China now active member of IRENA

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China high RE-ambitions confirmed by entering the International Renewable Energy Agency

After a period as observer, China has now formally entered IRENA as member country. At the 4th session of the IRENA assembly Liu Qi, the vice director of China’s National Energy Administration and head of the Chinese delegation, recognized the work carried out of IRENA as a very important part of the global development of renewable energy. International cooperation is necessary to promote RE, and IRENA is a good platform for China’s engagement in such cooperation.

China’s active involvement in IRENA is a clear sign on the Chinese governments commitment to an ambitious development of renewable energy in China. The activities within the framework of IRENA will help in overcoming the barriers in China for reaching the RE targets. Furthermore China sees IRENA as a platform for strong international cooperation on removing trade barriers for RE globally and for strengthen the deployment of RE in the developing countries. China will actively support this development by support to capacity building and training activities to promote knowledge and state-of-the-art solutions globally.

Successful IRENA session

The fourth session of the IRENA assembly with more than 600 participants showed a consolidated organisation with strong support from the member countries and with useful products to showcase. The IRENA REMAP was presented, giving clear indications that it is possible to reach the UN targets of doubling the share of RE towards 2030 compared with 2010, and that it can be done without additional costs, especially taking into account the potential for enhanced energy efficiency. Also the IRENA cost analyses and analyses of job creation give a good platform for dissemination of trustworthy information about the real possibilities for RE in the global energy system. See more about the IRENA activities and the results from the assembly at the IRENA web site.

 

Africa Clean Energy Corridor – Warming up to the IRENAs annual meeting 18 to 19 January

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Africa Clean Energy Corridor – Warming up to the IRENAs annual meeting

IRENA have it’s fourth session of the Assembly in Abu Dhabi today and tomorrow. For me it is a special occasion since China formally will be member of IRENA, hopefully to the benefit for both IRENA and China. More about this in following blog posts.

Yesterday – as a warm up to the Assembly – focus is on Africa and how to establish a Africa Clean Energy Corridor – from Cairo to Cape Town. A number of ministers from Eastern and Souther Africa Power Pool countries discussed the potential benefits of a large scale regional initiative.

The background for the discussion is, that the current energy supply in the area is dominated by fossil fuels, the energy demand is rapidly growing, and so is the exchange of energy between the countries through new interconnectors. The potential for renewable energy (RE) usage is very high, but without special initiatives fossil fuel technologies will probably continue to play the major role in the energy supply in the future.

Among the main challenges for the deployment of RE are how to make such project bankable, and how to reduce investor risk. Also lack of knowledge about RE technologies in the different countries is blocking for a rapid development, and furthermore lack of transmission capacity might be a serious barrier for the efficient utilization of the huge RE potential, which are uneven distributed in the Eastern and Southern Africa.

The ministers and representatives for the participating countries pointed to the need for active policy actions and determination, as well as a common understanding between politicians about the possibilities for RE in the region. Capacity building is considered as an very important activity for enabling a more rapid deployment of RE, and also the importance of electricity connections, not only between the countries but also to areas outside of the region was emphasized as a necessary next step.

A partnership panel supported the overall picture drawn by the ministers. China as example emphasized the need to actively promote RE before fossil fuels and to pay attention to the development of the infrastructure to integrate RE.

As a conclusion of the meeting the involved countries approved a final communique, which commit the countries to work with IRENA on the following Action Agenda to promote and accelerate the development of the Africa Clean Energy Corridor:

i. Zoning and Resource Assessment: Partner with expert institutions to identify zones for the development of renewable power plants in areas of high resource potential and routes for the efficient transmission of electricity to load centres. IRENA should expand its Global Renewable Energy Atlas to help identify promising development zones.

ii. Country and Regional Planning: Work with regulatory and planning bodies and expert institutions, including at the regional level, to encourage integrated resource planning that fully considers renewable power options to optimize investments in generation and transmission infrastructure. IRENA should also support the inclusion of more renewable power in country and regional plans by providing targeted information and data, especially on the declining costs of renewable energy technology.

iii. Enabling Frameworks for Investment: Cooperate closely with international financial institutions to encourage innovative financing structures, such as loan guarantees, that reduce risk and leverage government and donor resources. IRENA should support the development of government policies to enable investments in renewables and the creation of bankable project proposals through the Project Navigator.

iv. Capacity Building: Work with regional bodies, countries, donors and research institutions to build the human and institutional capacity to plan, construct and operate power systems with a greater share of renewable generation. In this context, IRENA should facilitate the sharing of best practices and lessons learnt.

v. Public Information: Raise awareness on the Africa Clean Energy Corridor at the global, regional, and country levels to promote the benefits of the Corridor in providing secure, sustainable and affordable energy to meet rising energy demand.

