Research on the Potential of China’s CSP Market
State Grid Energy Research Institute November 2013
Abstract
As an important form of solar energy utilization, CSP (concentrated solar power) has developed rapidly in Europe, the US and other countries and regions in recent years, and is likely to embrace an upsurge in the near future thanks to continuous technological progress and the gradual formation of
CSP industry. Researches on CSP’s potential in China and on its technological and economic characteristics will help us gain a deep understanding of its prospects, scientifically assess its position in China’s future energy strategy, and promote its orderly development in China.
This report analyzes the conditions and policy environment for CSP development in China and points out the position and role of CSP in China’s power industry. Based on technological and economic analysis of typical projects, the report studies the competitiveness of CSP. Take northwestern China for example. Production simulation is used to study the position and prospects of
CSP in the power system of northwestern China. By drawing on foreign experience, this report proposes operational mode and incentive policies for CSP development in China, and provides suggestions to government authorities and the client on promoting CSP stations.
This report consists of 6 parts.
The first part is a summary of characteristics of different CSP technologies, including trough, tower and Fresnel. Based on CSP’s requirement for illumination, water, land and other resources, a quantitative estimation is made on the installed capacity and potential annual output of CSP in China, which concludes that regions with great CSP potential are mainly located in Inner Mongolia,
Xinjiang, Qinghai, Tibet and Gansu.
The second part analyzes the policy environment for CSP development in China. China has proposed to transform its future energy strategy, aiming to build a safe, stable, economic and clean
system of modern energy industries. CSP is able to play an important role in the optimization of
China’s energy mix. At present, policies on CSP development are unclear, therefore demonstration projects need to be built to verify the feasibility and reliability of CSP technologies, foster auxiliary industrial chains, overcome technical hurdles and reduce generation cost in order to get investors interested.
The third part analyzes CSP’s position and competitiveness in China’s power industry. Based on an analysis of the basic situation of China’s power system, it is pointed out that CSP is an important technical approach to enlarge the utilization of solar energy, a strong force to drive China’s traditional manufacturing industry and an important way to send solar power to the power grid on fair tariff. In future solar energy development, both PV and CSP should be given equal importance.
This part also contains a summary of research results by authoritative international organizations on factors that influence CSP cost and the cost trend, and estimates such economic indicator as CSP cost/kwh based on different configurations of typical CSP projects. A comparison is made between
PV and CSP in terms of developing conditions, industrial development, impacts of grid synchronization, technology and economy and policy environment, and the conclusion is that CSP has major advantages in operational flexibility, output adjustability and potential for future cost reduction. Its competitive advantages are more evident when the policy of time-of-use power tariff is implemented.
The fourth part analyzes the running positions and prospects of CSP in the power system, using northwestern China, where solar energy resources are abundant, as an example. Production simulation is used to analyze the operation of northwestern power system on a typical summer and winter day of 2020, and results show that the northwestern region is fully capable to accommodate all the electricity generated by CSP, although in summer, not all illumination can be utilized during
peak hours at noon. Thermal storage devices can be installed to reduce the waste of illumination and increase CSP utilization hours. In order to expand the scale of solar power generation, lessen the pressure on peak shaving and synchronization and ensure stable operation of the power system, it is absolutely necessary to build a certain amount of CSP stations in northwestern China.
The fifth part studies the operational mode and incentive policies for CSP in China. Drawing on experience and lessons learnt from such countries as Spain and the US, China should incentivize
CSP development in two directions. Regarding marketing mode, provide some profit guarantee by implementing a fixed feed-in tariff, so as to keep investors and stakeholders adequately confident and interested in investing in CSP station. Regarding operational mode, CSP stations should take feasible technical steps to improve their operational flexibility and economy, reduce cost and achieve better benefits.
The sixth part provides suggestions to the government on promoting CSP and to the client on entering the Chinese market. In the future, Chinese government authorities should work out specific measures in such areas as power tariff, finance and tax, R&D and service in order to promote the domestic CSP industry. The client should accelerate its deployments in CSP development and construction in China, strengthen communication and coordination with power grid and other stakeholders, choose capable partners in China to jointly carry out demonstration projects, and gradually introduce thermal storage technology through such projects. Meanwhile, based on its technological advantages, the client should take an active part in the formation of CSP technical specifications and industry standards, so as to establish its authority and solid image in this industry.
Keywords: solar energy, CSP, thermal storage, running positions, cost/kwh, incentive policies
Table of Content
1. Analysis of conditions for CSP development in China ...... 1
1.1 CSP technical characteristics and requirements for resources ...... 1
1.1.1 CSP types and their technical characteristics ...... 1
1.1.2 CSP requirements for resources ...... 4
1.2 Main regions in China that are suitable for CSP development and their resource potential 8
1.3 Technological basis and status quo of CSP development in China ...... 13
1.3.1 Technology R&D ...... 13
1.3.2 Projects ...... 17
2. Analysis of policy environment for CSP development in China ...... 23
2.1 Policy on energy industry and its basic trend in China ...... 23
2.2 Framework of policies, laws and plans for promoting renewable energies in China ...... 27
2.2.1 Laws ...... 27
2.2.2 Plans ...... 29
2.2.3 Auxiliary policies ...... 32
2.3 Analysis of future policies on CSP development in China ...... 38
3. Analysis of CSP's position and competitiveness in China's power industry ...... 41
3.1 Basic situation and characteristics of Chinese power system ...... 41
3.2 CSP's position and role in Chinese power system ...... 53
3.3 Economy of CSP and international experience in its application ...... 55
3.3.1 CSP cost and influencing factors ...... 55
3.2.2 Analysis of cost/kWh of typical projects both in China and abroad ...... 64
I
3.2.3 Changing trend of cost/kWh ...... 66
3.4 Analysis of economy and competitiveness of CSP projects ...... 72
3.4.1 Analysis of economy of CSP projects ...... 72
3.4.2 Analysis of CSP's competitiveness in Chinese power market ...... 86
4. Analysis of running positions and market prospects of CSP in western China ...... 95
4.1 Overview of power system in western China ...... 95
4.1.1 Power supply ...... 95
4.1.2 Power grid ...... 97
4.1.3 Power consumption...... 98
4.2 Analysis of power demand and development forecast in northwestern China in 2020 ...... 99
4.2.1 Power demand ...... 99
4.2.2 Analysis of load features ...... 101
4.2.3 Forecast of installed capacity ...... 104
4.2.4 Outlook for grid development ...... 105
4.3 Analysis of running positions and prospects of CSP in the power system of northwestern
China ...... 107
4.3.1 Main boundary conditions ...... 107
4.3.2 Running positions of CSP ...... 111
4.3.3 Prospects of CSP in northwestern China ...... 116
5. Study of operational mode and incentive policies for CSP stations in China ...... 120
5.1 Operational mode and incentive policies for CSP stations overseas ...... 120
5.1.1 Overview...... 120
5.1.2 Operational mode ...... 121
II
5.1.3 Incentive policies ...... 125
5.2 Analysis of CSP operation mode suitable for China...... 129
5.3 Incentive policies to promote CSP development in China ...... 132
6. Policy suggestions ...... 135
6.1 Suggestions to government on policies and measures to promote CSP ...... 135
6.2 Suggestions to Bright Source on steps to enter the Chinese market ...... 137
Attachment 1: Meeting minutes of CSP workshop ...... 140
Attachment 2: Report on solar energy survey in Qinghai ...... 146
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1. Analysis of conditions for CSP development in China
1.1 CSP technical characteristics and requirements for resources
1.1.1 CSP types and their technical characteristics
CSP is a power generation technology that first converts solar energy into thermal energy and then converts thermal energy into electric energy. The principle is as follows: the concentrator converts low-density solar energy into high-density energy, therefore converts solar energy into thermal energy through the heat transfer medium. Thermal energy is then concerted into electric energy through thermal cycle. CSP has a similar working principle to traditional power station using fossil fuels, but with a different source of fuel and a different way of obtaining thermal energy.
There are several types of solar thermal power generation, including CSP, temperature difference power generation, chimney power generation and thermoacoustic power generation. CSP is the dominant technology for commercial solar thermal power stations today, which includes two types - line focus system and spot focus system. Line focus system is used in trough CSP and Fresnel
CSP, while spot focus system is used in tower CSP and dish CSP.
(1) Trough CSP
Trough CSP is a system that uses a linear parabolic reflector to track sun movement and concentrate solar radiation onto the absorber tube located on the focal line of the parabola to heat up the heat transfer medium, and uses turbine generator to produce electricity. Trough CSP is the earliest CSP technology that realized commercial operation.
Trough CSP system has a simple structure and low cost, and can deploy multiple concentrating and absorbing devices in series and parallel to form a large-capacity CSP system. But trough CSP also has such disadvantage as small concentrating ratio, long heat transfer distance and difficulty in
1 Study of market potential of CSP in China raising the temperature of heat transfer medium, so its overall efficiency is quite low.
Figure 1-1 Schematic diagram of trough CSP
(2) Tower CSP
Tower CSP is a system that uses multiple sun-tracking heliostats to reflect solar radiation onto the central receiver on top of the tower to heat up the heat transfer medium, and uses turbine generator to produce electricity. Tower CSP station mainly consists of heliostat, solar tower, central receiver and thermal storage system.
Figure 1-2 Schematic diagram of tower CSP
2 Study of market potential of CSP in China
Tower CSP has a high overall efficiency thanks to its advantages in large concentrating radio, high working temperature, short heat transfer distance and small thermal loss. It is therefore suitable for large-scale and large-capacity commercial development and application. But tower CSP requires large upfront investment, every heliostat needs an independent 2D tracking device, its structure and control system are very complex, and maintenance cost is high.
(3) Dish CSP
Dish CSP is a system that uses a rotary parabolic reflector to concentrate solar radiation onto the mirror focus and uses the Stirling engine placed on the focal point to produce electricity. Key components of dish CSP-Stirling power generation system include dish concentrator, Stirling engine and drive system.
Dish CSP can be produced as a standard unit and has such advantages as long service life, flexible operation and high overall efficiency. It’s suitable for off-grid distributed power supply in remote areas as its generation cost doesn’t depend on the project scale. But the capacity of unit dish
CSP system is limited and its cost is high.
Figure 1-3 Schematic diagram of dish CSP
(4) Fresnel CSP
There are two types of Fresnel CSP - transmitting Fresnel and reflecting Fresnel. With transmitting Fresnel CSP system, solar radiation goes through the Fresnel lens and is concentrated on
3 Study of market potential of CSP in China the metal tube in the trough absorber, the medium in the metal tube is then heated up and drives the turbine generator to produce electricity. The reflecting Fresnel CSP system uses a row of concentrators located in a low position to track solar radiation and reflect it onto the linear absorber fixed above the concentrators. The medium in the absorber is then heated up to drive the turbine generator.
Figure 1-4 Schematic diagram of reflecting Fresnel CSP
Fresnel CSP has a simple structure and low cost, the absorber doesn’t require vacuum treatment, so it can be applied on a large scale with medium temperature. But Fresnel CSP has such disadvantages as long heat transfer distance and low overall efficiency.
1.1.2 CSP requirements for resources
(1) Requirements for solar energy
Unlike PV, CSP can only utilize direct solar radiation, so DNI (direct normal irradiance) is usually used to measure the solar energy resources available for a CSP station. According to construction experience in foreign CSP stations, DNI should be higher than 1900kwh/m2/year (about
5kwh/m2/day) for a region to be suitable for CSP station. If DNI is lower than that, CSP is less
4 Study of market potential of CSP in China competitive than PV.
(2) Requirements for land
Large-scale CSP station requires a large area of land, and it also has strict requirements for ground gradient, which shouldn’t be larger than 1% for trough CSP station, although this requirement is relatively less strict for tower CSP station. Regions that are suitable for building CSP station include grassland without trees, bushes, Gobi desert, desertification land, depleted saline and alkaline land and desert. Due to differences in resource conditions, solar field design and storage configuration, the land needed for unit electricity output of CSP station varies greatly. Table 1-1 lists the land use for typical CSP stations.
Table 1-1 CSP requirement for land Installe Annual Land Output/land d output use area No. Name Type capacity (10MW (10,000 (kWh/m2/ye (10MW) h) m2) ar) Supcon Delingha CSP Tower 1 1 1800 40 45.0 station Phase I No storage Tower Gemasolar CSP station, 2 15-hour 1.99 11000 195 56.4 Spain storage Tower Planta Solar 20 CSP 3 1-hour 2 4800 80 60.0 station, Spain storage Orellana CSP station, Trough 4 5 11800 186 63.4 Spain No storage Trough Andasol-1CSP station, 5 7.5-hour 5 15800 200 79.0 Spain storage Trough 6 Solana CSP station*, US 6-hour 28 94400 1257 75.1 storage Trough 7 Solar One CSP station, US 0.5-hour 7.5 13400 162 82.8 storage
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Tower Ivanpah CSP station, US 39.2 107923 1417 76.2 No storage Source of data: collected and organized by project team Note: *means under construction.
(3) Requirements for water
Except for dish CSP that uses Stirling engine, other CSP types require water or other medium for cooling in the thermal cycle, just like traditional power plant with steam turbine. CSP station consumes a lot of water. According to the Technology Roadmap Concentrating Solar Power issued by IEA in 2010, water consumption at trough CSP station and linear Fresnel CSP station is about
3m3/MWh (equivalent to nuclear power station. Water consumption at coal-fired power station is
2m3/MWh and is 0.8m3/MWh at combined cycle station). Water consumption at tower CSP station is usually 2m3/MWh, subject to specific technology.
Regions abundant in CSP resources mostly lack in water resources. To reduce water consumption, air cooling is an option, which, however, would exert adverse effects on CSP efficiency. Take trough CSP for example. Air cooling would reduce 7% of its annual electricity output and increase 10% of its cost per unit power generation. In order to reduce water consumption while limiting the cost increase, a mixed cooling approach combining air cooling with water cooling can be adopted, whereby air cooling is used in winter when temperature is low and mixed cooling is used in summer. For a trough CSP station, this approach can reduce water consumption by 50% while the annual output is only decreased by 1%.
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Figure 1-6 Comparison of water consumption among different CSP types Source of data: IEA, Technology Roadmap Concentrating Solar Power, 2010 Table 1-2 Comparison of different cooling methods for CSP Water consumption Decrease rate of Increase rate of Type Cooling (M3/MWh) electricity output generating cost Water cooling 3 - - Mixed Trough 0.4-1.7 1%-4% 8% cooling Air cooling 0.3 4.5%-5% 2%-9% Water cooling 1.9-2.8 - - Mixed Tower 0.3-1.0 1%-3% 5% cooling Air cooling 0.3 1.3% - Dish - - - - Fresnel Water cooling 3 - - Source of data: DOE, Concentrating Solar Power Commercial Application Study: Reducing Water Consumption of Concentrating Solar Power Electricity Generation, 2008
The US DOE made a detailed comparison of CSP’s water consumption in 2008, and the results are shown in Table 1-1. Take trough CSP station as an example. Mixed cooling can reduce water consumption by 87% at most, but annual output is only decreased by 4% and generating cost increased by 8%.
(4) Thermal storage and afterburning
Due to different generating principle, CSP is superior to PV in terms of generating characteristics. By adding storage and afterburning, CSP is very adaptable, which is friendly to the
7 Study of market potential of CSP in China grid and improves the grid’s capability to accommodate intermittent electricity.
For trough, tower and Fresnel CSP system, adding a storage unit can considerably smoothen the output and diminish hour-to-hour output fluctuations. For instance, some trough CSP stations in
Spain use molten salt as storage medium, and the stored heat can ensure continuous power generation at the rating power of 50MW for more than 7 hours. Through afterburning or combination with conventional thermal power plant, CSP station is able to produce electricity at night or during successive cloudy days, and even run on base load steadily.
(5) Unit cost and generating cost
At this stage, unit cost for CSP station is still higher than other new energy power generation modes such as wind power and PV. The cost of CSP station varies greatly due to the difference in station scale, storage scale, solar illumination, land and labor cost. Generally speaking, dish CSP station is most costly, almost twice as high as tower station, whereas the cost of trough CSP station is slightly lower than tower station and higher than Fresnel station. Currently the unit investment for trough CSP station is USD4200-8400/KW, and its unit generating cost is USD0.2-0.295/KWh.
1.2 Main regions in China that are suitable for CSP development and their resource potential
China has abundant solar energy resources. It is estimated that the annual solar energy received by land surface of China equates to 4.9 trillion ton standard coal, which is about the total electricity output by over 10,000 Three Gorges. 70% of China’s solar energy resources is mainly distributed in western and northern China, including Tibet, Qinghai, central south of Xinjiang, central west of Inner Mongolia, Gansu, Ningxia, west Sichuan, Shanxi and north Shaanxi (see Figure
1-7).
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Figure 1-7 Distribution of solar energy resources in China Source of data: CMA Wind and Solar Energy Resources Center
China has a large area of desertification land suitable for building CSP stations. As of 2010,
China had 2.64 million square kilometers desertification land, nearly 1/3 of the total territory, and more than 2.5 million square kilometers of that is in arid region, which is mainly distributed in western China where solar energy resources are abundant. There is 1.11 million square kilometers of desertification land in the 1.66 million square kilometers of Xinjiang. Those regions offer good land and solar resource conditions for building large-scale CSP stations.
There aren’t many research results on the potential and siting for CSP in China. A rough quantitative estimate of China’s CSP potential is provided below, using calculating methods stated in the China Concentrated Solar Power Feasibility and Policy Study Report compiled by the Energy
Foundation in 2009.
(1) Basic assumptions
DNI data (40km×40km resolution ratio, taking into account factors such as cloud blocking, vapor, aerosol and trace gases) obtained from NREL’s (National Renewable Energy Laboratory)
Climatological Solar Radiation Model are adopted. Factors that affect station option, such as water supply, population density and distance to traffic artery and grid, are not considered.
9 Study of market potential of CSP in China
Simplified treatment of DNI
For simplicity’s sake, DNI smaller than 5kWh/m2/day is ignored and DNI in the range of
5-6kWh/m2/day is all unified and simplified as 5.5kWh/m2/day. Likewise, 6-7kWh/m2/day is simplified as 6.5kWh/m2/day, 7-8kWh/m2/day as 7.5kWh/m2/day, 8-9kWh/m2/day as
8.5kWh/m2/day, and all DNI larger than 9kWh/m2/day is unified as 9kWh/m2/day.
Simplified treatment of gradient
If gradient in a region is less than 3%, that region is deemed 100% suitable for CSP station, but if the gradient is more than 3%, the region is deemed 100% unusable.
Land usability caused by natural and economic reasons
City, water body, mine area (working mines and reserve mines) and protected area (e.g. natural reserve) are not considered as their land usability is zero. Desert and desertification land are considered 100% usable, grassland, pasturing area and agricultural area 50% usable, and forest and shrub area 10% usable. After taking all the above usability discount into account, what’s left is the land area that can be used for CSP station based on an overall consideration of gradient as well as natural and economic factors.
Efficiency of CSP station
In the calculation, converting efficiency of CSP station is assumed as 15%, which is the typical efficiency for trough CSP station (without storage) at this stage. Based on the above analysis and assumptions, the ratio between the area usable for developing CSP station and the effective area actually used for collecting solar radiation (namely the ratio between the total area of reflectors installed in the CSP station and the total area of the station) is assumed as 25%. Besides, the ratio between CSP station’s installed capacity and land area is estimated as 30MW/km2.
Estimate of annual electricity output and potential of CSP station
10 Study of market potential of CSP in China
Based on the above assumptions and according to the effective land area usable for CSP and
DNI, China’s CSP potential can be estimated by multiplying the effective land area with DNI and
converting efficiency, namely:
Annual electricity output = effective land area for CSP in a region ×DNI ×ratio of reflector
area against station’s total area ×generating efficiency of the station
Generation potential = effective land area for CSP in a region ×ratio of station’s installed
capacity against land area
(2) Estimate results
Based on the above assumptions and calculating methods, it is estimated that China’s CSP
installed capacity is about 16000GW, which is close to that of the US, and the potential CSP output
is 42000TWh/year. The CSP potential in different regions of China is shown in Table 1-3. Table 1-3 Potential of CSP development in different regions of China DNI (kWh/m2/day) 5-6 6-7 >7 Annual Annual Annual Province Installed Installed Installed electricity electricity electricity capacity capacity capacity output output output (100GW) (100GW) (100GW) (1000 TWh) (1000 TWh) (1000 TWh) Inner 60 15 0.59 0.17 0 0 Mongolia Xinjiang 43 11 4 1.1 3.4 1.2 Qinghai 20 4.9 7.2 2.1 0.31 0.1 Tibet 3.2 0.77 3 0.86 11 3.9 Gansu 4.4 1.1 0.15 0.042 0 0 Sichuan 0.56 0.14 0 0 0 0 Hebei 0.26 0.064 0 0 0 0 Shanxi 0.18 0.044 0 0 0 0 Shaanxi 0.09 0.021 0 0 0 0 Heilongjiang 0.07 0.017 0 0 0 0 Jilin 0.04 0.01 0 0 0 0 Total 131.8 33.1 14.9 4.3 14.7 5.2
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Figure 1-8 Regions with potential for CSP development in China
12 Study of market potential of CSP in China
In general, China has abundant solar energy resources, which are mainly concentrated in sparsely-populated and remotely located provinces, such as Inner Mongolia, Xinjiang, Qinghai,
Tibet and Gansu, with Tibet featuring high-quality CSP resources. Of all regions nationwide with a
DNI larger than 7kWh/m2/day, the potential for CSP development is 1470GW, 1100GW of which is in Tibet, accounting for nearly 3/4 of the national total.
