformers and standby transformers have been awarded, and 30% of investment has been made. The above three projects have entered the substantial construction stage, and are expected to be put into operation by the end of 2018; the progress of remaining projects remains to be accelerated.
Four main problems in the promotion of demonstration projects
Overall, demonstration projects face the following four main difficulties and problems in its progress:
First, problems in management in the early stage. Some enterprises got off to a late start in the preliminary work, and their progress is slow in going through procedures for land, forestry, environmental protection, water conservation, and power grid access. Typical difficulties include: the change of site due to the nature of the land; long time of coordination in the change of site, leasing period, and grassland occupancy; land cost increase in some projects; coordination of liaison between forestry and land departments; requirements of environmental protection and water protection for the fire and corrosion resistance technology for solar thermal power generation to be discussed; procedures and requirements for power grid access system, and guarantee of absorption. Second, some local governments are not acquainted with the solar thermal power projects in the process of procedures for preliminary work, resulting in longer period of processing in some aspects.
Second, problems in technical aspects. There is little experience upon which solar thermal power projects can draw. The adaptability of foreign technical experience to China’s environmental conditions remains to be verified. A reasonable cycle is guaranteed for the construction drawings design. If the rush work of other mature power generation projects is adopted, it is difficult to ensure project quality; second, the bidding and bid-awarding process of EPC and important equipment is too long, and the equipment supply speed remains to be guaranteed; technical program optimization and declaration of demonstration projects and commitment conditions need further study and implementation; finally, the standard methods for key equipment, technology and operation process need to be strengthened, and communication time shall be shortened.
Third, problems in project financing. First of all, new technology means new risks, there are no rules for novel things, the time for electricity price remains to be clarified, and there are misgivings about power supply ration and subsidies, with the result that financial institutions have misgivings about granting financing for solar thermal power projects led by private enterprises; financing costs increase accordingly. State-owned enterprises are more cautious about new things, and exercise stringent control over the rate of return, equity ratio, and investment decisions, hindering the progress of some projects.
Fourth, problems in industrial self-discipline. Mainly, the basic threshold conditions of the industrial chain and reasonable profits need to be protected. We shall prohibit the participation in bidding at below-cost price, maintain a fair and open competitive environment, and prevent ultra-low bidding of “exhausting themselves and starving the others to death”. Member companies of China National Solar Thermal Energy Alliance shall ensure quality and progress, and participate in competition within their ability, rather than win the bid at any cost and ultimately compromise the healthy development of the industry.
In addition, the basic threshold conditions of the industrial chain and reasonable profits need to be protected.
Three suggestions for the follow-up work
First, we must foster the coordination of demonstration projects, and improve the corresponding management. It is hoped we take advantage of the demonstration project research to coordinate and solve problems which occur in the project implementation process and promote the construction of demonstration projects. Specifically:
1. Enterprises must properly handle their own work to support the development of this industry.
2. make positive response to and coordinate with the relevant government bodies, strive to obtain the commitments of governments, and implement the relevant national policies.
3. continue to sum up experience, and strengthen the project construction entities’ operation and management and technical ability through the demonstration project implementation. Reasonable duration and subsidies shall be guaranteed; the program optimization shall meet the actual needs, technical route or major localization program. About the National Energy Administration’s requirements for project declaration, the company’s own commitment for declaration, and the key requirements which affect scores, it is hoped that the project companies should take all aspects into account. The success of demonstration projects may become key yardsticks for encouraging local governments and related enterprises to participate in follow-up project development and construction.
Second, strengthen the project financing coordination. Industry should strengthen the project entities’ construction and operation and management capabilities, improve the anti-risk ability of solar thermal power technology, and boost the community’s confidence in the sustainable development of the industry through the implementation of demonstration projects. Through our efforts, we may also gradually dispel concerns banks may hold. On the other hand, putting forward problem objectively and reasonable proposal, making communication, coordination, and implementation of power supply ration and subsidy policies with relevant government bodies, and strengthening the country’s support for the solar thermal power emerging industry of strategic significance also stimulate the initiative of the project development enterprises.
Third, strengthen the industrial chain cooperation and promote follow-up development. We should increase cooperation in the industrial chain and promote the completion of the first batch of demonstration projects through, inter alia, integrating the whole industry platform, and providing technical support for the development of China’s solar thermal power industry. At the same time, we shall sum up experience and improve technical standards and methods to promote large-scale, industrial development of China’s solar thermal power generation.
As the global response to climate change and energy change initiatives continue to advance, clean energy has become a focus area in the world’s green economy development. Whether the implementation of the first batch of solar thermal power demonstration projects is carried out properly and recognized exert a profound and positive impact on the solar thermal power development. It is that the project entities shoulders the task of promoting the industry development, and do a good job in organization and construction of projects; it is also hoped the member units take advantage of their strengths and make up for weaknesses in the industrial chain, contributing to the healthy, sustainable development of the solar thermal power in China.
As the president unit of China National Solar Thermal Energy Alliance, China Renewable Energy Engineering Institute will cooperate with other units to handle the planning and research and technology, and information services, and build a platform of communication for China National Solar Thermal Energy Alliance members. We are dedicated to providing technology, information support and services for governments at all levels, development enterprises and solar thermal power-related units, with a view to jointly promoting the sustained and healthy development of the industry.