The communique will be presented at the Assembly session tomorrow as the basis for the next years’ platform for cooperation between IRENA and the Eastern and Southern Africa.

Read more here

 

Green renevenus for green energy – full report launched

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The full CNREC – IIISD report on green revenues is now released. The report includes case stories from eight countries on how green revenues can be used to stimulate transition towards a more green energy system and point to the potential impact for China of such policy measures. Find the report here and a short wrap-up of the summary in my previous post.

 

Time for more flexibility in the Chinese power system

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Lack of flexibility is one of the biggest obstacles for integration of fluctuating renewable energy in the Chinese power system. The thermal power plants and the transmission grid are currently operated too inflexible, which especially in North China results in massive curtailment of wind power.

Looking more into the problems reveals both technical challenges, lack of economic incentives and regulatory issues as the main reasons for this inflexibility, which damages the further development of renewable energy in China.

Fortunately experiences from other countries show that these problems can be overcome. In Europe curtailment of renewable energy is very small, even in areas with much higher share of renewable energy that in the Northern China.

One of the secrets behind Denmark’s large share of wind power is the extreme flexibility of the thermal fossil fired power plants. Due to years of continuous effort, most of the Danish power plants have very low minimum capacity output for on-grid operation, they have fast up and down regulating capabilities, and they are able to have a quick start-up from zero to full load, compared to power plants in other countries. Establishment of a time-dynamic pricing for power purchase via a well-functioning market has been a strong motivator for this development. The dynamic pricing, with high prices when the demand is high and uncontrolled power supply is low and visa versa, send a clear signal to the power producers when to produce and when to avoid producing.

 

Danish experiences were presented at a CNREC-RED expert meeting on flexible power plants 4 December 2013

Danish experiences were presented at a CNREC-RED expert meeting on flexible power plants 4 December 2013

Flexibility for the thermal power plants was the topic to an expert meeting on 4 December 2013, arranged by CNREC and the Sino-Danish RED program. Experts from Denmark shared their experience in how to make coal-fired power plants more flexible. The meeting also discussed the lack of economic incentives for the Chinese power producers to operate more flexibility.

You can find more information about the meeting and the presentations from the meeting here.

 

Should China link eco-tax and RE subsidies?

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CNREC and IISD looks at green revenues for green energy

Earmarked revenues from enviromental taxes could be one of the ways forward for China to ensure the needed subsidies for it’s ambitious development plans for renewables. The International Institute for Sustainable Development (IISD) and the China National Renewable Energy Centre (CNREC) are currently finalising a report on this issue, looking at best-practice examples from other countries and the implications for China.

Summary report on Green Revenues for Green Energy

Summary report on Green Revenues for Green Energy

The preliminary results of the analyses has been published in a summary report, and while we wait for the whole report to be ready, here are the key issues and findings:
1. Environmental taxes can be pro-growth and pro-competitiveness
2. Revenue stability can be ensured with adjustments, price caps and price floors
3. Revenues can promote renewables, as well as protecting the vulnerable, improving  competitiveness and building policy acceptance
4. Policy stability increases leveraging of private finance
5. Multiple environmental fiscal policies, including taxes and trading schemes, can and do coexist in many countries
6. Renewable energy revenues need good management and governance if they are to achieve targeted objecives efficently.

These bullit points are explained in more detail in the summary report. Download it here!

 

China: Social, economic and environmental development must be coordinated

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New report from CCICED on China’s environmental protection and social development

At the annual meeting 13 to 15 November 2013 in the China Council for International Cooperation on Environment and Development (CCICED) a Task Force for China’s environmental protection and social development launched a summary report with 6 recommendations for how to ensure development of an “Ecological Civilisation”. This vision includes a harmonious society, sharing the fruits of development and safeguarding social justice and equity, but there is an urgent need to deepen the currently weak understanding of environmental and social relationships, and to identify priority fields for action in order to achieve this vision.