1.3 Technological basis and status quo of CSP development in China
1.3.1 Technology R&D
An industrial chain ranging from the manufacturing of basic materials to main equipment for
CSP has been formed in China, and unit technology has evolved to system integration. China started basic researches on CSP in 1970s. Since the 8th Five-year Plan, the Ministry of Science and
Technology (MOST) has provided continuous support for technical R&D on key components.
During the 10th and 11th Five-year Plan, based on the support of such national projects as MOST’s
863 and 973 program, major project of National Natural Science Foundation and CAS’s “100 people program” and also thanks to the participation of a group of enterprises, the CAS (Chinese Academy of Sciences) Institute of Electrical Engineering, CAS Changchun Institute of Optics, Fine Mechanics and Physics (CIOMP), CAS Institute of Engineering Thermophysics, Himin Solar Co., Ltd. and
Hohai University carried out extensive researches on CSP, including the design and manufacturing of concentrator, solar field design and system control, manufacturing of key materials, heat exchange of molten salt and storage system. They achieved a range of research results and practical technologies, such as wind-resistant high-precision heliostat, high-temperature tower absorber, high-temperature heat storage, station control, power generation system design and integration for tower CSP, manufacturing process of vacuum tube for trough CSP and trough collector integration.
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In recent years, China’s CSP technology has been constantly improved either through independent
R&D or manufacturing for foreign enterprises. At present, a group of domestic manufacturers are providing large quantities of products for famous foreign CSP stations, including Qingdao Chemical
Plant (molten salt), Lanzhou Glass Plant (mirror glass), Shandong Jinjing (mirror glass), Baotou
Hydraulic Machinery Co. Ltd. (reflector support for trough CSP) and Xi’an Aero-engine Group Ltd.
(components of Stirling engine).
CSP is closely related with traditional power generation, which in some way lowers the risk of technological development. Once key technologies and manufacturing processes for the collecting and absorbing section of CSP are mastered, the advantages of “made in China” can be brought into full play either for the procurement of conventional raw materials such as glass and steel, or for civil construction and machinery, and even for commercially available materials or components including turbine, heat exchange system, and high-temperature heat-absorbing and storage materials. However, the conspicuous problem now is that except for the 1MW demonstration station in Yanqing, Beijing, no other large-scale commercial station has been built. As a result, core manufacturing technologies that are either proven by R&D or close to being proven cannot be verified and improved through practice. (1) Concentrator and absorber tube of trough CSP
There are different types of trough concentrators in China. Broad Air Conditioning Company,
CAS Institute of Electrical Engineering and Hohai University have developed one each. The trough concentrator developed jointly by CAS Institute of Electrical Engineering, Himin Solar Co., Ltd. and
CAS Institute of Engineering Thermophysics is 12 meters long and 2.5 meters wide in the concentrating opening. Adopting the compound honeycomb technology, the reflector has an ultra-light reflecting surface, which solves the difficulty in making curved mirror with plain glass.
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Having discussed with American scientists, the three parties adopted hydraulic drive in order to adapt to desert conditions in the future.
As of today, a variety of solar vacuum tubes for low-temperature (<120℃) application in trough system have been developed, including double-ended metal/glass tube and all-glass helical tube, which are developed by Beijing Eurocon Solar Energy Tech Co., Ltd., Beijing Sunda Solar Energy
Co., Ltd. and TP Solar Energy Group respectively. Medium and high-temperature collectors tube is the core technology for trough CSP, but its development is difficult. Many domestic companies and universities, such as Himin Solar Co., Ltd., Hohai University, Tsinghua University and Beihang
University, are actively carrying out R&D in this area and have made progress. The high-temperature Sunda collector tube developed by Beijing Sunda Solar Energy Co., Ltd. has a working temperature up to 350℃, and a 2-meter sample has been developed. Dezhou Huayuan New
Energy Co., Ltd. also developed 2-meter and 4-meter trough collector tube with the temperature range of 300-500℃. (2) Tower concentrator/heliostat
CAS Institute of Electrical Engineering and Himin Solar Co., Ltd. jointly developed multiple tower concentrator/heliostats, including 100m2 heliostats that are currently used in their 1MW demonstration project. Moreover, the heliostat jointly developed by Hohai University and Nanjing
Chunhui Science and Technology Industrial Co., Ltd. is applied in the 70KW demonstration tower
CSP project in Jiangning, Nanjing, and CIOMP also developed a polar axis toroidal heliostat. These tower concentrator/heliostats are mostly applied in experimental and demonstration projects, so their reliability and feasibility are to be verified by commercial projects. (3) Solar concentrator for dish CSP
There are many different types of solar concentrators for dish CSP in China now, including 4 sets developed under the leadership of CAS Institute of Electrical Engineering, 3 sets developed with
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Himin Solar’s participation and 1 set developed with the participation of Xinjiang New Energy
Group. With the temperature of focal point reaching almost 1600℃, these concentrators are believed to have reached world-leading level in terms of technical and economic indicators. So far, research institutes have grasped 3D tracking technology to track the sun and high-precision driving technology to control equipment posture. The concentration system has a precision of ±0.2 degree; concentrator experiments tried three different driving modes - worm gear, track chain drive and double worm gear with even force; the manufacturing technology of rotary parabolic reflector with high reflectivity (≥94%); low-energy-consuming drive technology, which makes total power consumption of the equipment itself less than 4W when it’s in operation; high-density hot fluid transfer technology, which enables the absorber to work normally in the ultra-high fluid density of
0.65×106W/m2 while keeping the thermal efficiency no less than 91%. (4) Molten salt thermal storage system
Sun Yat-sen University, Beijing University of Technology, South China University of
Technology and Dongguan University of Technology have made achievements in the configuration and physical property measurement of mixed molten high-temperature nitrate, carbonate and chlorate in a multicomponent system, as well as in the experiments and simulation of the heat exchange performance of molten salt. Furthermore, Changzhou Boiler and Pressure Vessel
Inspection Institute has worked for many years on nitrate for high-temperature (about 550℃) heat transfer and storage as well as its container and materials, and has drawn a primary conclusion about the physical and chemical performance of salt and its compatibility with the container material.
(5) Material
CAS Institute of Metal Research and Institute of Electrical Engineering have jointly carried out the R&D on air absorbers for tower CSP station, and have developed silicon carbide foam absorber that can be used in 1400℃. The technology developed by CAS Institute of Metal Research that uses controllable infiltration process to manufacture high-performance and low-cost silicon carbide foam
16 Study of market potential of CSP in China and compact silicon carbide ceramic is under engineering R&D for 1000 ton/year capacity. Himin
Solar Co., Ltd. and German Fraunhofer-Institute of Solar Energy jointly developed the solar high-temperature selective coating (400℃) that can be used in air, and have completed the production line. (6) System integration and software control
Through the construction of demonstration projects, CAS Institute of Electrical Engineering has accumulated rich experience in system modeling, integration and design as well as solar field control.
CIOMP also conducted simulation modeling and optimized design for the solar field.
1.3.2 Projects
CSP is still in the early stage of commercial application in China. A group of demonstration projects for system integration have been completed successively, and several CSP stations are under construction at present. Supcon’s Delingha Tower CSP Phase I (10MW) in Qinghai that was synchronized for power generation in July 2013 is the first commercially operating CSP station in
China. As of the end of 2012, 6 experimental and demonstration CSP stations (systems) were completed in China, totaling an installed capacity of about 12.4MW, the government has approved another 3 CSP stations with a total installed capacity of about 192.5MW, and preliminary works have started on 14 CSP stations, totaling 660MW. CSP projects in China and their status as of the end of 2012 are listed in Table 1-4.
Table 1-4 CSP projects in China that are completed, approved or going through preliminary works
Installe d Techn No. Region Project name Owner Status capacit ology y (MW) 1MW CSP Completed 1 Beijing demonstration project 1 Tower CAS (experimenta in Yanqing by CAS l)
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Installe d Techn No. Region Project name Owner Status capacit ology y (MW) Institute of Electrical Engineering 180kW trough CSP Completed Xinjian Guodian Xinjiang 2 station in Turpan by 0.18 Trough (experimenta g Power Co., Ltd. Guodian l) China Datang Inner 50MW trough CSP Corporation Under 3 Mongol concessional bidding 50 Trough Renewable Power construction ia project Co., Ltd. Inner 50MW CSP project in Huadian New Energy Preliminary 4 Mongol Hailiutu, Urat Middle 50 Trough Development Co., works ia Banner Ltd. Inner Taiqing Photoelectric 10MW CSP project in Preliminary 5 Mongol 10 Trough Co., Ltd. of Sanhua Azuo Banner works ia Group Inner Dish CSP project in Huayuan Fengjisha Preliminary 6 Mongol Wushen Banner, 0.1 Trough Co., Ltd. works ia Ordos Hanas CSP Hanas New Energy Under 7 Ningxia experimental station 92.5 Trough Group construction in Yanchi 1MW CSP Completed Hainan E-Cube 8 Hainan demonstration project 1 Trough (demonstrati Energy Co., Ltd. in Sanya on) CSP demonstration Completed China Huaneng 9 Hainan project by Nanshan 1.5 Fresnel (demonstrati Corporation power plant on) 50MW CSP station in China Huadian Preliminary 10 Gansu 50 Trough Hongliuwa, Jinta Engineering Co., Ltd. works 200kW trough+linear Completed Lanzhou Dacheng 11 Gansu Fresnel CSP 0.2 Trough (experimenta Technology Co. Ltd. experimental system l) Delingha 50MW CSP Completed Qinghai Supcon 12 Qinghai Project Phase I 10 Tower (experimenta Solar Power Co., Ltd. (10MW) l) 100MW CSP project CPI Huanghe Preliminary 13 Qinghai 100 Tower in Golmud Hydropower works
18 Study of market potential of CSP in China
Installe d Techn No. Region Project name Owner Status capacit ology y (MW) Development Co., Ltd. CGN Solar Energy 50MW CSP project in Preliminary 14 Qinghai 50 Trough Development Co., Delingha works Ltd. Renewable Energy 50MW CSP project in Preliminary 15 Qinghai 50 TBD Asia (China) Co., Delingha works Ltd. Guodian Power 50MW CSP project in Qinghai New Energy Preliminary 16 Qinghai 50 TBD Golmud Development Co., works Ltd. Tibet Branch of Preliminary 17 Tibet 50MW CSP project 50 TBD China Guodian works Group CPI Huanghe Tower CSP Hydropower Preliminary 18 Tibet demonstration project 50 Tower Development Co., works in Shigatse Ltd. CGN Solar Energy Preliminary 19 Tibet 50MW CSP project 50 TBD Development Co., works Ltd. Preliminary 20 Tibet 50MW CSP project 50 TBD China Wind Power works China Technology Preliminary 21 Tibet 50MW CSP project 50 TBD Solar Power works Holdings Ltd. Huaneng Tibet Preliminary 22 Tibet CSP project 50 TBD Power Co., Ltd. works Huazhong University 1MW trough CSP of Science and Under 23 Hubei pilot & demonstration 1 Trough Technology construction project in Liangzihu China Chang Jiang Energy Corp.
Note: as of the end of 2012.
Source of data: National Energy Administration, 2012 Statistical Report on Solar Power
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Development in China.
(1) Beijing Yanqing tower CSP demonstration project by CAS Institute of Electrical Engineering
Located in Badaling, Yanqing, Beijing, this project is a solar power demonstration project in the
National 863 Program of the 11th Five-year Plan and also the first CSP demonstration project in
China. With an installed capacity of 1.5MW and a total investment of RMB120 million, it is jointly designed by over 10 research institutes, public institutions and enterprises in China presented by
CAS Institute of Electrical Engineering. The project covers an area of about 80 Mu and consists of
100 sets of heliostats. It was started in 2006 and successfully put into operation in August 2012.
The successful operation of this project is of great significance for China’s CSP industrialization. On the one hand, a lot of experience has been gained during project design, which will provide lessons on future CSP development in China. On the other hand, manufacturers of CSP equipment can send their products to this demonstration project for testing in a real CSP station environment, which will help them more conveniently discover product defects and improve product performance. This project is likely to become a professional testing and certification platform like
PSA in Spain. (2) Qinghai Delingha tower CSP project by Supcon
Located in Delingha, Qinghai province, the Delingha 50MW CSP project is developed, invested and constructed by Supcon Solar Energy Co., Ltd. using the company’s own tower CSP technology.
The project covers an area of 3.3km2 and plans to build 6 solar fields and absorber towers with thermal power of 40MW, one molten salt heat storage system, one steam generator system, one turbine generator system and auxiliary power generation system. Altogether 217740 heliostats are deployed on the solar fields, each field having 36240 ones, and each heliostat is 2m2. The absorber tower is 80 meters tall and built with reinforced concrete. With a planned installed capacity of
20 Study of market potential of CSP in China
50MW and an expected total investment of RMB960 million, the project is planned to be completed at the end of 2014, after which it is expected to produce 130GWh electricity every year.
Phase I of Supcon’s Delingha project is 10MW with an investment of RMB210 million. Phase I produced steam in August 2012 and was completed in January 2013, ready to produce electricity. In
July 2013, Phase I was successfully synchronized and became the first commercially operating CSP station in China. (3) Delingha CSP project by CGN
With an investment of RMB2.5 billion, this is the first large-scale trough CSP demonstration project in China. It covers an area of 246 hectare, has a planned installed capacity of 50MW and will produce about 200GWh electricity annually after put into operation.
Based on the Qinghai Delingha 50MW CSP Project, CGN Group will build a national R&D center for CSP technology. The construction plan and scheme of the R&D center passed NEA’s
(National Energy Administration) expert review in October 2011, and the center received about
RMB74 million state fund in April 2012 to support capacity building. Integrating the roles of industry, college, research and user, the R&D center shoulders four tasks - research on major technologies, development of major equipment, construction of major demonstration projects and development of technology innovation platform in the CSP field. Based on this R&D center, CGN
Solar Energy Development Co., Ltd. will establish a CSP industrial alliance and a talent cultivation platform, so as to promote researches on the localization of key CSP equipment and lower the price of CSP power. (4) Sanya CSP-gas combined cycle power project by Huaneng
Located in Sanya, Hainan, this project has 400KW CSP capacity and 132MW gas-fired capacity.
Covering an area of 10000m2, this project adopts Fresnel CSP technology with 1.5MW thermal power. It consists of 9 60-meter Fresnel collector modules with collecting efficiency of 55% and
21 Study of market potential of CSP in China photo-electricity conversion efficiency of 18%. The collectors produce 1.8-ton overheated steam
(400-450℃, 3.5MPa) per hour, which is fed into the gas turbine of Huaneng Nanshan Power Plant’s gas unit to produce electricity.
Designed by Huaneng Clean Energy Research Institute, this project has more than 30 patents and all equipment is produced locally. Collectors are produced by General Research Institute for
Nonferrous Metals and Huiyin Company and reflectors by Damin Glass. The project started construction in April 2012 and was completed at the end of October.
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2. Analysis of policy environment for CSP development in China
2.1 Policy on energy industry and its basic trend in China
Ever since the reform and opening up in late 1970s, Chinese energy industry has made remarkable progress. At present, China is the world’s largest energy producer and energy development provides a strong guarantee for the long-term, steady and rapid economic and social development. Meanwhile, China’s energy development also faces a series of challenges, such as the tightening resource restriction, low utilization efficiency, growing environmental pressure, severe energy security situation and unsmooth system and institution.
To cope with these challenges for energy development, Chinese government will energetically reform the way that energy is produced and utilized, keep improving the policy system, and strive to make sure that policies on energy industry will be formulated under the guiding thought that energy, economy, society and ecology should all develop in a comprehensive, coordinated and sustainable manner. It will specify that energy industry should follow the path that features high technology, low resource consumption, little environmental pollution, good economic benefit and security, so as to realize economical, clean and safe development on all fronts.
(1) Basic contents of China’s energy policies
The basic contents of China’s energy policies are as follows1 - adhere to the guideline of
“priority in conservation, base in China, diversified development, environmental protection, science and technology innovation, deepened reform, international cooperation and improvement of people’s livelihood”, promote reform of energy production and utilization, build a
1State Council Information Office, White Paper on China Energy Policy (2012), October 2012.
23 Study of market potential of CSP in China modern energy industry and system characterized by security, stability, economy and cleanliness, and strive to support sustainable economic and social development with sustainable energy development.
Priority in conservation: implement double control over total energy consumption and intensity, work hard to build an energy-saving production and consumption system, promote the transformation of economic growth mode and living and spending mode, and accelerate the building of an energy-saving country and a conservation-oriented society.
Base in China: base on the resource advantages and development foundation of China, focus on strengthening the capability of energy supply, improve the energy reserve emergency system, reasonably control reliance on external resources and raise the guarantee level of energy security.
Diversified development: try hard to increase the proportion of clean and low-carbon fossil energy sources and non-fossil energy sources, energetically promote efficient and clean utilization of coal, actively and scientifically implement energy alternatives, and speed up the optimization of energy production and consumption structure.
Environmental protection: establish the concept of green and low-carbon development, make holistic arrangements between energy and resource exploitation and utilization and eco-environment protection, exploit through protection and protect while exploitation is under way, actively foster energy development modes consistent with ecological civilization.
Science and technology innovation: intensify researches on basic sciences and cutting-edge technologies, strengthen the capability to innovate energy technologies, push independent innovation of major and key technologies as well as key equipment based on priority energy projects, and speed up building an innovation-oriented team.
Deepened reform: give fully play to market mechanism, make overall arrangements and deal
24 Study of market potential of CSP in China with both symptoms and root causes, accelerate reforms in key areas and links, and set up systems and institutions that are conducive to sustainable energy development.
International cooperation: keep in mind both domestic and international situation, strongly explore the scope, channel and approach for international energy cooperation, enhance the quality of
“go global” and “bring in” in energy sector, help establish a new international order for energy and attempt to realize win-win cooperation.
Improvement of people’s livelihood: make overall plans for energy development between urban and rural areas and among different regions, enhance the capability to provide energy infrastructure and basic public services, eradicate energy poverty as soon as possible and make great efforts to advance the efficiency of people’s energy consumption.
(2) Thoughts on China’s future energy development
A thought on the transformation of energy strategy was put forth in the Outline of the 12th
Five-Year Plan - adhere to priority in conservation, base in China, diversified development and environmental protection, strengthen mutually beneficial international cooperation, adjust and optimize energy structure, and build a modern energy industry and system characterized by security, stability, economy and cleanliness. Regarding future energy development, on the one hand, adhere to priority in conservation and control of total energy consumption; on the other hand, energetically advocate diversified and clean energy development, and optimize energy structure and development layout.
A reasonable control of total energy consumption is critical for China’s low-carbon development. Given the extensive economic growth mode, low-efficiency energy utilization and high-intensity carbon emission in China, the 12th Five-year Plan has made reasonably controlling total energy consumption an important measure to improve the incentive/constraint mechanism for
25 Study of market potential of CSP in China energy conservation and emission reduction. It is also stated in the 12th Five-year Plan for Energy
Development that by setting up the goal of total energy consumption control and implementing specific measures to achieve the goal, ensure rational energy use, encourage energy conservation and restrict excessive use. The goal of China’s total energy consumption control for 2015 is 4 billion ton standard coal, and the goal of total electricity consumption control is 6150TWh. When setting these goals, the level of economic and social development, location, resource characteristics and other factors of different regions will be considered comprehensively. The goals will be broken down to provinces (regions and cities), implemented by provincial governments, and incorporated in the overall assessment system that measures economic and social development. A periodic reporting system will also be put in place.
Optimizing energy structure and development layout is an important task in China’s future energy development. In the future, China will increase the proportion of high-quality fossil energy and clean energy in its energy consumption structure by expediting natural gas development, strongly promoting hydropower, steadily developing nuclear power, advancing wind power with high efficiency and finding more ways to utilize solar energy, so as to adjust and optimize the energy structure. By 2015, the proportion of non-fossil energy in primary energy consumption will climb to
11.4% from 8.6% in 2010, and the number will further rise to 15% in 2020. According to the principle of “faster in western China, steady in central China and optimization in eastern China”, further optimize the regional structure of China’s energy development, and strive to form an energy development layout that features complementarity and orderly connection among the east, the middle and the west. New supply of primary energies will mainly come from central and western
China in the future.
China’s energy policies and thoughts on future energy development show that energetically
26 Study of market potential of CSP in China developing renewable energies has become a crucial strategic step for China to push diversified and clean energy development, guarantee secure and steady energy supply based on domestic resources, protect eco-environment and enhance the capability for innovating energy-related sciences and technologies.
2.2 Framework of policies, laws and plans for promoting renewable energies in China
Energetically developing renewable energy has been elevated as a state strategy for China, and a framework of policies, laws and plans for promoting renewable energies has been established in China on several levels - laws and regulations, development plans and auxiliary policies.
2.2.1 Laws
In 2005, China enacted the Renewable Energy Law of the People’s Republic of China
(hereinafter referred to as Renewable Energy Law), which established the legal position of renewable energy exploitation and utilization. Renewable Energy Law lays down the basic legal system and policy framework for renewable energy development, and makes comprehensive regulations regarding the laws, policies and measures for large-scale exploitation and utilization of renewable energy. Renewable Energy Law establishes five systems - RETP (renewable energy target policy), enforced grid connection, tariff by category, expense sharing and special fund.
