Energizing the Future
China takes the lead in global energy structure transformation
By Zhang Shasha  ·  2019-09-23  ·   Source: NO. 39 SEPTEMBER 26, 2019

Wind turbines operated by Datang Chifeng Saihanba Wind Power Co. Ltd. in north China's Hebei Province on August 5 (COUTESY PHOTO)

Birds can't find a tree to perch on, while blowing sands dust away the sun. This is what Saihanba, a highland in north China's Hebei Province, used to look like. But thanks to decades of greening, the previously desolate land has been replaced with dense forests and vast grasslands. Moreover, it is home to the world's largest wind farm in operation—Datang Chifeng Saihanba Wind Power Co. Ltd.

"Back then, the technicians had to use two electric blankets when they slept, one on the bed and the other to cover themselves," Li Shuo, Deputy Director of the Centralized Control Center, China Datang Corp. Renewable Power Co. Ltd., said while showing the dormitories of the plant's earliest workers from 2004, when it began.

The harsh weather conditions posed a great problem as a strong wind blew more than 360 days a year and the temperatures could drop to minus 42 degrees Celsius. But the biggest challenge was the lack of experience. The first technicians at the Saihanba plant were from thermal power plants and power grid companies and their experience could not be transferred to wind farm construction, Li told Beijing Review. "Wind power was at its initial stage at the beginning of the 2000s, and nationwide, there was no precedent available for learning," he said.

After 15 years of development and innovation, the Saihanba plant has a total installed capacity of 1.52 GW and 1,136 wind turbines of 14 types, both imported and domestically manufactured. The import substitution rate has reached 58.9 percent, according to Li.

From zero to the biggest, the Saihanba plant's growth mirrors China's wind power development. According to China Energy News, in 2000, China's installed capacity of wind turbines was just 0.3 GW, while in 2012, it overtook the U.S. as the world's largest wind power country with 60 GW. By June, it had reached 193 GW, and the country's newly installed capacity of onshore wind turbines ranked No.1 worldwide for the ninth consecutive year in 2018.

Powering ahead

"Before 2007, all wind turbines had to be imported," Li said. "Denmark's Vestas, the manufacturer, offered up to two years of maintenance services after the turbines went into operation. We went to its factory and base to learn and grasp the maintenance skills."

But China caught up swiftly. "Foreign wind turbine manufacturers began their businesses over a decade earlier than their Chinese counterparts. Before 2010, no Chinese enterprise was included in the top 10 wind turbine manufacturers in the world, whereas today, Chinese firms rank at the front of the pack," Li said, adding that China leads in various aspects such as wind turbine wings design.

According to the China Wind Energy Association (CWEA), it took only 10 years for Chinese proprietary wind turbine brands to break the foreign monopoly. By 2017, international brands occupied only 4 percent of China's wind turbine market.

Once a small part of China's wind power development, offshore wind power has shown huge potential in recent years. In 2018, the newly installed capacity of offshore wind power increased by 42.2 percent, according to the CWEA.

A report by the Global Wind Energy Council in 2018 said China's wind power industry has not only undergone tremendous changes, but also transformed the international wind power landscape as a result.

A shiny name card

Coincidentally, China's solar and wind power sectors have been keeping up with each other over the past years. These days, while traveling around China, it is easy to see rows of photovoltaic (PV) panels in the sand, on the sea, on farmland and roofs, from which clean energy pours into households and industries.

According to a report by the China National Renewable Energy Center in October 2018, China's installed capacity of the PV industry in 2000 was just 0.02 GW, less than one 15th of Japan's, while in 2015, it surpassed Germany to become the world's largest PV market. By June, China's cumulative installed capacity of the PV industry hit 186 GW, an increase of 20 percent year on year, according to the National Energy Administration.

"In the past 10 years, China's PV industry has achieved great results," Wang Sicheng, a researcher with the Energy Research Institute under the National Development and Reform Commission, said.