The task force operates with a framework for policymakers: 1) Awareness, 2) behaviour and participation, and 3) coordinated governance. The report points to the more soft topics in the necessary transformation of the Chinese society with focus on sustainability and environmental protection, and it sets up a model for how environmental behaviour, public environmental governance and environmental values can be coordinated and jointly developed.

The six recommendations from the Task Force starts with a recommendation on elaboration a vision of coordinated social, economic and environmental development for 2050 and development of a phased plan of policy and actions for the period to 2020. The recommendations also points to a number of activities within the next years to strengthen the long-term vision and the practical next-steps towards more environmental awareness, behaviour and governance. As example, the report suggest that the next five-year plan should be listed as the National Economic, Social and Environmental Development Plan, so that environmental policy and the associated planning will become a significant item in parallel with economic and social policies. Also and Environmental Impact Accessments (EIAs) should be introduced for major policies.

Policy and action framework - from the CCICED report

Policy and action framework – from the CCICED report

 

The Task Force comprises both Chinese and international experts, including high-level people from the Research Office of the State Council and from the Energy Research Institute under NDRC. It is definitely worth reading. Find the report at CCICED website.

 

Bio-energy a hit in China

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Bio-energy is a hit in China. At least if you judge by the overwhelming interest from Chinese participants in the 2013 China International Bio-energy Summit, which were held on 4 and 5 July.

2013_China_International_Bio-Energy_Summit___Expo

Both the plenum sessions and the more technical parallel sessions were quite packed with  participants with appetite on knowing more about the possibilities in biomass and bio-energy for China. I had the fortune to be invited to moderate a plenum session on regional experiences on the use of biomass for energy in Canada, Denmark, Austria and Brazil, which gave both an impressive and kaleidoscopic overview of the many different possibilities for use of bio-energy – from power and heating production to biofuels in various forms.

The second day I hade a brief introduction to the Danish biomass experiences for heating, which started in the 1980’ties. Today biomass has an important role in Denmark’s ambitious target for a non-fossil fuel free energy system in 2050. See my presentation here: biomass for heating in Denmark-handouts.

 

Danmark 2012: 30% wind power and no curtailment at all – how is it possible?

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2012 was a new record year for wind power in Denmark. Last year the wind power production in Denmark amounted to 30% of the Danish electricity consumption, while in 2011 the figure was 28,2%. This is of course good news for the global environment but due to Denmark’s small size the biggest contribution to the global environment might not be the CO2 reduction itself but the Danish showcase: It is possible to have a high share of fluctuating electricity production in the energy system without curtailment at all. And 30% is only a step towards the even more ambitious target of 50% in 2020. Right now the next off-shore wind farm is being established in Denmark – see the pictures here. (The picture below is the Danish wind farm Middelgrunden near Copenhagen on a cloudy October day in 2012).

Middelgrunden near Copenhagen

But what is the secret behind the large share of wind power, and what can China learn from Denmark?

A number of factors enables the high wind power penetration. Denmark has strong transmission lines to the neighbouring countries and access to hydro power storage in Norway. And a well functioning electricity market ensures optimal use of these interconnectors and the optimal combination of wind power and hydro power. The dynamic pricing of electricity created by the electricity market send price signals hour by hour to the producers and consumers. When the electricity production is high due to wind power and combined heat and power production (CHP), the electricity price is low; and when the wind power production is low (or zero) the price gets higher. This system also gives strong incentives for the power producers to make their thermal power plants more flexible. In facts, some of the coal fired power plants in Denmark can produce electricity and heat at a level of 10% of their maximum capacity. In China the requirements for minimum production is 50% of the max. capacity for the coal-fired power plants. All Danish CHP plants have also heat storage attached, which makes it easier to decouple heat and power production. When the electricity price is high, the CHP plants produces electricity and surplus heat can be stored in the heat storage, which basically is a large water tank. When the electricity price is low, the heat consumption is covered by the heat storage alone. And when the electricity price is very low, it can be beneficial to use electricity to warm up the water in the heat storage instead of running the thermal CHP plant. The combination of wind power, hydro power and thermal CHP plants with heat storage gives a very flexible system which is the physical explanation behind the high RE share in the Danish electricity supply.