RETP: a target equates to market guarantee for a certain scale. The RETP sends a clear signal to the market and guides the direction of investment. RETP is the center of Renewable Energy Law and the concrete reflection of the “driven by government, guided by market” principle.
Enforced grid connection: enforced grid connection is a basic system to guarantee renewable energy development under the background of monopolized and franchised energy sales.
In the early stage of renewable energy development, this system can lower transaction cost, shorten
27 Study of market potential of CSP in China project cycle and enhance credit for project financing, thus boosting the rapid growth of renewable energy industry.
Tariff by category: the focus of commercial exploitation and utilization of renewable energy is to produce electricity. As the generating cost of renewable energy is obviously higher than conventional energy, the main impedance to its development is feed-in tariff, so the government must determine the tariff for renewable energy within a certain period of time. Therefore, a system of
“tariff by category” must be set up, which means to determine the tariff by category corresponding to the average cost of different renewable energy technologies.
Expense sharing: limited by technology and cost, most renewable energy has a higher developing cost than fossil energy such as coal-fired power, except for hydropower and nuclear power, which can compete with fossil energy. The uneven distribution of renewable energy resources necessitates measures to address the negative impacts imposed by renewable energy’s high developing cost on local regions. The center of expense sharing system is to implement the principle of combining citizen obligation with state responsibility, so that the extra expenses on renewable energy development can be shared, thus reflecting the fairness and equity of policies and laws.
Special fund: the purpose of special fund and expense sharing is to address the extra cost for renewable energy power generation, while other capital bottlenecks challenging the exploitation and utilization of renewable energy will have to be solved through specific channels. Therefore, it is proposed in the law to set up a special fund for renewable energy, which will be used as subsidy, allowance and other forms of capital support for renewable energy projects that cannot be covered by the expense sharing system.
In 2009, Renewable Energy Law was revised to adapt to new situations. First, the principle of overall plan and the central government’s role of making holistic arrangements are further
28 Study of market potential of CSP in China empathized. The law stresses holistic approach and coordination when planning exploitation and utilization of renewable energy, and explicitly asks local governments to formulate local implementation plans according to the national plan. Second, more stress is put on the purchase of all electricity from renewable energy and the “full-amount guaranteed purchase” system is proposed.
It is also stated that power projects that are eligible for full-amount guaranteed purchase must meet technical standards for grid connection. Third, national funds should be used in a centralized way.
While existing channels of fund remain unchanged, the special fund for renewable energy development set up in national budget and additional power charge for renewable energy will be used together. The fund administration will be adjusted in order for the central government to have centralized control and arrangement of the fund.
2.2.2 Plans
In terms of developing plans, China has issued a series of plans in recent years, including 12th
Five-year Plan for the Development of National Strategic and Emerging Industries, 12th Five-year
Plan for Renewable Energy Development, 12th Five-year Plan for Wind Power Development, Special
Plan for Wind Power Technology Development during the 12th Five-year Plan Period, 12th Five-year
Plan for Solar Power Development and Special Plan for Solar Power Technology Development during the 12th Five-year Plan Period. These plans expound the guiding thoughts, basic principles, objectives, key task, industrial layout, guarantee measures and implementation mechanism for renewable energy development during the 12th Five-year Period.
According to the plan, China will have 134GW new energy installed capacity by 2015, which will produce 293TWh electricity. This includes 100GW wind power with 190TWh electricity, 21GW solar power (20GW PV and 1GW CSP) with 25TWh electricity, and 13GW biomass with 78TWh electricity. Details are shown in Table 2-1.
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Table 2-1 China’s objective of new energy development during 12th Five-year Period
Type Installed capacity (10MW) Electricity output (100GWh) Wind power 10000 1900 Inc.: onshore 9500 1330 offshore 500 70 Solar power 2100 250 Inc.: PV 2000 CSP 100 Biomass 1300 780 Other new energy power 3 1.5 Total 13403 2931.5 Source of data: 12th Five-year Plan for Renewable Energy Development, July 2012.
Regarding the scale of solar power development, China will follow the principle of
“concentrated development + distributed utilization” and keep expanding the utilization scale of solar power, especially distributed PV system. In western China where solar resources and land are abundant, large-scale solar power stations will be built to increase local power supply, and there will be 10GW on-grid PV capacity by 2015. In mid-eastern China with rich solar resources and developed economy, roof-top distributed PV system will be prioritized, and there will be 10GW distributed PV capacity by 2015, so that concentrated and scattered development as well as distributed utilization will progress in parallel. On the premise of basically equivalent economy to
PV, 1GW CSP capacity will be completed in total. Keep bringing down the cost of solar power through market competition and scale economy, improve its economic competitiveness and strive to realize “grid parity” for solar power on the user side at an early date. Table 2-2 Scale and layout of China’s solar power development during the 12th Five-year Period2
Type 2010 2015 2020
2 Data in this table are from planning documents officially issued by the state. In June 2013, news came from the National Energy Administration that solar power installed capacity will be increased from 21GW to 35GW in the 12th Five-year Period, and PV capacity will almost reach 100GW by 2018.
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(10MW) Constructi (10MW) on scale Key regions (10MW) Solar power 45 1100 - 2300 station Build a group of on-grid PV stations in Qinghai, Gansu, Xinjiang, Inner Mongolia, Tibet, Ningxia, Shaanxi, Yunnan and some appropriate areas in northern Inc.: PV station 45 1000 and northeastern China. Based on 2000 the construction of large hydropower and wind power bases, build a group of PV stations aiming for wind-solar and hydro-solar complementarity. Carry out CSP demonstration projects in areas with good solar CSP station 0 100 300 illumination, wide usable land and ample water resources. Build on-grid PV system on rooftops in urban industrial parks, economic development zones and large public facilities in mid-eastern China. Build independent PV station or user-oriented PV system Distributed PV 41 1000 in remote areas and islands such as 2700 Tibet, Qinghai, Gansu, Shaanxi, Xinjiang, Yunnan and Sichuan, so as to provide electricity to regions that cannot be reached by grid. Expand PV application for city lighting and traffic lights. Total 86 2100 - 5000 Source of data: 12th Five-year Plan for Solar Power Development, July 2012.
Regarding solar power technology development, China sets to realize all-round breakthroughs in PV technology and promote large-scale application of solar power in the 12th Five-year Period. At that time, efficiency of crystalline silicon cells and silicon-based thin film cells will exceed 20% and
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10% respectively, CdTe and CIGS cells will be in commercial use with installing cost of
RMB12000-13000/kW, grid parity for on-grid PV system will be primarily achieved on user side and feed-in tariff for on-grid PV system on utility grid side will be lower than RMB0.8/kWh, and key components and their design and integration technology for multiple PV micro-grid systems will be basically grasped and demonstration carried out. As to CSP, foster the capability to design and provide complete equipment for 100MW-class CSP station, installing cost of CSP station without storage will be 16000/kW, that of CSP station with 8-hour storage will be 22000/kW, and feed-in tariff will be lower than RMB0.9/kWh. Make breakthroughs in applying medium-temperature thermal energy of solar power to industrial energy conservation and in long-term heat storage technology for heating in buildings, and carry out demonstrations. Put in place a primary national standard system and platform for solar power technology and product inspection, and establish a complete technology and service system in the industrial chain covering solar power technology
R&D, equipment manufacturing, system integration, engineering and construction and operation and maintenance.
2.2.3 Auxiliary policies
(1) Regulatory policies
Regulatory policies in the industry push the healthy and orderly new energy development. To that end, Chinese government has successfully issued a series of regulations and further broken down the auxiliary policies and measures for new energy power generation, which standardizes and promotes new energy exploitation and utilization. Details are shown in Table 2-3. Table 2-3 Regulations on new energy development issued in recent years in China
Year Name Main content
Regulations Regarding Specify responsibilities for project management, grid 2006 Renewable Energy Power companies and power generators
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Year Name Main content
Generation (NDRC Energy [2006]13) Carry out detailed survey and evaluation of wind energy resources, establish national standard and inspection and Opinions on the certification system for wind power equipment, support Implementation of strengthening the capability to develop wind power 2006 Promoting Wind Power technologies and the industrialization of wind power Industry (NDRC Energy equipment, conduct grid planning and technology [2006]2535) research suitable for wind power development, intensify management of wind farm construction. Methods of Energy-saving Prioritize dispatching electricity generated from Power Dispatching (Trial) 2007 renewable energies on the principle of energy (State Council Office conservation and economy. [2007]53) Methods of Supervision over Grid Companies’ Purchase of All Electricity Purchase all electricity from on-grid renewable energy 2007 Generated From projects covered by the grid. Renewable Energies (SERC Decree No.25) Notice by MOF, MOST and NEA on Implementing Strengthen financial capital management and standardize 2009 Golden Sun Demonstration project management Project (Caijian (2009)397) Notice by NEA on Provisional Methods of Wind Power Unit Specify responsibilities of various parties, content and 2010 Inspection and procedure of inspection Management for Grid Connection (NEA New Energy [2010]433) Notice by NEA on Strengthening Construction Lay down regulations on bidding for key equipment, Management of Golden selection of demonstration project, subsidy standard, Sun Demonstration Project 2010 capital application and grant, project oversight and and Demonstration Project management and grid connection of demonstration for the Application of project Photoelectric Buildings (Caijian [2010]662)
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Year Name Main content
Units responsible for wind farm operation and Notice by SERC on management should specify and implement Strengthening Wind Farm responsibilities for production safety. On-grid wind Safety Supervision and farms should comply with technical specifications for 2011 Management and grid access. Power dispatching units should strengthen Containing Extensive secondary oversight and management of wind farms. Off-grid Accident of Wind Construction units should intensify process management Units (Safety [2011]26) of construction quality. Power regulator should intensify oversight and management of wind farms. Notice by NEA on Provisional Methods of Make requirements for prediction and forecast, Power Prediction and 2011 prediction management, operation management, Forecast Management at oversight and assessment Wind Farms (NEA New Energy[2011]177) Strengthen management of wind farm construction and Notice by NEA on on-grid operation, improve the ability of on-grid wind Strengthening On-grid units for low voltage ride through and the ability to 2011 Operation Management of monitor that, intensify management of power system’s Wind Farms (NEA New safe operation, reinforce researches on design standards Energy[2011]182) and anti-accident measures for on-grid operation of wind units. Lay down regulations on management of wind farm Opinions on Strengthening design and equipment selection, of wind farm Work Safety for Wind 2012 construction safety, of grid connection safety, of wind Power (SERC Safety farm operation, of wind power dispatching, and of wind [2012]16) power safety. Source of data: collected and organized by project team.
(2) Power tariff policies
There are two forms of feed-in tariff for renewable energy project in China - government-determined tariff and government-guided tariff. According to the characteristics of different types of renewable energies and the situation in different regions, price authority of the
State Council determines the tariff on the principle of benefiting the exploitation and utilization of renewable energy, economy and rationality, and also makes timely adjustment as relevant
34 Study of market potential of CSP in China technologies progress. For renewable energy power projects that conduct a bidding process, its feed-in tariff should be determined by bidding, but no higher than the feed-in tariff of other projects of the same type.
Benchmark feed-in tariff has been established for wind power. The whole country is divided into four types of wind zones based on wind energy resources and construction conditions, for which the benchmark feed-in tariff is RMB0.51/kwh, 0.54/kwh, 0.58/kwh and 0.61/KWh respectively. All onshore wind power projects approved after August 1, 2009 implement the benchmark feed-in tariff of the wind zone they are located in. Feed-in tariff for offshore wind power projects will be determined separately subject to construction process.
Feed-in tariff for solar power has gone from government-determined tariff, tariff determined by franchise bidding to benchmark tariff. In the early stage, feed-in tariff of solar power was ratified by price authority on the principle of “reasonable cost + profit”. In 2009, franchise bidding system was introduced to solar power projects, and franchise bidding for PV and CSP projects was carried out in provinces including Gansu, Shanxi, Qinghai and Inner Mongolia. In July 2011, NDRC (National
Development and Reform Commission) formulated the uniform benchmark feed-in tariff for PV, which was RMB1/kwh or 1.15/kwh subject to the different time of approval and operation. In
August 2013, NDRC issued the Notice on Playing Price Leverage to Promote Healthy Development of PV Industry to adjust the feed-in tariff for PV. In reference to the practice with wind power, the whole country was divided into three types of solar zones, and benchmark feed-in tariff was formulated accordingly. Details are shown in Table 2-4.
Table 2-4 Benchmark feed-in tariff for PV across China Benchmark Resource zone feed-in tariff Regions in each resource zone (RMB/kWh)
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Ningxia, Haixi of Qinghai, Jiayuguan, Wuwei, Zhangye, Jiuquan, Dunhuang and Jinchang of Gansu, Type-I zone 0.90 Kumul, Tacheng, Altay and Karamay of Xinjiang, all of Inner Mongolia except Chifeng, Tongliao, Hinggan League and Hulun Buir. Beijing, Tianjin, Heilongjiang, Jilin, Liaoning, Sichuan, Yunnan, Chifeng, Tongliao, Hinggan League and Hulun Buir of Inner Mongolia, Chengde, Type-II zone 0.95 Zhangjiakou, Tangshan and Qinhuangdao of Hebei, Datong, Shuozhou and Xinzhou of Shanxi, Yulin and Yan’an of Shaanxi, Gansu, and all Xinjiang except those in Type-I zone.
Type-III zone 1.0 All other regions except Type-I and Type-II zones.
Source of data: NDRC, Notice on Playing Price Leverage to Promote Healthy Development of PV Industry, August 2013.
(3) Fiscal, tax and financial policies
According to regulations set in the Renewable Energy Law, China provides subsidies for renewable energy development. From 2006 to 2011, the part of renewable energy’s feed-in tariff
that’s higher than the tariff of coal-fired power units with de-SOx device as well as reasonable grid access fees were shared by the whole nation by charging users with additional power prices.
To address the deficiency of additional capital and capital shrinkage caused by taxation on the additional charge, it was provided in the revised Renewable Energy Law in 2009 that renewable energy development fund would be set up to subsidize it with special fund from the national budget and additional power charge. In November 2011 and March 2012, MOF (Ministry of Finance),
NDRC and NEA successively issued the Provisional Methods for the Collection, Use and
Management of Renewable Energy Development Fund and Provisional Methods for the
Management of Renewable Energy Subsidy from Additional Power Charge, indicating that China’s tariff subsidy for renewable energy entered the era of fund management. According to the division of duties, NEA is responsible for the review and verification of projects applying for subsidy from
36 Study of market potential of CSP in China additional power charge, NDRC is responsible for checking whether the project is in operation and its tariff approval and for issuing the subsidy scheme, and MOF is responsible for confirming the issuance of subsidy catalogue, budget management and capital appropriation.
Ever since the Provisional Methods for the Management of Renewable Energy Subsidy from
Additional Power Charge was issued, MOF has made two pre-appropriations of such subsidy, one in
December 2012 (RMB8597.52 million) and the other in March 2013 (RMB14811.39 million), totaling RMB23408.91 million, which is basically on a par with the RMB24 billion subsidy in 2012.
The subsidy includes RMB15165.35 million for wind power, RMB3156.02 million for solar power,
RMB5078.54 million for biomass and RMB9 million for others.
The size of China’s renewable energy fund will keep growing. Due to development beyond plan, tax and fee cost and levy shortage, China’s capital for renewable energy subsidy is always in deficit.
When fund management was adopted in 2012, tax and fee cost was solved, but capital shortage remained. According to China’s objective for renewable energy development by 2015 and given the
increased benchmark tariff for coal-fired units with de-SOx device, the current feed-in tariff of renewable energy requires subsidy capital of about RMB45 billion. Assume the levy standard of
RMB0.008/kwh and the total levy base of 490GWh, RMB39.2 billion additional power price can be charged in 2015, leaving a shortage of 13%. To fill that shortage, the size of renewable energy fund must be expanded. On June 14, 2013, the State Council convened an executive meeting to study measures to promote the healthy development of PV industry. Special emphasis was placed on expanding the size of renewable energy fund and ensuring the timely payment of subsidy capital. It is expected that state regulators will intensify the appropriation of special fund in the near future in order to make up the shortage in subsidy capital.
37 Study of market potential of CSP in China
2.3 Analysis of future policies on CSP development in China
(1) Government regulators’ thoughts on CSP development
The policy prospect for CSP development in China isn’t very clear yet. At present, government departments are focused on PV, which has a fairly mature auxiliary industrial chain, strong production capacity and relatively low cost, and they haven’t made up their mind to strongly push
CSP yet. According to the 12th Five-year Plan for solar power development, the objective for CSP is that “on the premise of basically equivalent economy to PV, 1GW CSP capacity will be completed in total.” Relevant statements show that government regulators still have concerns over CSP’s economic potential, developing cost and the capacity of auxiliary industries.
To set the domestic CSP market in motion, NEA organized the franchise bidding for CSP projects. In May 2011, bidding for Ordos 50MW trough CSP station was completed, which is the first CSP franchise project in China, and also the only one so far. China Datang Corporation
Renewable Power Co., Ltd. is responsible for its construction and operation, and the bidding feed-in tariff is RMB0.9399/kwh for a franchise operation period of 25 years. However, the project hasn’t started construction yet due to technological, equipment and economic reasons.
To better understand the potential of CSP development in China and implement the 12th
Five-year Plan for Renewable Energy and the 12th Five-year Plan for Solar Power Development,
NEA initiated in February 2013 a general survey of CSP sites and the research on implementation scheme for demonstration projects. The purpose of this is to draw a clear and comprehensive picture of site resources and possible objectives for CSP in China, and to gradually explore industrial policies and technology system suitable for CSP site conditions in China. By studying the planned sites in key provinces (regions), an objective has been raised - reserving CSP projects of about 1GW in total and proposing several demonstration projects with typical significance. This work is
38 Study of market potential of CSP in China expected to be completed in October 2013.
In general, government regulators’ thought on CSP development is “pilot project first, gradual promotion”. This means they will carry out researches and build demonstration projects, so as to grasp a clear idea of the developing potential, resource limitation, cost and auxiliary industries for developing CSP in China, and establish relevant standards for CSP construction. On that basis, they will take a comprehensive view of the developing cost, local manufacturing capacity, developing potential and other factors to determine the target scale and formulate corresponding policies.
(2) Feed-in tariff and subsidy policy
Regarding the determination of feed-in tariff for renewable energy, the common practice in
China is to first gain a clear understanding of the generating cost through demonstration or franchise bidding project, and then determine a benchmark feed-in tariff in consideration of resource conditions. For instance, franchise bidding was carried out for 15 wind power projects in 5 phases from 2003 to 2007, totaling 3400MW, and its benchmark tariff was issued in 2009. Franchise bidding was also carried out for 14 PV projects in 2 phases from 2009 to 2010, totaling 290MW, and its benchmark tariff was issued in 2011. For offshore wind power projects, franchise bidding was carried out for the first 4 projects in 2010, totaling 1000MW. The same approach is likely to be adopted for CSP’s feed-in tariff. As government regulators emphasized that CSP should be as economic as PV, it will be very difficult for CSP to have a feed-in tariff higher than RMB1.1/kWh considering the fast drop in PV generating cost.
As to subsidy for renewable energy, China will soon adjust the way and procedure of subsidy payment, in order to solve the problem that renewable energy enterprises cannot receive subsidy capital in time and in full.
According to current regulations, the procedure of settling the amount of electricity and power
39 Study of market potential of CSP in China charge with grid is basically the same for wind farms and solar power stations, which are entitled to renewable energy subsidy, as for other power plants. Grid company settles electricity fee monthly based on on-grid electricity of the last month, and the payment is based on benchmark feed-in tariff
for coal-fired units with de-SOx device in the local region, as the subsidy will be paid by the grid company to power generators after the subsidy is appropriated. Due to the long delay in subsidy appropriation and the capital shortage, renewable energy power generators are usually not subsidized in time and in full, which increases their capital pressure.
On July 4, 2013, the State Council issued the Several Opinions on Promoting the Healthy
Development of PV Industry, which stipulates that for PV stations, grid companies should make monthly full-sum payment based on the feed-in tariff determined by the government or by bidding.
由电网企业按照国家规定或招标确定的上网电价与电网企业按月全额支付. For distributed PV, a system should be established for grid companies to transfer the subsidy monthly. The central government will pre-appropriate the subsidy capital to grid companies on a quarterly basis. As a result, grid companies have to bear the risk of advancing the payment, and PV stations’ sales revenue won’t be affected by the late payment or shortage of national subsidy. This regulation is very likely to gradually extend to other renewable energies such as wind power, which is good for whetting the enthusiasm of renewable energy developers and investors.
40 Study of market potential of CSP in China
3. Analysis of CSP's position and competitiveness in China's power industry
3.1 Basic situation and characteristics of Chinese power system
(1) Power generation
Since the reform and opening up, both installed capacity and electricity output have maintained high-speed growth in China. As of the end of 2012, there was 1140GW installed capacity in China with an annual electricity output of 4980TWh. From 1990 to 2012, China’s installed capacity and electricity output increased at the average annual rate of 10.1% and 9.9% respectively.
Thermal power is dominant in China’s power generation mix. As of the end of 2012, there was
820GW thermal power capacity with an annual electricity output of 3900TWh, most of which was coal-fired whereas oil-fired and gas-fired power had a very small proportion. Hydropower capacity was 250GW with an annual electricity output of 864.1TWh, ranking first in the world. Nuclear power has reached a fair scale step by step, with 12570MW installed capacity and 98.2TWh annual output. Wind power grew at a fast rate, with 60830MW on-grid capacity, which ranked first in the world, and 100.4TWh annual output. Solar power also entered the stage of scale development, with
3280MW on-grid capacity and 3500GWh annual output.
