Wang Jixue’s Interpretation of “Notice of Reporting Progress on Construction of Solar-thermal Power Generation Demons...

Recently, National Energy Administration issued “Notice of Reporting Progress on Construction of Solar-thermal Power Generation Demonstration Projects” (hereinafter referred to as “Notice”), requiring that energy authorities of all the provinces should report the construction status of demonstration projects to the New and Renewable Energy Division of National Energy Administration, as well as to China Renewable Energy Engineering Institute, before February 15, 2017. The notice pointed out, important contents different from what had been defined in previous notices issued by National Energy Administration must be emphasized in reports, such as information on investing enterprises, technical routes, technology sources and system integration enterprises of such demonstration projects. It was required that cooperative relations between investing enterprises and integrators of critical technology and equipment, which had been defined during the competition and selection for demonstration projects, shall not be changed randomly without authorization. In order to better implement relevant industrial and pricing policies of National Development and Reform Commission as well as National Energy Administration, and make good connection during practical construction, the reporter from National Solar Thermal Energy Alliance arranged an exclusive interview with Wang Jixue, the Deputy Director of New Energy Department of China Renewable Energy Engineering Institute.


Reporter: The “Notice”, issued by National Energy Administration recently, pointed out “cooperative relations between investing enterprises and integrators of critical technology and equipment, which have been defined during the competition and selection for demonstration projects of solar-thermal power generation, shall not be changed randomly without authorization”. How should we understand it correctly?


Wang Jixue: In September 2015, National Energy Administration put forward clearly in an issued notice that in order to successfully enlarge industrial scale of solar thermal power generation and develop system integrators, enterprises should autonomously select the best technical routes and technology integration patterns, and make overall recommendation after preliminary review by energy authorities at the provincial level. For this purpose, it also gave requirements on the number of technical routes and owners. After multilateral coordination, later, it issued “Notice of Construction of Solar Thermal Power Generation Demonstration Projects from National Energy Administration” (No. [2016]233) in September 2016, clearly pointing out “all demonstration projects should strictly observe requirements on technical indexes promised during the review” and “supervision and evaluation should be conducted regarding technical routes and indexes during implementation of all projects”. These statements fully reflected the consistency of two documents regarding core objectives. Meanwhile, the No. 233 document also displayed five major contents of demonstration projects including project names, investing enterprises, technical routes, technology sources and system integration enterprises, and system conversion efficiency (enterprises’ promises). Therefore, if such contents have been changed during implementation of demonstration projects, they must be stressed in the reporting of this time. 


The statement, “cooperative relations between investing enterprises and integrators of critical technology and equipment, which have been defined during the competition and selection for demonstration projects of solar-thermal power generation, shall not be changed randomly without authorization”, is appropriate as for the current policies related to solar thermal power generation in China, as well as for the fairness of participating enterprises. For the moment, we can see that during project implementation some enterprises don’t have a sufficient understanding about the original intention of the country to support the development of solar thermal power generation, or the preciseness of relevant policies. For example, they changed important contents that they had originally promised and defined, such as technology sources and system integration enterprises. Therefore, National Energy Administration stressed “shall not be changed randomly”. 


Reporter: After “Notice of Organizing Construction of Solar Thermal Power Generation Demonstration Projects” was issued by National Energy Administration, 109 projects were reported totally. However, only 20 projects were selected, so what made these projects win? Was it because of such “defined contents”?


Wang Jixue: In fact, National Energy Administration explained in the “Notice of Organizing Construction of Solar Thermal Power Generation Demonstration Projects” about requirements on application reports of demonstration projects, mainly including: resource conditions and technical requirements, requirements on preparation of implementation plans for demonstration projects, boundary conditions for economic analysis, and controlled number of projects from the same technical source and of the same type. Indeed, these finally selected projects were determined after consideration based on various requirements and evaluation by experts according to objective criteria. As no complete technical and equipment manufacturing systems are available now for solar thermal power generation, the number of projects from the same source and of the same type is controlled to reduce repeated construction and waste, and guarantee the service efficiency of an insufficient renewable-energy fund of China. For example, it is required that when a project owner has more than one project in a province (region or city), different technical routes should be adopted; an enterprise is allowed to apply for projects in different provinces (regions or cities), but the total number of projects should not exceed three, and number of projects with the same technical route and from the same source should not exceed two. Proportions of three technical routes of the tower type, the trough type and the Fresnel type, and heat-transfer media in the final list of demonstration projects were recommended according to announced review conditions as well. 


[The first batch of demonstration projects involves three technical routes of the tower type, the trough type and the Fresnel type. Among these projects, there are nine tower power station projects, seven of which adopt molten salt as the working medium and two of which adopt water as the working medium; there are seven trough power station projects, among which five adopt oil for heat transfer and molten salt for heat storage, and two adopt molten salt for heat transfer and storage; there are four Fresnel projects, among which one adopts molten salt for heat transfer and storage, another one adopts oil for heat transfer, and the rest two adopt water as the working medium and solid concrete for heat storage]


Reporter: Some comments in the industry point out, changes in the defined contents may cause unfairness. So, what will be the result if there are “randomly changed” contents “emphasized” in progress reports of this time? 


Wang Jixue: I should say, previous two questions have already offered some of the answer. As required by policy documents, demonstration projects should be subjected to acceptance check as well as supervision and evaluation. All of us should realize that such demonstration projects belong to not only enterprises but also the industry and the country, and that the development of solar thermal power generation in China needs to be driven by acceptance check as well as supervision and evaluation. Therefore, if enterprises randomly change major contents without authorization, on one hand, they will meet more policy-related difficulties in the process of technical adjustment, and on the other hand, earnings of such enterprises during the implementation of existing policies may be influenced due to long-time communication. In addition, if selected enterprises adjust objective scoring points of original competition and selection, obviously it is not fair to those unselected enterprises.  


Reporter: As project implementation at the early stage involves bidding for EPC and critical equipment, how to make sure the bidding work can comply with the requirement that “cooperative relations between investing enterprises and integrators of critical technology and equipment, which have been defined during the competition and selection for demonstration projects of solar-thermal power generation, shall not be changed randomly without authorization”?


Wang Jixue: It is not proper to give a general answer to this question. We require that major contents should not be changed randomly without authorization, but it doesn’t follow that no technical content can be changed. For example, it is OK to upgrade technical indexes of current technical routes. Therefore, it is absolutely feasible to conduct public bidding for EPC and critical equipment such as steam turbines and generators through a market oriented manner, and it is also feasible to conduct separate biddings for equipment, design, construction, etc, just as what are applied in ordinary renewable energy power generation projects.


Reporter: What do you think of this “Notice”?


Wang Jixue: By establishing demonstration projects of solar thermal power generation, National Energy Administration aims to enlarge the industrial scale of solar thermal power generation and build system integration capacity. After the release of No. 223 document, all demonstration projects have actively carried out relevant work in general, and relatively good results have been achieved. However, on one hand, enterprises neglected somewhat the policy goal during the project implementation, and even failed to fully meet the requirement of reporting project progress; on the other hand, some unselected enterprises reflected relevant situations on different occasions. Therefore, we believe that it is timely for National Energy Administration to require enterprises to report relevant construction status at this time. Its purpose is still to remind all concerned enterprises that previous two documents must be strictly implemented to truly exert the function of demonstration projects as an industry booster rather than mere investment behavior of enterprises. Thank you! (Reported by Du Fengli)