To fully understand the Danish success of integrating wind power, you should also take into account the institutional and the “mental” framework for the electricity supply sector. In many countries – also in China – wind power is often regarded as an “add-on” to the “normal” electricity supply based on thermal power plants – fossil fuel or nuclear. The add-on RE power then is supposed to take care of its own problems, e.g. balancing the fluctuating production, and if it is not possible, then the easy solution is to curtail it, e.g. to stop the production from the wind farms, because the wind farm is causing the problem. But in Denmark, wind power is regarding as an integrated part of the electricity supply. Balancing problems is therefore a system problem, not a problem for the wind farms. This mental change in the perception of the electricity system is important for solving the integration challenges. Also the institutional set-up is important. Years ago the electricity sector was one integrated monopoly. Today the Danish grid operator (or Transmission System Operator – TSO) have been totally independent of the electricity producers for more than 12 years and it acts totally neutrally towards all power producers. Furthermore the large power producers in Denmark owns a large share of the wind power plants and integrate them into their portfolio of power plants in the daily operation. And by setting ambitious goals for the further development of RE power in Denmark (50% in 2020, 100% in 2050) the Danish government encourage both the TSO and the power producers to integrate RE in their planning process. The long term grid planning is thereby targeted at making these goal feasible, not only in Denmark but also in a European context, where the European TSO’s makes 10 years grid plans every second year.

And what are the lessons learned for China?

Firstly it is important to start considering RE power as part of the whole electricity system, not as an add-on to the thermal power system. Secondly it is urgent to setup economic incentives for flexibility for the power producers and for the use of local and regional transmission lines. Dynamic pricing is essential, but it is not necessary to introduce a complete market-setup to create this – a system with the system dispatch centres as vehicles for flexibility could be establish without a full market, like in Denmark where the electricity market evolved over a number of years, starting with more simple measures. When such economic incentives are in place, I am quite sure that the technical solution like flexible thermal power plant and heat storage at the CHP plants would develop rapidly.

Also an integrated planning process combining grid planning with planning for energy efficiency and energy supply would strengthen the integration of renewables, the development of smart grids and the use of the energy demand as part of the overall system flexibility. Maybe China could get inspiration from the European approach with the 10 year grid development plans and market studies with an even longer time horizon.

Of course China is China, and she has to develop her own solutions to the energy challenges. The Danish experiences and lessons in integration of RE can however support the analytic development of measures, methodologies and processes, which are necessary for the development of a sustainable energy system with a high share of RE in China. The Sino-Danish RED program is one example on how China and Denmark work together on such a development.

 

Kick-off of the China Solar Roadmap

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This week the preparation of a comprehensive Chinese solar roadmap was launched in Beijing. The roadmap will look at solar PV, concentrated solar power (CSP) and solar thermal technologies and analyse the technology development trends, international and national market trends as well as the possibilities and challenges for the Chinese solar manufactures. The roadmap will be finalised by the end of 2013. Solar_thermal_in_Beijing

The Solar Roadmap is sponsored by the Sino-Danish Renewable Energy Development (RED) Program and it is supervised by the China National Renewable Energy Centre – CNREC. The analyses will be carried out by a large number of leading Chinese experts under the umbrella of China Renewable Energy Society supported by international solar experts participating in the IEA Solar Technology Initiatives.

At the kick-off meeting on 29 January 2013 I had the possibility to wrap up the plenum discussion with these words:

“We already have a number of international and national solar roadmap and it is of course very useful to learn from these experiences. But it is also important to realise that the Chinese roadmap should focus on the Chinese context. The solar market is a global market with China as one of the major players on the manufacturing side. Thus the roadmap should look into the  international market development expectations. Also the technology development is international and international development trends are therefore important frameworks for the Chinese roadmap. But the Chinese roadmap must address the challenges and possibilities for solar in the Chinese energy system, and also address the short term an long term possibilities and challenges for the solar manufactures.