In light of regional distribution, China’s thermal power is mostly concentrated in economically developed provinces along the east coast, such as Jiangsu, Shandong, Guangdong and Zhejiang, as well as mid-western provinces abundant in coal resources, including Inner Mongolia, Shanxi and
Henan. In 2012, thermal power capacity in those regions accounted for 49.8% of the national total.
Hydropower capacity, on the other hand, is mainly concentrated in Hubei and southwestern provinces like Sichuan and Yunnan, the three of which took up 43.4% of China’s total hydropower capacity in 2012. Wind power is concentrated in Inner Mongolia, Hebei and Gansu, which took up
47.8% of China’s total wind power capacity in 2012.
41 Study of market potential of CSP in China
Figure 3-1 Power capacity and structure in China Source of data: China Electricity Council, Power Industry Statistics
42 Study of market potential of CSP in China
Figure 3-2 Electricity generation and structure in China Source of data: China Electricity Council, Power Industry Statistics
Table 3-1 Regional distribution of power installed capacity in China in 2012 Including Region Total Hydro Thermal Nuclear Wind Solar Nationwide 114491 24890 81917 1257 6083 328 (10MW) Inc.: Beijing 0.6% 0.4% 0.7% 0.2% Tianjin 1.0% 0.0% 1.4% 0.4% Hebei 4.3% 0.7% 4.9% 11.1% Shanxi 4.8% 1.0% 6.1% 3.2% 0.5% Inner Mongolia 6.8% 0.4% 7.3% 26.9% 3.0% Liaoning 3.4% 1.2% 3.7% 8.1% Jilin 2.1% 1.8% 2.0% 5.4% Heilongjiang 1.9% 0.4% 2.1% 5.3% Shanghai 1.9% 0.0% 2.6% 0.4% 0.4% Jiangsu 6.7% 0.5% 8.6% 16.9% 3.3% 13.1% Zhejiang 5.4% 4.0% 5.7% 34.4% 0.7% 0.4% Anhui 3.1% 1.1% 3.9% 0.5% 0.6% Fujian 3.4% 4.6% 3.2% 1.8% Jiangxi 1.7% 1.7% 1.8% 0.3% 0.2% Shandong 6.4% 0.4% 8.3% 6.3% 2.0% Henan 5.0% 1.6% 6.5% 0.3% Hubei 5.1% 14.4% 2.7% 0.3% 0.4% Hunan 2.9% 5.5% 2.3% 0.3% Guangdong 6.8% 5.2% 7.1% 48.7% 1.2% Guangxi 2.6% 6.1% 1.8% 0.2% Hainan 0.4% 0.3% 0.5% 0.5% 0.6% Chongqing 1.2% 2.4% 0.9% 0.1% Sichuan 4.7% 15.8% 1.8% 0.0%
43 Study of market potential of CSP in China
Including Region Total Hydro Thermal Nuclear Wind Solar Guizhou 3.5% 6.9% 2.7% 1.6% Yunnan 4.2% 13.1% 1.8% 2.1% 0.9% Tibet 0.1% 0.2% 0.0% 2.4% Shanxi 2.2% 1.0% 2.7% 0.2% 0.6% Gansu 2.5% 2.9% 1.9% 9.8% 11.6% Qinghai 1.3% 4.4% 0.3% 0.0% 41.6% Ningxia 1.7% 0.2% 2.0% 4.4% 16.2% Xinjiang 2.4% 1.7% 2.5% 5.2% 5.5% Source of data: China Electricity Council, Statistics Express of China Electric Power Industry in 2012.
China will maintain sustained and swift social and economic development in the future, so there is still large room for power demand increase. It is expected that by 2020, China’s total installed capacity will reach 2000GW with annual electricity output of 8600TWh, which will further rise to
2890GW and 11500TWh by 2030.
(2) Power consumption
With the rapid social and economic growth, total power consumption in China has increased substantially. In 2012, altogether 4960TWh electricity was used in China, up 5.5% year-on-year and
8.1 times as much as in 1990. Among that, primary industry used 101.3TWh, basically the same as the previous year; secondary industry used 3666.9TWh, up 3.9% year-on-year; tertiary industry used
569TWh, up 11.5% year-on-year; and urban and rural residents used 621.9TWh, up 10.7% year-on-year. Industrial power consumption was 3606.1TWh, 3.9% year-on-year, of which
608.3TWh was consumed by light industry and 2997.8TWh by heavy industry respectively, each up
4.3% and 3.8% compared with the previous year.
44 Study of market potential of CSP in China
Power consumption in China is mainly concentrated in the coastal region of eastern China. In
2012, the top five regions of total power consumption was Guangdong, Jiangsu, Shandong, Zhejiang and Hebei, taking up 9.3%, 9.2%, 7.7%, 6.5% and 6.2% of the national total respectively.
Figure 3-3 Top five regions for total power consumption in China Source of data: China Electricity Council, Statistics Express of China Electric Power Industry in 2012.
(3) Grid
To meet the demand for large-scale concentrated operation of power supply and the growth of power load, the scale of China’s grid has kept expanding at high speed. As of the end of 2012, there was 507000km transmission lines of 220KV and above, up 6.7% year-on-year and 6 times as long as in 1990. Substation capacity was 2280GVa, up 8.3% year-on-year and 17.6 times as much as in
1990.
45 Study of market potential of CSP in China
A national grid network has taken primary shape. As of the end of 2012, various grids in China were connected both AC and DC except for Taiwan, and a national grid network had taken primary shape, including five simultaneous grids, namely northern China-central China, eastern China, northeast, northwest and southern China. Asynchronous networking was realized between northeastern grid and northern China-central China grid through the Gaoling back to back DC transmission project, between northern China-central China grid and eastern China grid through the
3-loop ±500KV DC line (Gezhouba-Nanqiao, Longquan-Zhengping and Yidu-Huaxin) and
Xiangjiaba-Shanghai ±800KV DC line, between northwestern grid and northern China-central China grid through Lingbao back to back project, Deyang-Baoji ±500KV DC line and Ningdong-Shandong
±660KV DC line, and between northern China-central China grid and southern China grid through
Sanxia - Guangdong ±500 KV DC line.
Figure 3-4 Growth of grid of 220kV and above in China Source of data: China Electricity Council, Power Industry Statistics
46 Study of market potential of CSP in China
Figure 3-5 Grid network in China
(4) Power tariff Power tariff mechanism
The current power tariff system in China consists of two parts - feed-in tariff and retail price.
Since there isn’t an independent mechanism for power tariff formation and reflection, the price for power transmission and distribution is mainly reflected by the purchase/retail price difference on the grid. An independent mechanism for power transmission and distribution price hasn’t been formed yet.
Retail price is decided by the government, which is gradually adjusted and formed on the basis of the Electricity and Heating Price enacted by the government in 1976. Retail price is divided into different categories, such as residential power, non-residential lighting, commercial power, non-industrial and general industrial power, large-scale industrial power, power for agricultural production and power for agricultural drainage and irrigation in poor counties. Large-scale industrial power includes many sub-divisions too. At the same time, users are also divided into groups according to different voltages. Two forms of retail price are mainly implemented today - consumption-based price and mixed price, and other forms have been gradually introduced as
47 Study of market potential of CSP in China needed, including valley/peak price, flood/dry price, and price for high reliability and interruptibility.
Generally, the price is adjusted and formed according to grid companies’ purchase cost and changes in generating cost. Cross-subsidy among power users is serious.
Feed-in tariff is generally decided by the government at the moment, but market mechanism is introduced gradually. It also exists in multiple forms, including tariff during operation, benchmark tariff, linkage between coal price and power tariff, bidding tariff and market-based tariff.
There are three levels to power transmission and distribution price based on grid structure and corporate operational and managerial system, and price formation on each level is different. The first level is cross-regional grid operated by grid HQ, in which price of special transmission project (e.g.
Three Gorges transmission/substation project) is decided by NDRC and price of grid connection project (e.g. central China-northern China grid connection project) is decided by companies themselves through consultation. The second level is cross-provincial grid operated by regional grid companies. Except for certain transmission business, for which NDRC ratifies the price, consultation-based price and expense sharing are mainly implemented. The third level is provincial grid, for which no independent mechanism for price formation and reflection has been formed yet, so grid price is settled by adjusting retail price and feed-in tariff. Power tariff management
Retail price is determined by price authority of the State Council. When formulating and adjusting retail price, opinions from power regulators, power industry associations and relevant market entities should be heard, and formulation and adjustment of retail price of residential power must be passed by a hearing.
Before power market was established and price competition implemented, feed-in tariff was decided by government, but afterward it was decided by market. Before price competition was
48 Study of market potential of CSP in China implemented, feed-in tariff of units dispatched by provincial and higher-level grid was decided and published by price authority of the State Council, while feed-in tariff of other power generators was decided and published by provincial price authority, though power regulators could make suggestions about tariff adjustment according to relevant regulations. Before price competition was implemented, capacity-based tariff of the competing units was decided by price authority of the State
Council but output-based tariff was decided through market competition, with power regulators exercising oversight of the power market.
Regarding the management of power transmission and distribution price, it is provided in the
Notice By NDRC on Methods of Implementing Power Price Reform (NDRC Price[2005] 514) that price authority of the State Council is responsible for formulating the power transmission and distribution price of public network, grid connection price, transmission price of special transmission project and price for connecting to cross-provincial grid. Provincial price authority should propose price scheme for connecting to provincial grid to the price authority of the State Council for review and approval, and should work out distribution price for independent distributors. Power regulators make suggestions to price authority about power price adjustment according to laws, administrative regulations and relevant stipulations of the State Council.
Besides, State Commission Office of Public Sectors Reform (SCOPSR) issued a document titled Notice on Clarifying the Division of Duties between NDRC and SERC (SCOPSR[2005]13), which further clarified the division of duties for the management of power transmission and distribution price. NDRC confers with SERC to enact the methods for overseeing and reviewing transmission and distribution cost, and they will jointly enact and implement the methods.
Transmission and distribution price of cross-regional grid is reviewed by SERC and submitted to
NDRC for approval in the following procedures: grid operator submits the price scheme to SERC
49 Study of market potential of CSP in China with a copy to DNRC, SERC reviews the price scheme and submits it to NDRC for approval before implementation. Transmission and distribution price of cross-provincial grid is reviewed and approved by NDRC, which shall ask for SERC’s opinion. Detailed procedure is as follows: grid operator submits the price scheme to NDRC with a copy to SERC, NDRC asks for SERC’s opinion before approving the price scheme for implementation. As to transmission and distribution price for direct power supply to large-scale users, SERC should provide primary opinion on the price scheme and then submit it to NDRC for review and approval. (5) Power reform
Transform government function in power management. Currently, government management of power industry hasn’t been fundamentally changed, which is characterized by tedious administrative approving formalities, cross-function among government departments and disconnection between power and responsibility. First, the way that project investment is reviewed and approved should be changed. Review and approval of plan should be the main approach for grid investment, and overall considerations should be given to verifying effective assets and formulating the price. Existing review and approving process for investment in power generation should be streamlined. Carry out pilot bidding for power generation projects and gradually establish a market-based mechanism for power generation investment. Second, enhance government’s management efficiency, optimize its management of power industry in method, means and content, and set up a central power management organization featuring concentrated functions, clear division of duties and high operation efficiency.
50 Study of market potential of CSP in China
Accelerate building a uniform power market system in China. According to the mode of overall design, uniform management and layered operation, build a two-level power transaction market - the state level and the provincial level. In the state-level market, cross-provincial, large-area and medium and long-term power transaction will play the main part, complemented by short-term transaction, and bilateral transaction will be the main form with price competition as an auxiliary form. Medium and long-term transaction based on bilateral consultation will be gradually adopted for large-scale thermal power, hydropower, nuclear and renewable energy projects that are of strategic significance for the nation. Provincial power market mainly undertakes power transactions within the province. As there is a larger variety of wholesale power transaction, an auxiliary transaction mechanism will be established step by step to ensure safe and stable grid operation.
Details are shown in Figure 3-6.
Figure 3-6 Power wholesale market during 12th Five-year Period
Competition will be introduced on power seller’s side. SERC, NDRC and NEA all take pilot direct power purchase by large-scale users as a critical step for promoting power industry reform. In
January 2012, SERC, NDRC and NEA approved Jiangsu province to carry out pilot transaction of direct power supply to large-scale users. At the end of January, direct power transaction with
51 Study of market potential of CSP in China large-scale users was temporarily launched in Inner Mongolia. So far, the government has approved
6 pilot areas, namely Jilin, Taishan of Guangdong, Liaoning, Anhui, Fujian and Jiangsu. SERC suggested “carrying out pilot direct power supply to large-scale users in hi-tech industrial parks”; in its Several Opinions on Promoting Sound and Rapid Economic and Social Development of Guizhou,
NDRC designated Guizhou as a pilot province for power price reform, an attempt to explore methods and ways for power generators and users to do business directly with each other; and NEA proposed to “allow direct transactions between large-scale users, independent power distribution and sales enterprises and power generators step by step”. Currently NEA is considering making Inner
Mongolia (western China) a pilot province to initiate the reform on de-regulating feed-in tariff and establishing a market for multilateral transactions (mainly between power generator and large-scale user), and explore the mechanism for retail power price, feed-in tariff as well as the coal and power price linkage.
Improve power tariff mechanism. Feed-in tariff for power plants is formed through consultation between market entities or through market competition, renewable energy power plants participate in market competition and subsidy is provided by government fund. At this stage, inter-provincial grid price is still approved by government price authority and based on the inter-provincial transaction price reported by grid companies, including the fees charged for transmitting electricity to another province. Basically the current inter-provincial transaction price of grid companies remains unchanged. Power price of provincial grid is ratified by the government based on various voltages. Power purchase price for users with options includes feed-in tariff, inter-provincial grid price and provincial grid price. If power sellers and large-scale users only purchase power in the province, they don’t have to pay inter-provincial grid price. Power purchase price for regulated users is linked with feed-in tariff and grid price, and studies are conducted to
52 Study of market potential of CSP in China open accounts for power tariff balance. Reform should be continued to categorize retail power price and implemented differentiated price adjustment.
3.2 CSP's position and role in Chinese power system
CSP is an important technical path for solar energy development in China, as well as an important component of solar power development. Depending on inexpensive heat storage device, CSP has been a renewable energy power generation technology that features all-weather operation, stable output and friendliness to grid. The features are incomparable for wind power and PV power generation. Developing CSP plays an important role in expanding utilization of solar energy and driving development of related industries.
CSP is an important technical method for expanding utilization of solar energy in China.
Analyzed as resource condition and technical economy, large centralized solar power stations will concentrate in resourceful regions of western China in the future. As the latest development plan of the state, by 2015, capacity of PV power station in China will reach 13.1GW, and that in the western provinces (Inner Mongolia, Ningxia, Qinghai, Gansu, Xinjiang, etc.) will reach 9.85GW, sharing 3/4 in the total of the state. Given the western provinces have low load and weak grid structure, large-scale development of PV power generation there tends to cause decrease in safety margin and stability margin of grid, extensive reversion of reactive power flow and excess of voltage. As a result, developing CSP station with function of heat storage thus giving full play to good adjustability of output can not only expand utilization of solar energy, but also offer services of peak shaving and frequency modulation for PV power station thus push grid-connected digestion of power from CSP station.
53 Study of market potential of CSP in China
CSP is an important driver for development of traditional manufactures in China. Industry chain of CSP is long and covers dozens of industries from upstream to downstream. Different from industry chain of PV power generation, most links in industry chain of CSP are subordinate to traditional manufactures, such as glass, steel, chemical and power equipment manufacture. Therefore, industrialization of CSP will offer new motivation for associated industries. At present, all of China’s traditional manufactures are suffering excess production capacity. Expansion of CSP can digest part of excess production capacity thus is favorable to keeping international competitiveness of these manufactures.
CSP is an important way for implementing grid parity of solar energy. With technical progress, maturity of operation mode and expansion of application scale, rapid decrease in CSP cost will be hopeful. Estimated by International Renewable Energy Agency (IRENA), CSP cost will decrease by
40%~45% from 2010 to 2025. Decrease in investment, improvement in power generation efficiency and scale economy effects are main drivers for decrease in cost/kWh. Also demonstrated in predictions by IEA, Greenpeace and Department of Energy, costs of all CSP technologies will decrease a lot in the future. By 2020, CSP cost/kWh will be equivalent to cost of PV power generation or new coal-fired or gas-fired power plant, so that grid parity will be implemented at side of power generation.
Upon analysis in comprehensive consideration of characteristics of PV power generation and thermal power generation, building of large solar power generation base in near future in China can focus on PV power generation. In medium and long term, the technical path of simultaneously developing PV power generation and CSP shall be sustained in development of solar power generation in China, and large-scale CSP station shall be built where appropriate. Next, in company with pushing of PV power generation, investment in R & D of CSP technology and equipment shall
54 Study of market potential of CSP in China be improved and demonstrative power station shall be built to launch CSP market as soon as possible, push maturity of technology and equipment and put CSP into the active role in adjustment of energy structure, energy saving and emission reduction in China’s energy structure.
3.3 Economy of CSP and international experience in its application
3.3.1 CSP cost and influencing factors
CSP cost/kWh is primarily influenced by total cost of solar power generation and total generating capacity. The total cost depends on initial investment, while the total generating capacity depends on scale of heat storage and hours of effective utilization.
(1) Initial investment cost
Construction cost of power station differs under different scales of power station, scales of heat storage system, lighting conditions, land costs and manpower costs. As for initial investments of the
4 CSP technologies, in general, construction cost of disc-type CSP station is highest, about twice of that of mast-type CSP station. That of slot-type CSP station is a little lower than that of mast-type
CSP station but a little higher than that of Fresnel CSP station.
According to information from related bodies, initial investment cost of slot type or mast type without heat storage that has been put into commercial operation is USD 4500~7150/kw, and that of slot type or mast type with heat storage is USD 5000~10500/kw. For detail, see Table 3-2
Table 3-2 Initial Investment Cost of Slot type or Mast type Energy Capacity Investment (USD/kw. Heat carrier storage (h) factor (%) 2010) Synthetic oil 0 26 4600 Synthetic oil 0 23 7144 Synthetic oil 6 41 8000 Slot type Synthetic oil 6.3 47-48 8950-9810 Synthetic oil 6 43 7732 Molten salt 4.5 50 7380
55 Study of market potential of CSP in China
Energy Capacity Investment (USD/kw. Heat carrier storage (h) factor (%) 2010) - 9 56 7550 - 13.4 67 9140 Molten salt 7.5 7280 Molten salt 6 43 6300 Molten salt 9 48 7427 Mast type Molten salt 6 41 7463 Molten salt 9 54 7720 - 12 68 9060 - 15 79 10520 Data source: IRENA: RENEWABLE ENERGY TECHNOLOGIES: COST ANALYSIS SERIES-Concentrating Solar Power, June 2012
In initial investment of CSP station, share of condensation field is highest. According to related data, compositions of initial investments of slot type and mast type are shown on Fig. 3-7 and Fig. 3-8.
Fig. 3-7 Composition of Investment Cost of Slot Type
Fig. 3-8 Composition of Investment Cost of Mast Type 发电系统 22% Power generation system, 22% 储能 8% Energy storage, 8% 光场 51% Light field, 51% 间接成本 17% Indirect cost, 17% 土地 2% Land, 2%
储能 4% Energy storage, 4%
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塔 5% Mast, 5% 接收器 13% Receiver, 13% 光场 39% Light field, 39% 间接成本 17% Indirect cost, 17% 土地 2% Land, 2% 发电系统 20% Power generation system, 20%
Data source: CSIRO: Concentrating Solar Power-Drivers and Opportunities for Cost-competitive Electricity, March 2011
However, initial investments of slot type and mast type slightly differ with each other under different ratios of energy storage. Compositions of initial investments of slot type and mast type under typical ratios of energy storage are shown in Fig. 3-9 and Fig.3-10.
Fig. 3-9 Composition of Investment Cost of Slot Type under Different Ratios of Energy Storage 发电系统 22% Power generation system, 22% 储能 8% Energy storage, 8% 光场 51% Light field, 51% 间接成本 17% Indirect cost, 17% 土地 2% Land, 2%
储能 4% Energy storage, 4% 塔 5% Mast, 5% 接收器 13% Receiver, 13% 光场 39% Light field, 39%
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间接成本 17% Indirect cost, 17% 土地 2% Land, 2% 发电系统 20% Power generation system, 20%
Data source: IRENA: RENEWABLE ENERGY TECHNOLOGIES: COST ANALYSIS SERIES-Concentrating Solar Power
Fig. 3-10 Composition of Investment Cost of Mast Type under Different Ratios of Energy
Storage 间接成本 Indirect cost 发电系统 Power generation system 储能 Energy storage HFT 系统 HFT system 光场 Light field 选址 Site selection 6 小时储能 6h energy storage
Data source: IRENA: RENEWABLE ENERGY TECHNOLOGIES: COST ANALYSIS SERIES-Concentrating Solar Power
Detailed compositions of costs of slot types and mast types that have different structures and were built in different years in typical region are compared in Table 3-3 and 3-4.