Along with installed capacity, Wang said China's PV-associated products have occupied a large global market share, with polysilicon accounting for 57.8 percent, batteries and components for more than 70 percent, and wafers and ingots for as high as 90 percent.

Meanwhile, the cost of PV products and solar power generation has fallen by more than 90 percent in the past decade. Wang Guiqing, deputy head of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, said with their large advantage in scale of production, China's PV products were able to sharply drop costs and along with the improvement in quality, have created sound conditions for their worldwide use.

Wang Bohua, Vice President of the China Photovoltaic Industry Association, said at a symposium on July 25 that China's PV exports hit $10.61 billion in the first half of the year, a 31.7-percent increase year on year. Products have been exported to more than 200 countries, with destinations more diversified than before, expanding outside Asia.

However, risks also exist. Zhang Chunguang, chief operating officer of CanadianSolar, a global energy provider, said several years ago, more than 90 percent of China's PV products were exported. But the protectionist measures in both the U.S. and the EU have affected many Chinese enterprises and taught them a lesson about depending too heavily on overseas markets.

Currently, these companies are diminishing their dependence on singular overseas markets and diversifying the options in emerging markets. But they still face challenges such as inadequate information and cutthroat competition.

A photovoltaic project combines solar energy generation with farming in Lishui, east China's Zhejiang Province, on October 18, 2018 (XINHUA)

Embracing the future

Despite the twists and turns, China's new energy sector, represented by the wind and solar industries, has seen leapfrog growth, making it a highlight of energy consumption. It is also playing a leading role in transforming the global energy structure.

China has committed to lowering its carbon dioxide emissions per 10,000 yuan ($1,400) of GDP by 60 to 65 percent from 2005 levels by 2030, increasing the share of non-fossil energy sources in the energy mix to around 20 percent.

However, balancing the relationship between economic growth and environmental protection is a difficult challenge that the international community must face head on.

He Jiankun, head of Tsinghua University's Low-Carbon Economy Institute, said at the Guoshi forum in Beijing on August 22 that lowering the GDP carbon intensity by a large margin is the core strategy to coordinate development and carbon reduction, and the fundamental ways of doing so are energy conservation and a low-carbon energy system.

While China is devoted to reducing the ratio of energy use to GDP by accelerating industrial restructuring, the low-carbon reform is also underway as the country is sparing no efforts to promote the development of new energy, according to him.

As government subsidies gradually phase out and the feed-in tariff of new energy power equals traditional energy, it can grow by 8-10 percent in the future. Meanwhile, total energy demand will only increase by 2-3 percent, which will accelerate the adjustment of the energy structure, He said.

"Currently, China's feed-in tariff of new energy is 0.35-0.4 yuan (4.9-5.6 cents) per kWh on average, while that of coal power is 0.4 yuan per kWh," Zhou Hongjun, Deputy Dean of the Institute of New Energy, China University of Petroleum-Beijing, told Beijing Review. "At the current pace of growth, it will be 0.15 yuan (2.1 cents) per kWh by 2030. At that time, fossil energy consumption will see a profound change, with some coal power plants set to close," Zhou said.

According to a recent report released by REN21, a United Nations renewable energy consultant agency, China has been the largest investor of renewable energy for seven consecutive years and its investment in renewable energy accounted for almost one third of the world's total in 2018, at $91.2 billion.

"It is beneficiary to develop clean energy, since it is the final way to improve national energy security," Zou Ji, President of the Energy Foundation China, said at the forum. At present in China, nearly 70 percent of petroleum and 50 percent of natural gas are imported. If we rely on renewable energy, it is a boon for energy security, he added.

"Even in the face of downward economic pressure and global uncertainties, low-carbon reform cannot be stopped, nor can it be delayed," Zou said, "Its termination will be as harmful as ceasing modernization. If we don't seize the current opportunities, we will pay a higher cost in the future."

Copyedited by Rebeca Toledo

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