The Chinese ambitions on deployment of solar installations are very ambitious, especially on the PV installations. This month NEA announced a target of 10 GW of installed capacity for 2013, about 10 times the installation in 2012. For solar thermal, especially large scale systems, the potential might not have be fully understod yet. For both technologies this roadmap will be very important to clarify both the short term and long term challenges and possibilities and also to look into the different policy measures suitable for ensuring the deployment.

The Chinese RE industry is wisely considered as one of the strategic emerging industries in China, and the Chinese solar PV Industry has certainly shown its ability to move quickly. But today the PV industry is in trouble. Production capacity is much higher than the current market demand, and it is difficult to quickly adjust this capacity downwards again. This partly explains the urgent need to stimulate the national market, but even the 10 GW goal might not solve the problem for the PV-industry. At the same time the technology breakthrough of new systems might be just around the corner, which again will challenge the Chinese manufactures. Will they be able to become front runners in this development or will they be stuck with the old technology solutions? I think this roadmap will be particular important for the solar industry as a basis for understanding both the national and international market and as a tool for understanding the emerging technologies which are necessary to implement in the future in order to survive and grow. I hope the team will use the working process to frequent consult with the industry, both to get inspiration and input but also to provide and discuss the result with this very important stakeholder group.

Should the roadmap be consistent with the current national energy plans? Not necessarily! Road maps should point to possibilities and expand the knowledge of these technologies. Roadmaps are in my opinion front runners for energy plans. Then of course the energy plans might have other considerations which will deviate from the roadmaps and that is actually no problem to have these different perspectives. So I encourage you to be bold regarding potentials and possibilities including ambitious long time goals but also to be realistic regarding the challenges and needs for implementing measures.

I am very happy to see that the working team include the best Chinese solar experts. This is very promising for the quality and success of the roadmap. I am of course also happy that it has been possible to include the Danish experts in the work contributing with experiences from Europe and from the important work in the IEA technology groups.

I wish you good luck with this important and exciting study. I am looking forward to follow the work and to see the first roadmap by the end of this year”.

 

The biggest obstacle to wind power development in China

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Curtailed wind power gives record loss for wind power producers in 2012. Recent estimates reveals that 20 TWh or between 20 and 30 percent of the total Chinese wind power production was curtailed in 2012, according to Qin Haiyan, secretary general of the Chinese Wind Energy Association as cited in Windpower Monthly. The curtailed electricity has the value of CNY 10 billion, and the producers have not been compensated for the loss. The curtailed electricity could lower the local and global pollution and for the society as a whole it would be cheaper to curtail the coal fired power plants instead of the wind farms. To put it simple: Curtailed wind power = more pollution + more costs + less incentives for new wind power.Jilin_wind_farm

The large amount of curtailed wind power is in my opinion the biggest obstacle for the Chinese government’s ambitious plan for wind power deployment. It is difficult for wind power developers to justify investments in new wind farms if you know that up to 40% of the annual production will not be sold. And if you are forced to establish new wind farms due to quota system or similar, you will tend to invest in cheap wind turbines with low efficiency, since high efficiency will be punished by even more curtailment.

So it is absolutely necessary to improve the situation for the wind farms quickly in order to get the benefits from wind power and encourage more investments.

Then what should be done? Well in principle the solution is straight forward: The electricity system must be more flexible and regard wind power (and solar PV) as an integrated part of the system – not as an add-on to the thermal system. Today the thermal power plants have no or few  economic incentives for being flexible, since the income is almost solely depending on sale of electricity. Also the dispatch centres should have better possibilities and incentives for a more dynamic use of interconnectors to neighboring areas. When the economic incentives are in place the technical obstacles would soon disappear – all experiences from e.g. Europe show this.

In practice it might not be as simple. It is alway difficult to change the division of benefits and costs between different stakeholders and the thermal power plants would potential have difficulties in recovering investments if they have to cut down on the number of hour they can produce during the year. But if the Chinese government want to fulfill it’s ambitions on renewable energy, a solution must be found quickly. My guess is, that this issue is on top of the agenda for the NEA this year.

PS: The picture is from a large wind farm in the North West of Jilin, one of the provinces with most curtailment.