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Table 3-3 Detailed Composition of Cost of Typical Slot type Parameter Ecostar (2005) Turchi (2010) Developer (2011) Installed capacity 50 100 50 (MW) Capacity factor (%) 28.5 40 23 Light field (USD/m2) 385 320 538 HTF system 98 39 (USD/m2) Energy storage (USD/ 58 87 79 kWh) Power generation 1327 1021 2885 system (USD/ kW) Initial investment 6600 (3h energy 8688 (6h energy 7501 (without energy cost (USD/ kW) storage, wet cold) storage, wet cold) storage, wet cold)
Data source: CSIRO: Concentrating Solar Power-Drivers and Opportunities for Cost-competitive Electricity, March 2011
Table 3-4 Detailed Composition of Cost of Typical Mast Type Parameter Ecostar (2005) Sandia (2010) Installed capacity (MW) 51 100 Capacity factor (%) 33 48 Energy storage (USD/ kWh) 24 33 Mast + receiver (USD/ kW) 216 217 Light field (USD/m2) 266 217 Power generation system 1298 1380 (USD/ kW) Initial investment cost (USD/ 6494 (3h energy storage, wet 8066 (9h energy storage, wet kW) cold) cold) Data source: CSIRO: Concentrating Solar Power-Drivers and Opportunities for Cost-competitive Electricity, March 2011
As considered by IEA based on research, cost of disc-type/Stirling CSP system doesn’t decrease with increase in capacity, and such system is suitable for distributed power generation. Costs of both slot type and mast type decrease with increase in capacity, and such system is suitable for developing large-capacity power station. With expansion of capacity, initial cost per KW decreases. When capacity increases from 50MW to 100MW, the cost will decrease by 12%. When capacity increases from 50MW to 200MW, the cost will decrease by 20%. For mast type, initial investment can
59 Study of market potential of CSP in China decrease by 20% if efficiency is improved from 15% to 25%.
(2) Operation and maintenance cost
Operation and maintenance cost of CSP is lower than that of ordinary generator, but is non-ignorable.
For example, operation and maintenance cost of SEGS (USA) is about USD 0.04/KWH, and covers replacement of receiver and reflector as well as cleaning of reflector and consumption of water.
With technical progress, operation and maintenance cost of CSP is much lower than that of SEGS.
Thanks to automation, the cost has lowered by 30%, and now is as low as USD 0.025/KWH. At present, operation and maintenance cost and variable cost of slot type in USA are USD 0.015/KWH and USD 0.003/KWH, respectively. However, due to increase in insurance premium and miscellaneous expense, the total operation and maintenance cost has been improved to USD
0.02~0.03/KWH. Operation and maintenance cost of mast type is about USD 65/KW-year.
Operation and maintenance cost of CSP station slightly differs under different ratios of heat storage.
For example, fixed cost shares 92% in operation and maintenance cost of 100MW slot type with 9h energy storage, as much as USD 14.6 million/a. Compositions of operation and maintenance cost under different scales and ratios of heat storage are shown on Fig. 3-11.
60 Study of market potential of CSP in China
Fig. 3-11 Composition of Operation and Maintenance Cost of CSP 2010 美元/KWh USD/KWh, 2010 4.5 小时 4.5h 槽式 Slot type 塔式 Mast type 可变成本 Variable cost 固定成本 Fixed cost
Data source: IRENA: RENEWABLE ENERGY TECHNOLOGIES: COST ANALYSIS SERIES-Concentrating Solar Power
(3) Direct normal irradiation (DNI)
Direct normal irradiation (DNI) is an important influencing factor for CSP cost/kWh. DNI directly influences hours of power utilization. Fig. 3-12 shows relation between DNI and capacity coefficient in a few typical stations.
Fig. 3-12 Relation between DNI and Hours of Power Utilization 发电利用小时数 Hours of utilization 法向直射辐射强度 DNI
Data source: IRENA: RENEWABLE ENERGY TECHNOLOGIES: COST ANALYSIS SERIES-Concentrating Solar Power
61 Study of market potential of CSP in China
Fig. 3-13 Change of CSP Cost/kWh with DNI Data source: IRENA: RENEWABLE ENERGY TECHNOLOGIES: COST ANALYSIS SERIES-Concentrating Solar Power
DNI 每增加 100KWh/m2/年, 度 Whenever DNI increases by 100KWh/m2/a, the
电成本下降 4.5% cost/kWh will decrease by 4.5%.
%（对比西班牙电站） % (compared to station of Spain)
意大利 Italy
希腊 Greece
土耳其南部 South Turkey
西班牙 Spain
葡萄牙 Portugal
阿联酋 UAE
突尼斯 Tunisia
亚利桑那（美国） Arizona (USA)
沙特阿拉伯 Saudi Arab
摩洛哥 Morocco
62 Study of market potential of CSP in China
美国内华达 Nevada (USA)
澳大利亚 Australia
加利福尼亚州（美国） California (USA)
阿尔及利亚 Algeria
南非 South Africa
智利 Chile
Power output of CSP system depends on capacity of heat storage device. Seen from operation of
CSP station with heat storage that has been put into operation, annual hours of effective utilization can be more than 4,000.
Normally, higher DNI brings higher annual generating capacity and lower cost/kWh. Fig. 3-13 shows change of cost/kWh with DNI. Cost/kWh decreases by 4.5% whenever DNI increases by
100kWh/m2/y.
(4) Cost/kWh
CSP costs /kWh under different initial investments are shown in Table 3-5. Converted as exchange rate, the costs/kWh of slot type and mast type are RMB 1.2~2.4/kWh and 1.3~2.4/kWh, respectively.
Table 3-5 Costs/kWh of Slot Type and Mast Type Slot type Mast type
USD/kWh USD/kWh
Without heat storage 0.16-0.18 0.2-0.3
Mixed 0.2-0.3 --
With heat storage 0.15-0.18 0.16-0.25 Data source: Feasibility and Policy of CSP in China
As studied by IEA, the cost/kWh of large slot type is USD 200~295/MWH. Ratio of heat storage significantly influences total investment. However, since hours of utilization are improved, it less
63 Study of market potential of CSP in China influences the cost/kWh.
Under different ratios of energy storage, the cost/kWh of CSP station differs. the costs/kWh of slot type and mast type are USD 0.20~0.33/kWh and USD 0.16~0.27/kWh, respectively. For example, influence of ratio of energy storage on cost/kWh of 100MW slot type is shown on Fig. 3-14.
Fig. 3-14 Influence of Ratio of Energy Storage on Cost/kWh Data source: IRENA: RENEWABLE ENERGY TECHNOLOGIES: COST ANALYSIS SERIES-Concentrating Solar Power 美元/KWh USD/KWh 热储能 Heat storage 光场规模（太阳能倍率） Scale of light field (magnification of solar energy)
3.2.2 Analysis of cost/kWh of typical projects both in China and abroad
CSP in China is on start-up phase and hasn’t developed to a mature and complete industry chain.
Since there’s no CSP station that has been practically put into commercial operation, no technical or economic data about investment, construction or operation is available for cost analysis. In the paper, data from overseas typical stations in operation is selected.
Andasol 1 (Spain): Put into operation in 2009 and located under DNI of 2050kWh/m2, the station is
64 Study of market potential of CSP in China a slot type with installed capacity of 50MW and 7.5h heat storage device. Its unit investment and cost/kWh are EURO 5600 /kW and 22 Euro Cents /kWh.
Table 3-6 Cost/kWh of Slot type Name of index Unit Andasol 1
Technology - Slot type
Installed capacity MW 50
Unit investment cost EURO/kW 5600 Operation and maintenance EURO/MWh 38.8 cost Capacity factor % 38.8
Discount rate % 9
Service life Year 40
Cost/kWh, 2010 Euro Cents/kWh 22
SEGS (USA): As the CSP station earliest put into commercial operation, SEGS has operated for twenty-odd years. For its basic information and cost/kWh, see Table 3-7
Table 3-7 Data about SEGS Name of station Unit SEGSⅠ-Ⅱ SEGSⅢ-Ⅶ SEGSⅧ-Ⅸ
Location - California California California
Type - Slot type Slot type Slot type
Time of commissioning - 1984-1985 1986-1988 1989-1990
Installed capacity MW 13.8、30 30×5 80×2
Annual generation efficiency % 9.5-10.5 11.0-12.5 13.8
Unit construction price USD/kW 3800-5000 3200-3800 2890
Generation cost USD/kWh 0.18-0.27 0.12-0.18 0.11-0.14
Queensland Mast-type CSP Station (USA): The mast-type station with installed capacity of 100MW and 6h heat storage device has been put into operation. It is supported by technology of air cooling.
For its basic information and cost/kWh, see Table 3-8
65 Study of market potential of CSP in China
Table 3-8 Data about Queensland Mast-type CSP Station Name of index Unit Mast type
Installed capacity MW 100
Unit investment cost USD/kW 7906 Annual operation and USD/kW 71 maintenance cost Capacity factor % 40.9
Discount rate % 7
Service life Year 20
Cost/kWh, 2010 USD/kWh 0.226
3.2.3 Changing trend of cost/kWh
(1) Initial investment cost
As studied by IEA, there’s a potential of decrease of 30%~40% in initial investment cost in the future 10 years. For mast type, with increasing maturity of technology, the potential is 40%~75%.
By 2025, costs of all CSP technologies will decrease a lot. To lower cost, slot type will develop to simpler system (For example, Fresnel system is a simplification of slot system). When it comes to specific type, given mast-type power generation is very potential in technical progress and efficiency improvement, its cost will decrease rapidly in the future 5 years. With a view to commercial operation of GemaSolar molten salt mast type (19.9MW) capable of heat storage as long as 15g, the cost/kWh of mast type will get lower than that of slot type by 2013.
As predicted in CSP Outlook 2009 published by Greenpeace, unit construction cost of CSP will decrease from EURO 3800/kW of 2010 to 2280/kW of 2050, by rate of 40%. In detail, decrease from 2010 to 2020 will be as significant as 25%, and decrease rate from 2020 to 2040 will slow down to 14%. Thereafter, with technical progress, decrease rate will increase to 8% from 2040 to
2050.
66 Study of market potential of CSP in China
Fig. 3-15 Predicted Trend of Decrease in Unit Investment of CSP Data source: Greenpeace, CSP Outlook 2009 欧元/千瓦 EURO/kw
Initial investment costs of slot type and mast type by 2015 under different ratios of energy storage are predicted as Table 3-9.
Table 3-9 Predicted Initial Investment Costs under Different Ratios of Energy Storage by 2015 2011 2015 Energy storage Type Capacity factor Capacity capacity USD/kW, 2010 USD/kW, 2010 (%) factor (%) Without energy 4600 20-25 3900-4100 20-25 Slot storage type 6h energy 7100-9800 40-53 6300-8300 40-53 storage 6~7.5h energy 6300-7500 40-45 5700-6400 40-53 Mast storage type 12~15h energy 9000-10500 65-80 8100-9000 65-80 storage Data source: IRENA: RENEWABLE ENERGY TECHNOLOGIES: COST ANALYSIS SERIES-Concentrating Solar Power
(2) Cost/kWh
As studied by IRENA, by 2025, CSP cost/kWh can decrease by 40%~55% from the level of 2010, as shown on Fig. 3-13. In detail, from 2010 to 2015, the cost will decrease with decrease in investment cost, by 18%~22%; from 2015 to 2020, the cost will decrease with improvement in efficiency, by
10%~15%; from 2020 to 2025, the cost will decrease with scale economies scale, by 21~33%.
67 Study of market potential of CSP in China
Fig. 3-16 Trend of Decrease in Cost/kWh, 2010~2025 Data source: IRENA: RENEWABLE ENERGY TECHNOLOGIES: COST ANALYSIS SERIES-Concentrating Solar Power
下降 40.55% Decrease of 40.55%
第一个大规模机组 The first large-scale generator
投资成本下降 Decrease in investment
效率提高 Improvement in efficiency
规模经济 Scale economy
2025 年 LCOE LCOE of 2025
The cost/kWh of CSP station without heat storage will decrease from USC 30~38/KWH of 2011 to
26~33/KWH of 2015. Cost/kWh of CSP station with 6h heat storage will decrease from USC
22~37/KWH of 2011 to 18~33/KWH of 2015.
68 Study of market potential of CSP in China
Fig. 3-17 Trend of Decrease in Cost/kWh of CSP with Heat Storage, 2015 Data source: IRENA: RENEWABLE ENERGY TECHNOLOGIES: COST ANALYSIS SERIES-Concentrating Solar Power 2010 美分/kWh USC/kWh, 2010 无储能 Without energy storage 6 小时储能 6h energy storage 无储能 Without energy storage
By selecting different positions of cost decrease, IEA, DOE and IRENA predicted CSP cost/kWh by
2020 at high level and low level. As predicted, by 2020, the cost/kWh of slot type will decrease to
USD 0.10~0.14/kWh; that of mast type will decrease to USD 0.08~0.16/kWh.
Table 3-10 Predicted Cost/kWh of CSP, 2020 Cost/kWh by 2020 Cost/kWh by 2020 Type (high level) Remark (low level) (USD/kWh) (USD/kWh) Large generator, IEA,2010 0.10 0.14 discount rate: 10% Data from USA, Slot DOE,2010 0.10 0.11 excl. tax relief type Calculated as data about IRENA,2011 0.13 100MW generators of
69 Study of market potential of CSP in China
Cost/kWh by 2020 Cost/kWh by 2020 Type (high level) Remark (low level) (USD/kWh) (USD/kWh) Queensland and Australia, discount rate: 7% Data from USA, DOE,2010 0.08 0.09 excl. tax relief Calculated as data about Mast 100MW type generators of IRENA,2011 0.16 Queensland and Australia, discount rate: 7% Data source: IRENA: RENEWABLE ENERGY TECHNOLOGIES: COST ANALYSIS SERIES-Concentrating Solar Power
With a view to detailed composition of cost, trend of decrease in costs of slot type and mast type is predicted with the model NREL SAM. For example, trend of decrease in costs of the 100MW project in Queensland is shown on Fig. 3-15. By 2017, total cost of slot type will decrease about 41%, including decreases in cost of light field (32%) and operation and maintenance cost (36%). By 2020, total cost of mast type will decrease about 28%, including decreases in cost of light field (40%) and operation and maintenance cost (24%).
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Fig. 3-18 Trend of Decrease in Costs of Slot Type (2017) and Mast Type (2020) Data source: IRENA: RENEWABLE ENERGY TECHNOLOGIES: COST ANALYSIS SERIES-Concentrating Solar Power
槽式 Slot type
塔式 Mast type
运维成 Operation and
本 maintenance cost
现场改 Site improvement
善
HTF HTF system
系统
发电系 Power generation system
统
间接成 Indirect cost
本
储能 Energy storage
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光场 Light field
接收器 Receiver and mast
和塔
3.4 Analysis of economy and competitiveness of CSP projects
3.4.1 Analysis of economy of CSP projects
At present, most CSP stations at home are on stage of demonstration or test. As a result, there’s less referable information about initial investment and operation cost. In the report, economic indexes of the CSP project in Delhi, Haixi, Qinghai are calculated under different solutions.
(1) Construction scheme
Total installed capacity of the project is 3×135MW (Phase 1: 1×135MW). Turbine selected is non-reheat straight condensing type that produces superheated steam of 17MPa and 565℃. Its regenerative system is made of 8-level steam extraction system, gland steam system, lubricating oil system, hydraulic control system and steam inlet valve. High-pressure steam is produced by superheater of heat absorber or gas-fired boiler, and enters turbine through main steam pipe system.
Exhaust from turbine is subject to direct air cooling.
The 135MW non-reheat turbine generator can be localized. New steam produced by heat absorber in the project has reached subcritical level (i. e. 17MPa, 568℃). For non-reheat turbine, intermediate dehumidification device shall be designed, otherwise service life of turbine will be badly impacted by high water content of last stage blade. Harbin Turbine Company Limited and Dongfang Turbine
Co., Ltd. indicated capability of producing 135MW subcritical non-reheat turbine. Given this, economic assessment on the current phase is full based on domestic model.
Selecting natural gas as auxiliary fuel is aimed to providing stable power output. On the whole, solar
72 Study of market potential of CSP in China radiation rises and then falls everyday with time. Due to meteorological factors e.g. large block of clouds, solar radiation can fall transiently. To keep power out from sudden change, at the transient, the natural gas boiler in hot standby improves output load to compensate for short demand of turbine due to fall of solar radiation. On a day when solar radiation changes evenly, namely is free from impact by clouds, output of natural gas boiler only needs to support preheating of thermodynamic system at start. When DNI reaches a certain value, auxiliary boiler can stop production of steam.
Based on orientation of demonstrative project, heat storage is considered in the project to verify feasibility of heat storage technology. Also, increasing heat storage is favorable for optimizing output curve of CSP station, tackling risk of power brownouts and keep stable output. Under the policy of TOU power price to be executed, depending on heat storage, power can be generated in period when power price is higher so that higher income can be got. However, heat storage needs additional investment thus will increase initial investment cost of the project.
In comparison, as for cost, the solution without heat storage needs lower investment and the solution with heat storage needs higher investment; as for operation, the solution without heat storage can’t optimize operation curve or tackle risk of power brownouts, while the solution with heat storage is flexible and can tackle the risk; as for income, under the policy of TOU power price, the solution without heat storage can’t benefit from the policy, while the solution with heat storage presents better economy.
(2) Operation mode
By absence/presence of heat storage and operation mode, 4 solutions are established.
Solution 1: 1×135MW, without heat storage
The solution is supported by technical scheme without heat storage. Its typical daily operation mode in summer is,
73 Study of market potential of CSP in China
Fig. 3-19 1×135MW, without Heat Storage
The figure above shows typical daily output curve in summer under the initial technical scheme.
Since the solution is free of heat storage, the curve can’t be optimized, and limited output can occur at peak of daytime.
Solution 2: 3×135MW, without heat storage
The solution is supported by technical scheme without heat storage and 3×135MW generator. Its typical daily operation mode in summer is,
Fig. 3-20 3×135MW, with Heat Storage
In the solution, the situation of 3 generators throughout the project is considered. Operation mode of the solution is identical to that of solution 1. However, thanks to scale effect, its generation cost is much lower. This is analyzed in detail in the next section.
Solution 3: 1×100MW, with heat storage
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The solution is supported by technical scheme with heat storage and 1×100MW generator. Its typical daily operation mode in summer is,
Fig. 3-21 1×100MW, with Heat Storage
Compared to solution 1, the solution has heat storage system, thus is capable of full output as well as heat storage in daytime, and allows power generation with stored heat from 7:00 PM to 9:00 PM.
This guarantees output in daytime meanwhile prolongs time of power generation. Technically, the solution has better flexibility, and better matches with load.
Solution 4: 3×100MW, with heat storage
The solution is supported by technical scheme with heat storage and 3×100MW generator. Its typical daily operation mode in summer is,
Fig. 3-22 3×100MW, with Heat Storage
In the solution, the situation of 3 generators throughout the project is considered. Operation mode of the solution is identical to that of solution 3. However, thanks to scale effect, its generation cost is
75 Study of market potential of CSP in China much lower. This is analyzed in detail in the next section.
(3) Basic parameters for calculation
1) Basic parameters
The project is considered as domestic-funded, and its investment consists of capital fund (20%) and financing (80%). Loan for the project is subject to national standard concerned (annual interest rate:
6.55%, settled by quarter). Static investment of the project is planned by year (50% in the 1st year, the other 50% in the 2nd year). Power price is calculated on the premise that generation cost, tax and surplus accumulation fund are fulfilled and loan are paid off in 13 years. Other basic parameters for calculation are shown below.
Table 3-11 Basic Parameters for Calculation
Name of parameter Value Unit
Life cycle 30 Year Construction period 2 Year Share of loan 20% % Price of natural gas (incl. tax) 78.62 RMB/MMBTU LHV Years of loan 13 Year Loan interest 6.55% % VAT rate 17% % Surcharge rate 3.14% % Natural gas input tax rate 13% % Income tax rate 25% % Surplus accumulation fund 10% % Depreciation life 15 Year Residual value rate of fixed asset 5% % Internal rate of return (IRR) 8% %
2) Estimate of initial investment
Total investment and item investments preliminarily estimated as basic parameters of the project are shown in the table below, by the 4 solutions.
Table 3-12 Estimate of Initial Investment, *RMB 10000
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1×135MW, 3×135MW, 1×100MW, 3×100MW, Solution without heat without heat with heat with heat storage storage storage storage Scale of generator 1×135 3×135 1×100 3×100 Share of natural gas, % 9% 9% 9% 9% With/without energy storage Without Without With With Total installed capacity 135 405 100 300 Initial investment cost (*RMB 10000) Main and auxiliary production 185430 469293 205430 522293 work Solar energy system 132467 350135 132467 403135 Power generation system 52963 119158 72963 119158 Thermodynamic system 17755 53264 17755 53264 Fuel supply system 10581 10581 10581 10581 Water treatment system 816 1958 816 1958 Water supply system 8411 22710 8411 22710 Electrical system 6361 13690 6361 13690 Thermotechnical control system 3052 6837 3052 6837 Auxiliary production work 5987 10118 5987 10118 Heat storage system 0 0 20000 53000 Related works 3049 8278 3049 8278 Price difference of year of 3105 7453 3105 7453 preparation Other expenses 14514 24106 14514 21772 Static investment cost 206098 509130 226098 506796 Dynamic expense 9195 30735 10087 30735 Loan interest during construction 9195 30735 10087 30735 Dynamic investment cost 215,293 539865 236,185 537531
3) Parameters for operation cost
In actual operation, operation and maintenance cost and power output differ under different solutions, detailed as the table below.
Table 3-13 Parameters of Operation Cost, *RMB yuan 1×135MW, 3×135MW, 1×100MW, 3×100MW, Solution without heat without heat with heat with heat storage storage storage storage Power output, consumptions of
77 Study of market potential of CSP in China water and natural gas Annual power output, MWH 284,360 853,080 284,360 853,080 Power output from CSP, MWH 258,875 776,625 258,875 776,625 Power output from natural gas, 25,485 25,485 76,455 MWH 76,455 Consumption of natural gas, 341,325 341,325 1,023,975 MMBTU 1,023,975 Consumption of water, t 40,000 120,000 50,000 846,000 Operation and maintenance cost Mean material cost: RMB 1,137,440 1,137,440 3,412,320 4/MWh 3,412,320 Other costs: RMB 10/MWh 2,843,600 8,530,800 2,843,600 8,530,800 Auxiliary power ratio: 8% 8% 8% 8% 8% Wages 2,850,000 8,550,000 2,850,000 8,550,000 Water rate: RMB 2/t 80,000 240,000 100,000 1,692,000
(4) Analysis on economy
In the calculation, the VAT policies of 50% return at collection and no privilege are separately considered for 4 solutions.
Seen from result of economic assessment, the solutions significantly differ in economy. Specific indexes for economic assessment are shown in the table below.
1) Solution 1: 1×135MW, without heat storage
Table 3-14 Indexes for Economic Assessment, Solution 1 (1×135MW, without heat storage)
Static investment RMB 2.06098 billion Annual power output 28436 kWh
Annual hours of Dynamic investment RMB 2.15293 billion 2106h effective utilization
Investment payback Cost/kWh (incl. tax) RMB 1.04~1.08/kWh 12 years period
IRR of total 8% IRR of capital fund 13.8% investment
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Seen from the table above, IRR of capital fund can be as high as 13.8%, under IRR of total investment of 8%, indicating good economy of the project. the cost/kWh of solution 1 ranges between RMB 1.04kWh and 1.08/kWh depending on whether the privilege of 50% VAT concession is enjoyed.
2) Solution 2: 3×135MW, without heat storage
Table 3-15 Indexes for Economic Assessment, Solution 2 (3×135MW, without heat storage)
Static investment RMB 5.0913 billion Annual power output 85308kWh
Annual hours of Dynamic investment RMB 5.39865 billion 2106h effective utilization
Investment payback Cost/kWh (incl. tax) RMB 0.88~0.92/kWh 12 years period
IRR of total 8% IRR of capital fund 13.8% investment
Seen from the table above, thanks to scale effect of equipment purchase, the cost/kWh of solution 2 is RMB 0.88~0.92/kWh, much lower than that of solution 1. Therefore, solution 2 has better economy.
3) Solution 3: 1×100MW, with heat storage
Table 3-16 Indexes for Economic Assessment, Solution 3 (1×100MW, with heat storage)
Static investment RMB 2.26097 billion Annual power output 28436 kWh
Annual hours of Dynamic investment RMB 2.36184 billion 2844h effective utilization
Investment payback Cost/kWh (incl. tax) RMB 1.12~1.18/kWh 12 years period
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IRR of total 8% IRR of capital fund 13.8% investment
Seen from the table above, the cost/kWh of solution 1 ranges between RMB 1.12kWh and 1.18/kWh depending on whether the privilege of 50% VAT concession is enjoyed. Compared to solution 1, thanks to the additional function of heat storage, power output is kept under different capacity of generator, and hours of effective utilization are improved a lot. Although its initial investment is increased and its cost/kWh is a little higher than that of solution 1, seen from the operation curve, the solution better matches with load and can tackle potential of power brownouts, thus is friendly to system.
4) Solution 4: 3×100MW, with heat storage
Table 3-17 Indexes for Economic Assessment, Solution 4 (3×100MW, with heat storage)
Static investment RMB 5.06796 billion Annual power output 284,36 kWh
Annual hours of Dynamic investment RMB 5.37531 billion 2844h effective utilization
Investment payback Cost/kWh (incl. tax) RMB 0.88~0.92/kWh 12 years period
IRR of total 8% IRR of capital fund 13.8% investment
Operation mode of solution 4 is identical to that of solution 3, while number of generator is increased from 1 to 3. Thanks to scale effect of purchase, the cost is much lower than cost of purchasing 3 generators one by one. Therefore, under consistent hours of generation, the cost/kWh decreases a lot. The cost/kWh of 3 sets of 100MW generators is RMB 0.88~0.92/kWh. Upon comparison between solution 4 and solution 3, scale effect is favorable to lowering cost/kWh and
80 Study of market potential of CSP in China bringing better economy. It shall be noted that although the cost/kWh of solution 4 is similar with that of solution 2, since equipped with function of heat storage, solution 4 better matches with load and has higher technical flexibility and system friendliness.
Comparison of economy among the 4 solutions is shown below.
Table 3-18 Comparison of Economy among the 4 Solutions
Solution Technical scheme Cost/kWh
1×135MW, without heat Solution 1 RMB 1.04~1.08/kWh storage
3×135MW, without heat Solution 2 RMB 0.88~0.92/kWh storage
Solution 3 1×100MW, with heat storage RMB 1.12~1.18/kWh
Solution 4 3×100MW, with heat storage RMB 0.88~0.92/kWh
(5) Sensitivity analysis
According to Table 3-12, solar energy system and generation system share highest in total investment cost. They jointly share 86.9%, and are the most critical factors for influencing project cost.
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4.27% 5.56% 1.69% 1.62% 1太阳能系统 2发电系统 3 厂址工程 22.87% 4 编制年价差
63.99% 5其他费用 6 动态费用
Table 3-23 Composition of Investment Cost of Phase 1
太阳能 Solar energy system
系统
发电系 Power generation system
统
厂址工 Site work
程
编制年 Price difference of year of
价差 preparation
其他费 Other expenses
用
动态费 Dynamic expense
用
Next to initial investment, what most influences cost/kWh is power output, which is primarily
82 Study of market potential of CSP in China influenced by annual hours of effective utilization. Therefore, hours of utilization are also a critical influencing factor. Under a consistent investment level, the cost/kWh falls with increase in hours of utilization.
Since in the analysis of economic benefit of the project, the cost/kWh of operation period and economic benefit under the cost/kWh are back-calculated under IRR of 8%, power price is not taken as sensitivity factor. Also, since IRR is fixed, the sensitivity analysis only reflects influence of sensitivity factor on generation cost. For example, sensitivity analysis on solution 3 is implemented below with annual hours of utilization and initial investment.
Table 3-19 Sensitivity Analysis on Solution 3 (1*100MW)
Variable Generation cost (incl. tax)
Initial investment + 5% RMB 1.23/kWh
Initial investment - 5% RMB 1.07/kWh
Annual hours of utilization + 5% RMB 1.12/kWh
Annual hours of utilization - 5% RMB 1.24/kWh
1) Influence of hours of utilization on cost/kWh
Seen from the table above, project cost is most sensitive to annual hours of utilization. If annual hours of utilization are improved by 5% (from 2844h to 2986h), the cost/kWh will decrease from
RMB 1.18/kWh to RMB 1.12/kWh, by rate of 5%; If annual hours of utilization are reduced by 5%
(from 2844h to 2701h), the cost/kWh will increase from RMB 1.18/kWh to RMB 1.24/kWh, by rate of 5%.
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Table 3-24 Sensitivity Analysis with Hours of Utilization
利用小时数敏感性分析 Sensitivity Analysis with Hours of Utilization
增加 5% Increase of 5%
2844 小时 2844h
减少 5% Decrease of 5%
2) Influence of initial investment on cost/kWh
Seen from the table above, another sensitivity factor for project cost is total investment. If total investment is improved by 5%, the cost/kWh will increase from RMB 1.18/kWh to 1.23/kWh, by rate of 4.2%; if total investment is reduced by 5%, the cost/kWh will decrease from RMB 1.18/kWh to 1.13/kWh, by rate of 4.2%.
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Table 3-25 Sensitivity Analysis with Initial Investment
项目总投资敏感性分析 Sensitivity Analysis with Total Investment
增加 5% Increase of 5%
项目总投资 Total investment
减少 5% Decrease of 5%
(6) Comprehensive economic assessment
Seen from the economy analysis, the project can be divided into solution with heat storage and solution without heat storage. There are 4 alternative operation modes (1*135MW without heat storage, 3*135MW without heat storage, 1*100MW with heat storage, 3*100MW with heat storage).
Upon analysis on financial indexes of the solutions, the project has better economy. However, since no CSP grid-connected price has been disseminated in the state, rate of return is calculated with investor’s IRR of 8%. After dissemination of grid-connected power price, profitability of the project
(rate of return, etc.) can be better analyzed by comparing grid-connected power price and cost/kWh.
Upon sensitivity analysis with the two key influencing factors for cost/kWh (initial investment,
85 Study of market potential of CSP in China hours of utilization), their influences on the cost/kWh can be better learned, and related measures can be taken to properly control investment, improve generation efficiency and hours of utilization, effectively reduce cost/kWh and bring optimal comprehensive economy.
As for selection from 4 alternative solutions, learned from comparison between solution with heat storage and solution without heat storage, initial investment cost of the solution with heat storage is much higher. For example, due to addition of heat storage device, total investment of solution with
1×100MW generator is improved from RMB 2.15293 billion to RMB 2.36185 billion, by rate of
10%, and the cost/kWh is improved from RMB 1.04~1.08/kWh to RMB 1.12~1.18/kWh, by rate of
10%. Considered from economy, addition of heat storage will bring higher investment cost and higher cost/kWh (c. 10% higher). Moreover, technology of heat storage hasn’t been stable in international market or conceivably verified, so that introduction of heat storage is exposed to risk.
From the above, use of heat storage device will increase risk and significantly raise cost. With specifics of the site taken into account, the use of heat storage device in Phase 1 is not recommended.
The use can be considered in Phase 2, according to operation of the project.
3.4.2 Analysis of CSP's competitiveness in Chinese power market
CSP and PV power generation are the uppermost technical paths for solar power generation. In the section, they are compared from angles of development conditions, industry development, influence on grid connection, technical economy and policy environment to analyze CSP's competitiveness in
Chinese power market.
(1) Development conditions
CSP expresses higher requirements for development conditions (light resource, terrain, water resource, etc.) than PV power generation. In CSP, only direct solar radiation is used. With a view to
86 Study of market potential of CSP in China light condensing, CSP requires flat ground and gentle slope. Since principles of CSP are similar with those of thermal power generation, cooling water is demanded by quantity. Introduction of air cooling will increase investment and lower new power output. In comparison, in PV power generation, total solar radiation that includes DNI and diffuse radiation can be used. Thanks to its modular structure, PV power generation expresses lower requirements for terrain. No cooling water is needed during PV power generation, development of which thus is not restricted by water resource.
(2) Industry development
Technology of PV power generation is mature, and has entered large-scale industrialization, while
CSP is on start-up phase of industrialization.
Seen from PV power generation industry chain, a complete industry system that covers material, PV module, inverter and supporting service has been formed in China, and restriction of material has been preliminarily released. Over 2012, China’s outputs of polysilicon and PV module are 71000t and 23GW, sharing 30% and 62% in the global total outputs respectively. As for technical force, technologies of PV cell production, PV module production, polysilicon preparation and waste recycling owned by China’s enterprises are leading in the world. In PV power generation industry, excellent enterprises above designated size have grown up and are in continuous expansion. Under leading by them, China’s PV has been a competitive and leading industry in the world.
Seen from CSP industry chain, steel, glass, solar heat collection tube and turbine generator in China are all supported by good foundation. Key equipment for CSP (e.g. high-temperature vacuum heat collector and slot-type condenser for slot-type station, heat absorber and heliostat for mast-type station) are producible in China, and heat transfer oil and heat storage molten salt that depended on import have been produced by domestic enterprise recently. On the whole, most materials and
87 Study of market potential of CSP in China components necessary for CSP can be produced at home. However, since there are few CSP stations above designated size, performance and reliability of product haven’t been verified in project. As a result, scale production and technological improvement can’t be driven, and integration and control of CSP station system are a gap in China.
In the future, with building of demonstrative CSP project, development and operation of commercial CSP stations and enhanced investment in CSP equipment by more and more enterprises, upstream and downstream of CSP industry chain and associated quality assurance system will be gradually perfected.
(3) Influence of grid connection
In case of being equipped with heat storage devices, CSP shares high load tracking capacity, superior performance than PV power generation and less adverse impact on safe and stable operation of power system.
PV power output is featured with noticeable intermittency and uncertainty; weather changes will result in substantial fluctuation of the output in the daytime, while it fails to work in cloudy and rainy days as well as in the nighttime. Therefore, the confidence coefficient of PV power station capacity is low, grid-connected PV power generation on a large scale imposes higher requirements to power system planning, and is possible to increase equivalent load difference between peak and valley and difficulty in power grid peak shaving. In addition, due to grid connection of PV power generation realized by power electronic equipments, it’s likely to cause harmonic wave and other power quality problems. On account of absence of rotational inertia and damping characteristics of conventional power, it also imposes adverse impact to stable operation of power system.
CSP station can be compatible with high-capacity heat storage devices with relatively sophisticated technology to accomplish smooth, steady and controllable output of generated power. Under the
88 Study of market potential of CSP in China condition of strong sunlight in the daytime, the CSP station will store the redundant heat to avoid output exceeding power grid demand. Under the condition of sunlight reduction in cloudy weather, the heat accumulation in heat storage devices will be utilized in time to guarantee stable operation of generated power. When sunlight intensity wears off, it’s applicable to replenish heat to steam turbine in time to extend stable operation time of power station.
Additionally, CSP is applicable to make combined operation with gas power generation, biomass power generation and etc, to realize uninterruptible power supply in all weather. As a whole, the mode of “CSP + high-capacity heat accumulation” or combined operation with gas power generation furnishes CSP with high operation flexibility, excellent adjustability and feature of friendliness to power system; under the circumstance of scale development, large-scale CSP station will not only be taken as peak-shaving power source to provide auxiliary service for wind power and other intermittent power sources, but also be able to sustain the basic load of power system possibly with the optimization and promotion of future technology. Solar thermal power station employs grid connection of conventional units, which is featured with unit inertia and applicable for adjusting active and reactive outputs in line with instructions of power grid dispatching institution; in addition, it shares comparatively mature operation technology and managerial experience, so it can boost stable operation of power system.
(4) Economy of power generation
Currently, investment cost and cost/kWh on unit installed capacity of CSP are all higher than those of PV power generation. In recent years, influenced by technical progress, supply-demand pattern and other multiple factors, the price of polysilicon and solar module go down constantly. Up to the first half year of 2013, the first price of polysilicon is about RMB 120/kg, the price of solar module is about RMB 4.5/W, unit initial investment of ground PV power station about RMB 9,000～
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10,000/kW, cost/kWh about RMB 0.75～1.0, unit initial investment of distributed PV power system about RMB 9,000～11,000/kW and the cost/kWh about RMB 0.8～1.2 domestically. At present, most of domestic CSP stations remain in the demonstration and test stages, there is little price information for reference. In accordance with measurement and calculation of technological economy of typical CSP stations in western China, the unit initial investment cost is about RMB
12,000～15,000/kW and cost/ kWh about RMB 0.9～1.2.
With the expansion of industry scale and gradual improvement of supporting industry chain, the CSP shares superior potential of cost/ kWh reduction than that of PV in the future. Based on the GTM’s forecast about initial investment cost of CSP and PV from 2010 to 2020, up to 2015, the initial investment cost/kWh of mast-type power station with heat storage will be lower than that of slot-type power station without heat storage, and the initial investment cost/kWh of mast-type power station without heat storage will be lower than that of monocrystalline silicon PV station; up to 2020, the basic trend will remain the same, but the CSP station will share increased competitiveness in cost,
compared with PV station.
Fig. 3-26 Future Trend of Initial Investment Cost of PV and CSP
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Data source: GTM research, 2009
In respect of cost/kWh, up to 2015, except for slot-type CSP station without heat storage, the cost/ kWh of PV station and mast-type CSP station will be lower than that of gas power generation, the generation cost of mast-type station without heat storage will be lower than that of PV station and the cost/ kWh of mast-type station with heat storage will be minimized. Up to 2020, the cost/ kWh of
PV and CSP station will be lower than that of gas power generation and the two share preferable
competitiveness; compared with PV, CSP will share more prominent advantage on cost/ kWh.
Fig. 3-27 Future Competitiveness Trend of CSP Cost/ kWh Data source: GTM research, 2009
According to the prediction of IEA study, the CSP cost/ kWh will reach USD 100 per MWh with intermediate load competitiveness from 2015 to 2020, and fall to USD 50 per MWh with base load competitiveness from 2020 to 2030.
Additionally, considering the CSP station with heat storage is featured with improving output curve and better compatibility with load, thanks to the TOU (time-of-use power price) policy, its competitive advantage with PV will be more highlighted. Taking 1×100MW CSP station with heat storage as example, assuming that the uniform grid-connected power price is RMB 1.0/kWh and annual power output 284.36 GWh, the annual income from power price is about RMB 0.28 billion.
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In case of implementing TOU policy, the grid-connected power price will be increased by 20% at the evening peak periods from 7:00 pm to 9:00 pm, namely RMB 1.20/kWh. Compared with PV station, thanks to being equipped with heat storage devices, CSP can use heat storage to generate power at the evening peak periods from 7:00 pm to 9:00 pm with the power output charged by power price at peak periods accounting for 20% of the total power output; under the condition of implementing
TOU policy, the annual earnings of power price at peak periods that heat storage produces is about
RMB 11.37 million; that is, under the circumstance of implementing TOU policy, thanks to heat storage solution, the annual earnings will be increased with about RMB 11.37 million , compared with absence of TOU policy. It can be seen that the CSP competitiveness will be promoted under the condition of implementing TOU policy.
(5) Policy environment
China’s supportive policy to PV power generation is integrated comparatively, but it’s not clear to
CSP.
In recent years, our domestic PV industry develops rapidly and has become a strategic emerging industry with international competitive advantage. Under the circumstance of slowdown in global
PV market demand growth and increase in export resistance, China has issued a series of policies in related to subsidy for power price, preferential taxation, credit financing, land-supply mode and other aspects to provide strong support for PV industry development, so as to expand domestic application market and transform excessive reliance on export, huge overcapacity and other problems.
In 2012, China had launched successively New Energy Demonstration Cities and Industrial Parks (to build 100 new energy demonstration cities by 2015), Large-Scale Application Demonstration Plots of Distributed PV Power Generation (total scale of 15GW), two groups of Golden Sun
92 Study of market potential of CSP in China demonstration project (total scale of 4.54 GW) and other projects. In July 2013, the State Council issued the Several Opinions on Promoting the Healthy Development of PV Industry to enhance the planning objective of PV development in the 12th Five-Year Plan from the former 20GW to 35GW and propose to vigorously exploit distributed PV market, so as to push forward PV station construction in good order, consolidate and expand international market. After that, the Ministry of
Finance issued the Notification on Implementing Power Output Subsidy Policies for Distributed PV
Power Generation and Other Related Issues to specify that distributed PV projects are in line with measures for the implementation of power output subsidy and the subsidy management modes for
PV stations are regulated. In addition, the National Development and Reform Commission (NDRC) printed and issued the Provisional Regulations on Management of Distributed Generation to exempt permission for power generation business of various distributed generation projects, including distributed PV power generation, and to request power grid enterprises to simplify grid-connected procedure for distributed generation stations that get access to 35 KV and below. In Aug 2013, the
NDRC issued the adjusted benchmarking grid-connected power price for PV station and divided the whole country into three classes of solar energy resource areas with grid-connected power prices of
RMB 0.9/kWh, 0.95/kWh and 1.0/kWh respectively. The distributed PV power generation stations are entitled to accept overall subsidy of power output with the standard of RMB 0.42/kWh,
However, as for CSP projects, the current domestic supportive fund investment mainly focuses on basic theory and key technology research field. In the National Program for Medium- and Long-term
Scientific and Technological Development issued in 2006, the solar thermal power generation technology has been classified as key R&D technology. In the Catalogue for Guiding Industrial
Restructuring issued in 2011, “Solar Thermal Power Generation and Collection System” and
“Technology Development and Equipment Manufacture of Utilizing Solar Power Medium and High
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Temperature” have been classified as the encouraged projects. The Ministry of Science and
Technology and National Natural Science Foundation of China rank solar thermal power generation study as the preferential funding fields and have approved multiple “973” and “863” research projects to provide financial support. In respect of equipment manufacture and power station construction and operation, China fails to establish specific policies about CSP or to issue CSP benchmarking grid-connected power price.
In the future, China’s supportive polices for CSP development will be deepened. In reference to policy mode of photovoltaic power generation, the government is possible to establish development policies for CSP from the perspectives of market access, tax preference (half collection of added-value tax) , grid-connected power price, credit and loan support and land support policy in the future, the policy environment for CSP development will be improved continuously.
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4. Analysis of running positions and market prospects of CSP in western China
4.1 Overview of power system in western China
4.1.1 Power supply
The power generation installation in northwestern China is dominated by thermal power, most of which is coal power. At the end of 2012, the total installed capacity of power generation of five provinces (Shaanxi, Qinghai, Gansu, Ningxia and Xinjiang) in northwestern China is 116.57GW, including 76.77GW of thermal power, 25.38GW of hydropower, 11.95GW of wind power and
2.48GW of PV power, accounting for 65.9%, 21.8%, 10.3% and 2.1%, respectively.
2500 2227 2029 2000 1640 1551 1500 1101 1000 730 597 414 500 316 250 230 265 136 15 2 2 38 43 53 18 0 陕西 青海 甘肃 宁夏 新疆
火电 水电 风电 太阳能发电
陕西 Shaanxi
青海 Qinghai
甘肃 Gansu
宁夏 Ningxia
新疆 Xinjiang
火电 Thermal power
水电 Hydropower
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风电 Wind power
太阳能发电 Solar power
Fig. 4-1 Installed Structure of Power Generation in Northwestern China
Data source: China Electricity Council, Statistics Express of China Electric Power Industry in 2012
From the perspective of each province, thermal power plays an absolute dominant role in Shaanxi,
Ningxia and Xinjiang with the proportion of 89.3%, 82.0% and 73.0%, respectively. Thermal power and hydropower account for 53.2% and 25.0% in Gansu Province. Qinghai is the only one province dominated by hydropower in northwestern China, with hydropower and thermal power accounting for 74.9% and 15.6%, respectively. The northwestern China is rich in renewable energy resources. In recent years, wind power in Gansu and PV in Qinghai have developed rapidly. The proportion of wind power in Gansu and PV in Qinghai in provincial installed power capacity reaches 20.5% and
9.3%, respectively.
In 2012, the annual generating capacity in northwestern China was 507.7 billion KWh with year-on-year growth of 9.9%. Shaanxi, Gansu, Ningxia and Xinjiang share almost the same annual power output, while Qinghai is least in annual power output. In respect of generating capacity structure, the proportion of thermal power in Shaanxi and Ningxia exceeds 90% in gross generating capacity, while Xinxiang is approximate to 85%; the proportion of thermal power, hydropower and wind power in Gansu is 60.2%, 31.1% and 8.5% in gross capacity, respectively; the proportion of hydropower, thermal power and PV power in Qinghai is 77.4%, 20.3% and 2.5% in gross capacity, respectively.
Table 4-1 Generating Capacity and Composition in Northwestern China in 2012 Unit: 100GWh
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Thermal Province Hydropower Wind Power Solar Power Subtotal Power Shaanxi 1149 81 3 0.3 1233 Qinghai 120 458 0.2 14.5 592 Gansu 666 344 94 3.1 1107 Ningxia 952 19 38 7.8 1017 Xinjiang 954 133 40 0.1 1128 Total 3840 1036 175 25.8 5077
Data source: China Electricity Council, Statistics Express of China Electric Power Industry in 2012
4.1.2 Power grid
The northwestern power grid is identified as the largest power grid in the six cross-region domestic power grids, with power supply area up to 3.1138 million square kilometers, accounting for about
1/3 of China’s land area. The northwestern power grid has covered most areas that are fairly developed economically in the above five provinces and regions with the maximum voltage class of
750kv currently. The voltage class of main power grid in Shaanxi, Gansu, Qinghai and Ningxia is
330kv, while that in Xinjiang is 220kv. Additionally, 220kv power grid still exists in Hanzhong of
Shaanxi, Lanzhou and Baixin of Gansu and north central regions of Ningxia. The northwestern power grid is connected with Central China Power Grid through Lingbao back-to-back HVDC system and ±500kv HVDC system from Baoji, Shaanxi Province to Deyang, Sichuan Province, and connected with North China Power Grid through Ningdong-Qingdao ±660 kv HVDC system, as well as connected with Tibet power grid through Qinghai-Tibet HVDC system.
At the end of 2011, the power grid system of five provinces and regions in northwestern China has coordinated 131.94 million KVA of 330 kv and above step-down power transformation capacity, including 53.2 million KVA of 750kv transformer capacity and 78.74 million KVA of 330kv step-down power transformation capacity. The length of 330kv and above transmission lines in northwestern power grid is 32,268 km, including 10,130km of 750kv transmission line and 22,138
97 Study of market potential of CSP in China km of 330kv transmission line.
4.1.3 Power consumption
Influenced by low temperature in winter in northwestern China, heating load is relatively larger, so the peak power load of northwestern power grid occurs in winter in general. The maximum load of northwestern power grid occurred on Dec 19, 2012 and reached 56.27GW with year-on-year growth of 17.4%; and the minimum load was 36.79GW, which occurred on Jan 24.
1200 1067 1091 982 995 1000 923 859 839 804 800 742 725 662 602 600 561 547
465 亿千瓦时 400
200
0 陕西 甘肃 青海 宁夏 新疆
2012年 2011年 2010年
亿千 100
瓦时 GWh
陕西 Sha
anxi
甘肃 Gan
su
青海 Qin
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ghai
宁夏 Nin
gxia
新疆 Xin
jiang
2012 201
年 2
2011 201
年 1
2010 201
年 0
Fig. 4-2: Total Social Power Consumption in Northwestern China
Data source: China Electricity Council, Statistics Express of China Electric Power Industry in 2012
The northwestern China is the area with fastest growth of power consumption domestically. In 2012, the total power consumption in northwestern China was 449.6 billion KWh with year-on-year growth of 11.6%, which is 6.1% higher than the national average. The total power consumption in northwestern China is as shown in Fig. 4-2.
4.2 Analysis of power demand and development forecast in northwestern China in 2020
4.2.1 Power demand
In accordance with the SGERI’s prediction result1 of power demand of northwestern power grid, it’s predicted that the annual total power consumption of northwestern power grid will reach 56.29
99 Study of market potential of CSP in China billion KWh by 2015 and 85.35 billion KWh by 2020. The average annual growth rate will be 11.2% in the 12th Five-Year Plan and 8.7% in the 13th Five-Year Plan. The maximum power load of northwestern power grid will reach 86GW by 2015 and 126.9GW by 2020. The average annual growth rate will be 11.2% in the 12th Five-Year Plan and 8.1% in the 13th Five-Year Plan.
Table 4-2: Forecast of total power consumption (Unit: 100GWh)
Total power consumption Growth rate Region 2010 2015 2020 12th Five-Year Plan 13th Five-Year Plan
Northwestern China 3316 5629 8535 11.2% 8.7%
Shaanxi 853 1319 1733 9.1% 5.6%
Gansu 803 1182 1661 8.0% 7.0%
Qinghai 465 719 1065 9.1% 8.2%
Ningxia 547 876 1199 9.9% 6.5%
Xinjiang 648 1533 2877 18.8% 13.4%
Data source: SGERI, Study on Large-Scale Development and Market Consumption of Solar Power
Generation in Dec 2012.
Table 4-3: Forecast of power load of northwestern power grid (Unit: 10,000 KW)
Power load Growth rate Region 2010 2015 2020 12th Five-Year Plan 13th Five-Year Plan
Northwestern China 5050 8600 12690 11.2% 8.1%
Shaanxi 1490 2326 2985 9.3% 5.1%
Gansu 1239 1938 2586 9.4% 5.9%
Qinghai 603 1052 1546 11.8% 8.0%
Ningxia 848 1423 1839 10.9% 5.3%
Xinjiang 1120 2613 4835 18.5% 13.1%
Data source: SGERI, Study on Large-Scale Development and Market Consumption of Solar Power
Generation in Dec 2012.
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4.2.2 Analysis of load features
(1) Annual load features
1.00
0.95
0.90
0.85
0.80
0.75
0.70 1月 2月 3月 4月 5月 6月 7月 8月 9月 10月 11月 12月
1 Janua
月 ry
2 Febr
月 uary
3 Marc
月 h
4 April
月
5 May
月
6 June
月
7 July
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月
8 Augu
月 st
9 Septe
月 mber
1 Octo
0 月 ber
1 Nove
1 月 mber
1 Dece
2 月 mber
Fig. 4-3 Characteristic Curve of Annual Power Load in Northwestern China
In recent years, the power load in northwestern China grows fast. Wherein power consumption of high energy-consuming industry is the dominant factor to boost growth of total power consumption, and power consumption of the secondary industry accounts for about 80% of total power consumption. With the rapid development of national economy in northwestern China and continual improvement of living standard, the proportion of the tertiary industry and household power consumption will increase gradually; however, due to the proportion in total load is less, there is little impact on load feature. Considering the influence of industrial restructuring and optimizing and other factors, the power load rate in northwestern China will show a downward trend in the future, but with small reduction. The predicted characteristic curve of annual power load in northwestern
China by 2020 is as shown in Fig. 4-3.
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It can be seen from the characteristic curve of annual power load, the maximum power load of northwestern power grid occurs in December and the minimum one occurs in February, while the minimum load in summer occurs in September.
(2) Daily load features
With the gradual increase of power consumption proportion of the tertiary industry, the difference between peak and valley of northwestern power grid will be increased further; however, considering that the power consumption proportion of secondary industry is far bigger than that of other industries in northwestern China, the increase degree of difference between peak and valley will be limited. The characteristic curves of power load in northwestern China in typical days in summer and winter based on the prediction of power demand and power consumption structure of northwestern China in the future are as shown in Fig. 4-4 and 4-5.
1.00
0.95
0.90
0.85
0.80
0.75
0.70 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Fig. 4-4 Characteristic Curve of Power Load in Northwestern China in Typical Days in Summer
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1.00
0.95
0.90
0.85
0.80
0.75
0.70 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Fig. 4-5 Characteristic Curve of Power Load in Northwestern China in Typical Days in Winter
From the analysis of load change in northwestern China in a day on the basis of typical daily power load feature demand, it can be seen that the typical days in northwestern China in summer and winter all produce two peaks, namely morning peak and evening peak, and evening peak shares the maximum load. In typical days of summer, γ (average daily load / maximum load) value is 0.912 and
β (minimum load / maximum load) value 0.766, the maximum load occurs at 9:00 pm. In typical days of winter, γ (average daily load / maximum load) value is 0.893 and β (minimum load / maximum load) value 0.774, the maximum load occurs at 8:00 pm.
4.2.3 Forecast of installed capacity
In accordance with the national power development planning and adjustment of development planning of renewable energy sources, it’s predicted that the installed capacity structure in western
China by 2015 and 2020 are as shown in Table 4-4. Table 4-4 Forecast of Future Installed Capacity Structure in Western China
Region 2015 (10,000 KW) 2020 (10,000 KW)
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Sol Wi Thermal Hydrop Wind ar Subt Thermal Hydrop nd Solar Subt power ower power po otal power ower po power otal wer wer
Northwester 140 1991 570 3773 12684 2985 2842 23996 3742 4300 n China 5 6 0 8
Shaanxi 3628 330 201 150 4309 5325 388 713 520 6946
Gansu 219 1569 901 1143 360 3973 4291 918 1027 8427 1
Qinghai 680 1182 100 470 2432 1038 1581 267 1320 4206
Ningxia 2701 42 398 120 3261 3756 42 696 420 4914
Xinjiang 183 1324 4106 530 1000 305 5941 9586 813 1013 3 5
By 2015, the total installed capacity in northwestern China will reach 199 GW, including 64.0% of thermal power, 15.1% of hydropower, 14.3% of wind power and 6.6% of solar power; by 2020, the total installed capacity in northwestern China will reach 377GW, including 64.1% of thermal power,
10.0% of hydropower, 15.2% of wind power and 10.7% of solar power.
4.2.4 Outlook for grid development
Taking full consideration of the demand of integrative optimization and operation of power system, the following basic principles will be prioritized for planning of main grid structure in northwestern
China:
(1) Meet regional power load demand and requirement of power output by large-scale power supply, strengthen main grid structure of 750kv power grid in northwestern China and optimize
330kv (220kv) power grid;
(2) Take full consideration of demand of inter-provincial power exchange in northwestern
China and meet the demand of optimizing resource allocation;
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(3) Pay high attention to randomness and intermittency of tens of millions of kw wind power bases in Hami and Jiuquan, large-scale PV power stations in Haixi and Hexi Corridor, and other new energy power sources, and meet the demand of new energy power consumption and peak shaving in northwestern China;
(4) Actively promote the development and construction of Shanbei, Binchang, Jiuquan,
Longdong, Ningdong, Hami, Zhundong, Yili and other large-scale energy bases, implement
West-East Power Transmission strategy, construct strong power grid in northwestern China and accomplish resource optimization allocation in wider scope.
The northwestern China is considered as the important power-generation energy base domestically, which will output the power to 13 developed provinces and cities including Beijing, Tianjin, Hebei,
Shandong, four provinces in middle-east China and east China. In line with power transmission planning, the northwestern China will transmit power outward by means of 500kV/1000kV HVAC point to grid, ±500/±660/±800/±1100 HVDC and HVDC back-to-back, etc. The power transmission capacity in northwestern China is predicted to reach 65.41GW by 2015 and 112.91GW by 2020, as shown in Table 4-5.
Table 4-4 Planned Transmission Capacity of Power Output Channel in northwestern China
Unit: 10,000 KW
Transmission form 2015 2020
Point to grid transmission (AC) 960 2600 Grid to grid transmission (DC) 5581 8691 Total 6541 11291
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4.3 Analysis of running positions and prospects of CSP in the power system of northwestern
China
In order to find out running positions of CSP in the power system of northwestern China, it’s planned to adopt production simulation method to make analysis of system operation conditions, namely, under the given loading conditions and installed capacity structure, the typical periods are selected to make simulation analysis of new energy grid-connected operation conditions and optimization market at generation side, so as to make power system absorb the power generated by new energy to the maximum extent and to reduce abandoning wind and sunlight through optimizing start-up mode of generator units and their timing sequence curve of power generation. The study level year is 2020 based on balance analysis of real-time power, without consideration of limitation of grid structure.
4.3.1 Main boundary conditions
(1) Hydropower output features
In 2011, the hydropower regulation capacity in northwestern China is 8-10.4 GW, accounting for
34%-44% of hydropower installed capacity. In respect of hydropower planning project, the installed capacity of hydropower station to be put into production will be very limited in the future four years of the 12th Five-Year Plan, with poor regulation capacity, and most of them are run-of-river hydropower station or daily regulation hydropower station. The hydropower regulation capacity will be 10.7-12.6GW by 2020, accounting for 29%-34% of hydropower installed capacity. Hydropower regulation capacity in northwestern China is as shown in Table 4-5. Table 4-5 Hydropower Regulation Capacity in Northwestern China
Unit: 10,000 KW
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2015 2020 Region Wet Season Dry Season Wet Season Dry Season Predicted output 2750 1682 3260 1959 Forced output 1653 749 1994 888
(2) Thermal power output features
Based on the analysis of thermal power development planning in all provinces and regions in northwestern China and regulation capacity of all kinds of units, taking comprehensive consideration of the minimum technology output and economic operation of thermal power generating units and other factors, the peak-shaving depths of 0.6GW and above, 0.3-0.6GW (excl. 0.6GW) and
0.1-0.3GW (excl. 0.3 GW) of conventional coal powers are considered as 50%, 40% and 30%, respectively; the peak-shaving depth of heating unit during heating period is considered as 15%.
(3) Wind power output features
The wind energy resources in northwestern China are mainly distributed in Xinjiang and Jiuquan,
Gansu. Based on wind measurement data in southeast wind area in Hami, Santanghu wind area,
Naomaohu wind area and Gansu Jiuquan wind area, the wind power in northwestern China is featured with “strong wind in the nighttime and weak wind in the daytime” typically. In summer, the maximum output of wind power occurs at 0:00-3:00 am and the minimum output at about 8:00 am; in winter, the maximum output of wind power occurs at 0:00-3:00 am and the minimum output at
11:00 am-1:00 pm, as shown in Fig. 4-6.
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0.35
0.33
0.31
0.29
0.27
0.25
0.23
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0.19
0.17
0.15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 夏季 冬季
夏 Su
季 mmer
冬 Wi
季 nter
Fig. 4-6 Chart eristic Curve of Typical Daily Output of Wind Power in Northwestern China
(4) Solar power output features
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1
0.9
0.8
0.7
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0.1
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 光伏 光热（无储热） 光热（2小时储热）
Fig. 4-7 Characteristic Curve of Typical Daily (Sunny Day) Output of Solar Power in
Northwestern China
光伏 PV
光热（无储热） CSP (without heat
storage)
光热（2 小时储 CSP (2h heat storage)
热）
In sunny weather, the form of PV power output in northwestern China is similar to half-sinusoid curve, the output time is concentrated from 7:00 am to 7:00 pm, and the maximum output occurs at
1:00 pm.
Based on analysis of measurement data of DNI in Delhi, Qinghai, in sunny weather, the CSP output time in northwestern China is concentrated during 10:00 am and 7:00 pm, and the maximum output
110 Study of market potential of CSP in China occurs at about 2:00 pm. In case that heat storage devices are installed, then the output time can be extended to about 8:00 pm in evening peak period.
Characteristic curve of typical daily (sunny day) output of solar power in northwestern China is as shown in Fig. 4-7.
(5) Regulation capacity of power transmission lines
The main means of outward transmission of power in northwestern China results from the big difference between peak and valley among power systems in different regions. With the constant increase of power transmission scale, if the outside power doesn’t involve in peak-shaving, the peak-shaving difficulty of receiving-end areas will increase, which are adverse to safe and stable operation of system. With the expansion of power scale outward transmitted from large-scale energy bases, the power should, based on the demand of receiving end, involve in peak-shaving of receiving-end power grid. In addition, in order to reduce the cost of remote power transmission, it’s necessary to improve the utilization efficiency of transmission line and increase utilization time of transmission line as much as possible; therefore, as for direct-current transmission, the outward transmitted power should involve in peak-shaving of receiving-end power grid based on 10% of rated power, that is, the power transmission capacity of DC transmission line in load valley of receiving-end power grid (from 0:00 am to 8:00 am) is considered as 90% of rated power.
(6) Stand-by power
In the balance analysis of real-time power, the standby power is 3% of the maximum system load on that day and no less than the maximum unit capacity in the system.
4.3.2 Running positions of CSP
Under preset boundary conditions, simulation analysis is made according to the running conditions
111 Study of market potential of CSP in China on typical days in summer and winter of 2020.
(1) Running position on typical days in winter
25000 25000
20000 20000 弃光伏 弃风 弃光热 15000 15000 接纳光热 接纳光伏
接纳风电 万千瓦 可调火电 10000 10000 火电最低 可调水电 强迫水电 5000 5000 负荷
0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
弃光伏 PV free
弃风 Wind free
弃光热 CSP free
接纳光热 With CSP
接纳光伏 With PV
接纳风电 With wind
可调火电 Adjustable thermal
火电最低 Lowest thermal
可调水电 Adjustable hydropower
强迫水电 Compelled hydropower
负荷 Load
万千瓦 10,000kW
112 Study of market potential of CSP in China
Fig. 4-8 Running Positions of Various Power Supplies of Northwest Power Grid on Typical
Days in Winter (CSP station without heat storage)
25000 25000
20000 20000 弃光伏 弃风 弃光热 15000 15000 接纳光热 接纳光伏
接纳风电 万千瓦 可调火电 10000 10000 火电最低 可调水电 强迫水电 5000 5000 负荷
0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
弃光伏 PV free
弃风 Wind free
弃光热 CSP free
接纳光热 With CSP
接纳光伏 With PV
接纳风电 With wind
可调火电 Adjustable thermal
火电最低 Lowest thermal
可调水电 Adjustable hydropower
强迫水电 Compelled hydropower
负荷 Load
万千瓦 10,000kW
113 Study of market potential of CSP in China
Fig. 4-9 Running Positions of Various Power Supplies of Northwest Power Grid on Typical
Days in Winter (CSP station with 2h heat storage)
Fig. 4-8 and Fig. 4-9 simulate the running positions of various power supplies of Northwest Power
Grid on Typical Days in winter of 2020. They show that, power load is heavy in Northwest China in winter, consumption demand is high, solar energy and wind won’t be abandoned, and all CSP output can be consumed.
（2）Running positions on typical days in summer
22000 22000
20000 20000
18000 18000 弃光伏 16000 16000 弃风 弃光热 14000 14000 接纳光热 12000 12000 接纳光伏 接纳风电
万千瓦 10000 10000 可调火电 8000 8000 火电最低 可调水电 6000 6000 强迫水电
4000 4000 负荷
2000 2000
0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
弃光伏 PV free
弃风 Wind free
弃光热 CSP free
接纳光热 With CSP
接纳光伏 With PV
114 Study of market potential of CSP in China
接纳风电 With wind
可调火电 Adjustable thermal
火电最低 Lowest thermal
可调水电 Adjustable hydropower
强迫水电 Compelled hydropower
负荷 Load
万千瓦 10,000kW
Fig. 4-10 Running Positions of Various Power Supplies of Northwest Power Grid on
Typical Days in Summer (CSP station without heat storage)
22000 22000
20000 20000
18000 18000 弃光伏 16000 16000 弃风 弃光热 14000 14000 接纳光热 12000 12000 接纳光伏 接纳风电
万千瓦 10000 10000 可调火电 8000 8000 火电最低 可调水电 6000 6000 强迫水电
4000 4000 负荷
2000 2000
0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
弃光伏 PV free
弃风 Wind free
弃光热 CSP free
接纳光热 With CSP
接纳光伏 With PV
115 Study of market potential of CSP in China
接纳风电 With wind
可调火电 Adjustable thermal
火电最低 Lowest thermal
可调水电 Adjustable hydropower
强迫水电 Compelled hydropower
负荷 Load
万千瓦 10,000kW
Fig. 4-11 Running Positions of Various Power Supplies of Northwest Power Grid on
Typical Days in Summer (CSP station with 2h heat storage)
Fig. 4-10 and Fig. 4-11 simulate the running positions of various power supplies of Northwest Power
Grid on Typical Days in summer of 2020. They show that, from 0:00 a.m. to 6:00 a.m., heavy use of wind and lowest hydropower and thermal power output can’t meet wind power demand, so wind is abandoned; from 9:00 a.m. to 6:00 p.m., if PV and CSP are put into heavy use, solar energy will be abandoned because of insufficient system peak-shaving capability from 11:00 a.m. to 3:00 p.m. As of 6:00 p.m., PV power output and CSP (without heat storage) output gradually decrease to zero, hydropower increases, meanwhile, thermal power also plays a role in peak shaving to some extent.
For CSP station with heat storage, solar energy is also abandoned because of heavy use of PV and
CSP from 11:00 a.m. to 3:00 p.m. However, thanks to heat storage device, CSP output can last till to evening peak period (around 8:00 p.m.), further, increase the CSP utilization hours.
4.3.3 Prospects of CSP in northwestern China
Currently solar energy development is dominated by PV in Northwest China. By Aug 2013, the installed capacity of grid-connected PV power generation in Northwest China had reached 4.67GW,
116 Study of market potential of CSP in China accounting for 70% in national gross installed capacity of PV power generation. In recent years, solar power generation has been also problematic while quickly expanding in its scale.
I. Development goal rises continuously and lays huge pressure on supporting construction. In order to increase investment and propel economic development, local governments impulsively expand the scale of solar power generation. Take Qinghai Province as an example, its provincial development plan for the “12th Five-year” Plan Period issued early 2011 sets up the installed capacity of power generation by new energy up to 2 million by 2015 as development goal, especially installed capacity of PV power generation was raised to 4.13GW early 2012. With the rise of goal in national PV plan,
PV development goals of Qinghai and other places in Northwest China will further rise according to forecast. Frequent adjustments make the market more uncertain, and increase the difficulty in construction of supporting facilities.
II. Insufficient transmission capacity of power grid is more and more serious. It takes only 6 to 9 months as of approval to build up and put into operation a 20,000kW PV power station, but a power grid project is usually approved after a long time as of proposal. For example, it takes over 2 years to get approval for and build up a 330kv power grid project. In recent years, with the rapid development of PV power stations in Northwest China, insufficient transmission capacity of power grid is more and more serious. Especially around noon when PV power generation is concentrated, serious solar energy abandon may occur.
III. Large scale PV power grid-connection has an adverse effect on system operation. In Northwest
China, most PV power stations are concentrated at terminal power grids with weak grid frame and small load base. PV power output, characterized by intermittent, fluctuant and so on, is prone to causing large range reversion, overvoltage and others to reactive power flow, making system reactive power balance and voltage control more difficult and hiding danger for safe and stable system
117 Study of market potential of CSP in China operation.
With heat storage device, CSP can overcome unstable and discontinuous output of PV power generation, suitable for large scale grid-connected power generation. It’s very necessary to develop
CSP stations in certain scale in Northwest China in respect of no matter enlarging the scale of solar power generation or meeting the need of construction and operation of power system.
I. To start and cultivate CSP market and enlarge the scale of solar power generation in Northwest
China. Through the construction of CSP demonstration project in Northwest China, existing CSP technologies can be verified and perfected, and experiences can be accumulated for the design, construction, operation and maintenance of large capacity commercialized projects in the future.
Meanwhile, other solar power generation modes can be explored beyond PV power generation, technical routes can be enriched, diversified technical options can be provided, and the scale of solar power generation can be further enlarged in Northwest China.
II. To relieve the pressure on system peak adjustment and transmission. CSP can, via heat storage device, convert solar energy in day peak time into heat for power generation at night. This can relieve the peak adjustment pressure caused to the system by large scale solar power generation, reduce solar energy abandon, meanwhile, increase the utilization rate of transmission line and the economic benefits of power grid construction.
III. Favorable for stable system operation. Slightly restricted by climate conditions, CSP station with heat storage can still keep outputting in a cloudy or rainy day and avoid significant fluctuation in output upon weather change, so its power generation stability is superior to that of PV, wind or other renewable energy resources. Such power station adopts conventional generator with inertia, meanwhile, it can be conveniently compatible with traditional thermal generators, and form a mixed generator with good dispatchability to guarantee safe and stable system operation.
118 Study of market potential of CSP in China
Upon the integrated analysis of problems of solar energy development and necessity of CSP, CSP has a very broad prospect in Northwest China.
119 Study of market potential of CSP in China
5. Study of operational mode and incentive policies for CSP stations in China
5.1 Operational mode and incentive policies for CSP stations overseas
5.1.1 Overview
(1) America
By late 2011, America had had CSP stations in operation of 479.46MW, ones under construction of
1,347MW and ones being planned of 32,229.8MW. As to capacity, among CSP stations in operation, slot type accounts for 97.6%, while others include mast type, disc type and Fresnel type; among CSP stations under construction, mast type accounts for 73.6%, while slot type accounts for 26.4%; among CSP stations being planned, slot type accounts for 66.7%, mast type accounts for 22.5%, disc type accounts for 9.6%, and Fresnel type accounts for 1.2%. Conditions of American CSP stations in
2011 are shown in Table 5-1.
By Oct 30, 2012, 2/3 of total quantities of work of 3 Ivanpah mast-type CSP stations developed by
Brightsource Energy Company had been finished. Light field system of 1# Station was installed and being commissioned; for 2# Station, heliostats were being installed, over 56,000 sets of supports and
28,000 sets of heliostat systems were installed; for 3# Station, over 10,000 sets of supports and fewer heliostat systems were installed. The project’s installed capacity is 392MW. According to estimate, it would be completed in 2013. After completion, it would double American gross installed capacity of
CSP. Seventy-five percent (75%) of Solana CSP Station developed by Abengoa had been finished, and the 280MW station would be put into operation in the summer of 2013 according to estimate.
According to estimate, among other CSP stations under construction, 125MW Genesis Solar Energy
Project-1 and 110MW Crescent Dunes Solar Energy Project would be put into operation in 2013;
500MW Palen Solar and 280MW Abengoa Mojave Solar in 2014; 200MW Saguache and 250MW
120 Study of market potential of CSP in China
Rio Mesa 1 in 2015; 400MW Siberia 1 & 2 in 2016; 200MW Sonoran West in 2017.
(2) Spain
By late 2011, Spain had had CSP stations in operation of 783.21MW, ones under construction of
848MW and ones being planned of 839MW. As to capacity, among CSP stations in operation, slot type accounts for 89.4%, mast type accounts for 4.0%, and other types include disc type and Fresnel type; among ones under construction, slot type accounts for 94.3%, Fresnel type accounts for 3.5%, mast type accounts for 2.0%, and the rest type is disc type; among ones being planned, slot type accounts for 92.0%, and disc type accounts for 8.0%. Conditions of Spanish CSP stations in 2011 are shown in Table 5-2.
On July 15, 2012, the total power output of 35 CSP stations accounted for 3.23% of Spanish gross power demand. Currently Spain has over 30 CSP stations under construction. According to estimate,
Spanish gross installed capacity of CSP stations will have reached 5,000MW by 2020.
5.1.2 Operational mode
(1) America
1) Subjects of investment and construction
In America, CSP stations are mainly invested and constructed by investor-owned utility (IOU), publicly owned utility (POU) and independent power producer (IPP).
IOU
IOU is owned by a private investor, subject to government regulation in power price and service.
IOU has fixed service area and is faced with less competition. Related government determines power price maintaining sound corporate finance, examines and approves new power station projects.
POU
121 Study of market potential of CSP in China
POU can be viewed as agency of federal, state or municipal government. Electric cooperative organization is also viewed as POU. Like IOU, POU has fixed service area and is faced with less competition. Most POUs are small and only provide power distribution service. But some POUs also own and operate power station(s), and sometimes cooperate with IOU and IPP. POU can determine power price and construct power station(s) by itself.
Independent power producer (IPP)
IPP is commercial developer and operator of power station(s), and wholesales power to power companies and industrial users at market price. Compared with regulated power companies, IPP is faced with heavier financial risk and intensive competition, doesn’t have any fixed service area, but may make more profits. IPP can construct power stations by itself.
2） Operational mode and power price mechanism
Take SEGS series of slot-type CSP stations as an example, 13.8MW SEGS1 Station and 30MW
SEGS2 Station were built up in 1984 and 1985 respectively. Both stations signed a 30-year power purchase contract with Southern California Edison Company.
All SEGS3 to 7 Stations have the installed capacity of 30MW respectively, and adopt the operational modes similar to that of SEGS1 Station and SEGS2 Station, thereof SEGS7 Station was built up in
1989. Station investors mainly include big companies, insurance companies, public utility investment departments and some private investors. From 1989 to 1990, 80MW SEGS8 Station and
80MW SEGS9 Station were built. SEGS series of stations are operated by Luz, but the construction plan of SEGS10 Station was given up for a financial crisis in 1991. Cumulative liabilities and investment of this series reached USD 1.16 billion. Main indicators of this series are shown in Table
5-1.
122 Study of market potential of CSP in China
Table 5-1 Main Indicators of American SEGS Series of CSP Stations
Station 1 2 3 4 5 6 7 8 9 Installed capacity 13.8 30 30 30 30 30 30 80 80 (MW) Floor space 29 67 80 80 87 66 68 162 169 (hectare) Operating 307 321 349 349 349 391 391 391 391 temperature (℃) Annual generation 9.3 10.7 10.2 10.2 10.2 12.4 12.3 14.0 13.6 efficiency (%) Annual power output 3010 8050 9130 9130 9920 9090 9260 25280 25610 (10,000kWh) Annual natural gas consumption 480 950 960 960 1050 810 810 2480 2520 (10,000m3) Annual water consumption 16.4 42.7 46.7 46.7 50.7 36.4 37.0 101.1 102.4 (10,000m3) Unit investment 4490 3200 3600 3730 4130 3870 3870 2890 3440 cost (Euro/kW)
(2) Spain
1) PS10 CSP Station
The 11MW mast-type station, with annual power output of 20,000MWh to 25,000MWh, was built
up in 2007. It has 1h energy storage device, and takes natural gas as standby fossil fuel. Its unit
investment cost is Euro 3,000/kW, and its rate of return on investment exceeds 7.5%. The station is
grid-connected and adopts commercialized operation.
The station, with the total investment of Euro 35 million, was constructed upon the investment of
governments and organizations, inclusive of Euro 5 million from European Commission and Euro
1.20 million from The Andalusian Autonomous Government. The project enjoys the financial
123 Study of market potential of CSP in China support of the central government’s low interest loan program.
According to Royal Decree 661/2007, the station adopts the mode of premium + power market bidding price, with the premium of Euro cent 27.12/kWh and the valid period of 25 years.
2) PS20 CSP Station
The 20MW mast-type station, with annual power output of 48,000MWh was constructed after PS10
CSP Station and built up in 2009. It has 1h energy storage device and takes natural gas as standby fossil fuel. Besides the premium of Euro cent 27.12/kWh in 25 years, it also enjoys the incentive of
Euro 1.90 million granted by The Andalusian Autonomous Government.
3) Andasol CSP Stations
Andasol series of slot-type CSP stations include Andasol1, 2 and 3 built up in 2008, 2009 and 2011 respectively. The 3 stations have the installed capacity of 50MW respectively, and their annual power outputs are 158,000MWh, 158,000MWh and 175,000MWh respectively. Every one of them has the total investment around Euro 300 million, and is equipped with 7.5h energy storage device.
Both Andasol1 and Andasol2 adopt the mode of premium + power market bidding price, with the premium of Euro cent 27/kWh and the valid period of 25 years. Andasol3 adopts new power price as of Jan 1, 2010.
4) Borges Termosolar CSP Station
The 22.5MW station is a CSP-biomass hybrid station built up in 2012. It has 2 biomass generators providing heat energy for CSP. According to estimate, its annual power output would be
98,000MWh. Its total investment is Euro 153 million from Spanish Abantia Group and Comsa Emte
Group. It adopts the mode of premium + power market bidding price, with the premium of Euro cent
27/kWh and the valid period of 25 years.
5) Gemasolar Thermosolar CSP Station
124 Study of market potential of CSP in China
The 19.9MW mast-type station, with annual power output of 110，000MWh, was built up in 2011. It has 15h energy storage device and takes natural gas as standby fossil fuel, and can generate power in
24 hours a day. Its total investment is Euro 230 million.
6) Puerto Errado CSP Station
Puerto Errado series of stations are Fresnel type stations. Puerto Errado 1 Station with the installed capacity of 1.4MW and annual power output of 2,000MWh was built up in 2009, and Puerto Errado
2 Station with the installed capacity of 30MW and annual power output of 49,000MWh in 2012.
Both of them adopt the mode of premium + power market bidding price, thereof Puerto Errado 1
Station adopts the premium of Euro cent 26.94/kWh and the valid period of 25 years, and Puerto
Errado 2 Station adopts the premium of Euro cent 26.87/kWh and the valid period of 25 years.
5.1.3 Incentive policies
(1) America
1) Tax credit policies
Investment Tax Credit (ITC)
In 2005, Article 1603 of American Energy Policy Act formulated the 30% ITC policy for commercial and domestic solar energy systems, i.e. 30% of investment in solar energy system can be deducted for tax. The policy was first executed from Jan 2006 to Dec 31, 2007. In 2008, American
Emergency Economic Stabilization Act extended the ITC policy by 8 years till to Dec 31, 2016 for commercial and domestic solar energy systems. Upon such long-term stable policy, enterprises are willing to formulate long-term investment strategies, quicken technical innovation and cut costs.
Driven by the policy, American gross installed capacity of solar power generation has increased by
76% every year on average since 2006, and presently exceeded 5,700MW.
125 Study of market potential of CSP in China
Manufacturing Tax Credit
Similar to ITC, America formulated the 30% Manufacturing Tax Credit policy. Among the 183 projects supported by the policy, 58 ones are solar energy projects, and manufacturing tax credit for solar energy related technologies accounts for a half and reaches USD 1.17 billion. The policy supports about USD 3.9 billion of investment in solar power generation.
2）Loan Guarantee Program
United States Department of Energy enabled Loan Guarantee Program according to Article 1703 in
2005, and turned to Article 1705 in 2009. The Program provides loan guarantee for projects inclusive of big solar power stations and encourages private investment. Loan amount was USD 4 billion in 2007, USD 38.5 billion in 2008 and USD 33.5 billion in 2009. By Dec 31, 2010, the
Program had provided USD 5.8 billion of loan guarantee for 4 CSP projects with the total installed capacity of 1,227MW. Solar power generation projects supported by American Loan Guarantee
Program are shown in Table 5-2.
Table 5-2 Solar Power Generation Projects Supported by American Loan Guarantee Program
Loan guarantee Installed Project name Technical type amount (USD capacity (MW) 100 million) Abengoa Solar Inc. CSP 14.46 250 Agua Caliente PV 9.67 290 BrightSource Energy, Inc. CSP 16 383 Cogentrix of Alamosa, LLC. CPV 0.91 30 Fotowatio Renewable Ventures, Inc. PV 0.46 20 Solar Trust of America (Solar CSP 21.05 484 Millennium) Solar Reserve, LLC (Crescent Dunes) CSP 7.34 110
126 Study of market potential of CSP in China
Loan guarantee Installed Project name Technical type amount (USD capacity (MW) 100 million) SunPower Corporation, Systems PV 11.87 250 (California Valley Solar Ranch) Total - 81.76 1817 Source: 2010 Solar Technology Market Report by Office of Energy Efficiency & Renewable Energy of United States Department of Energy
3）Renewable Energy Grants
In 2008, developers had difficulty in financing upon economic crisis, and ITC couldn’t meet subsidy demand, so America launched Renewable Energy Grants. The policy stipulates that projects in operation from 2009 to 2011 or under construction from 2009 to 2011 and to be put into operation before 2017 can get subsidy. By Feb 2011, the policy had provided USD 593 million of subsidy for
CSP projects and PV power projects.
4) Clean energy related bonds
There are 3 kinds of clean energy bonds in America. They include Qualified Clean Energy Bonds
(QCEBs), Clean Renewable Energy Bonds (CREBs) and Build America Bonds (BABs). Buyers of these bonds can enjoy tax credit reducing their interest payment to creditors.
5）Renewable Portfolio Standard
By late 2011, 30 states and District of Columbia in America had introduced RES, state goals were
10% to 33%, and CSP technologies are usually included.
（2）Spain
Spanish CSP policies are characterized by development plan for specific years, classified determination and rolling adjustment of grid-connected power prices, upper limit of power volume enjoying subsidy (calculated according to full load operation hours), etc.
1) Yearly development goal
127 Study of market potential of CSP in China
As stipulated in Royal Decree 1614/2010, the target installed capacity of CSP from 2011 to 2013 is
2,440MW (At present, total installed capacity of CSP power stations already approved for construction has reached 2,440MW, and that of CSP power stations already proposed for registration has been up to 4,500MW.)
CSP stations constructed from 2011 to 2013 will be grid-connected in 4 phases. Developers must realize grid-connection according to the time (Phases 1 to 4) promised during project preregistration
(If grid-connection is assigned to Phase 2, a power station can not realize grid-connection according to grid-connected power price enjoying subsidy before the beginning of Phase 2 but sell power at market price only.); normally it takes 1 year to handle initial procedures and applications. Once construction permit is obtained, a power station shall be completed within 36 months, otherwise it will lose subsidy for power price. Since 2014, every new CSP stations must be equipped with heat storage device.
2） Dual track system for grid-connected power price
In Spain, a CSP station with the installed capacity less than 50MW can enjoy the fixed power price of Euro cent 28/kWh in the first 25 years of its operation period and Euro cent 22/kWh later; variable grid-connected power price is “power pool price+ Euro cent 25.4/kWh.” Every year, power price rises with the change of adaptive mechanism; after installed capacity reaches 0.5GW, power price will be modified. A bank may provide 25-year power price guarantee.
3) Upper limit of power volume enjoying subsidy
In order to prevent capacity increase of existing power stations in future, Spain restricts the annual full load operation hours enjoying subsidy for CSP power stations, as shown in Table 5-3. For guaranteeing rated output and normal power supply, natural gas may be used for 12% to 15% of power generation.
128 Study of market potential of CSP in China
Table 5-3 Upper Limit of Annual Full Load Operation Hours Enjoying Subsidy for CSP Power
Stations
Power station type Annual full load operation hours
Slot-type power station without heat storage 2,855
Fresnel type power station 2,450
Disc type Stirling power station 2,350
Saturated steam mast-type power station 2,750
Slot-type power station with 9h heat storage 4,000
Slot-type power station with 7h heat storage 3,950
Slot-type power station with 4h heat storage 3,450
Mast-type power station with 15h molten salt heat storage 6,450
5.2 Analysis of CSP operation mode suitable for China
Constriction of CSP stations is favorable for expanding solar energy development scale and pulling the development of related industries in China, however, according to current power generation cost analysis and operation conditions, CSP projects still develop in early stage and have cost/kWh higher than that of ordinary power supplies. Under the restriction of peak-shaving capability, construction of CSP stations in Northwest China may be faced with certain power rationing sometimes. Hence, for CSP stations, on one hand, as to market operation mode, related national department shall provide certain guarantee so that investors and other interested parties keep enough confidence and interest in CSP station investment; on the other hand, as to station operation mode, CSP stations shall actively take feasible technical measures for more flexible and economical operation and better operational benefits.
129 Study of market potential of CSP in China
In power price policy, Chinese CSP stations shall adopt fixed grid-connected power price in a short term and floating grid-connected power price in combination with the construction of the building of power market on generation side in a long term. In China, all of wind power, PV power and other renewable energy resources adopt fixed grid-connected power price, with mature managerial and executive experiences. CSP can refer to the price modes of wind power and PV power, and adopt fixed grid-connected power price policy in a short term and give clear income signals to CSP investment enterprises and related manufacturers to quickly start and expand domestic market, and adjust fixed grid-connected power price at proper time upon market expansion and cost change. In the long run, with the gradual perfection and completion of Chinese power market on generation side, floating power price may be adopted, i.e. CSP stations participate in market bidding and determine grid-connected power prices according to market bidding plus fixed subsidy, thereof fixed subsidy may be adjusted according to the actuality.
In technical scheme, CSP stations shall be equipped with heat storage device as possible to greatly increase the dispatchability of CSP stations, improve load tracing capability and keep generating power in cloudy or rainy days to improve the stability of power output. When power rationing is necessary for a CSP station because of system fault in the daytime, solar energy in this time may be converted into heat for storage by heat storage device and used for power generation in evening peak period to reduce solar energy abandon and increase station utilization hours. Upon its additional flexibility thanks to heat storage device, a CSP station can operate in a much more economical way when bidding grid-connection is adopted on generation side in the future.
In Northwest China, wind energy resource well matches with solar energy resource, and CSP stations with heat storage device may adopt wind-combined operation mode in the future. Fig. 5-1 shows the distribution of monthly wind power output in Gansu Province and Xinjiang Uygur
130 Study of market potential of CSP in China
Autonomous Region; Fig. 5-2 shows the distribution of days on which power generation requirements of CSP station are not met among DNI measured data of Delhi City of Qinghai
Province. From the figure, it can be seen that, wind power output is large in Northwest China in
March and May to September, days with low DNI value in Delhi City are mainly distributed in May to September, well matchable with wind power output. Therefore, in the future, during the heavy use of wind energy in Northwest China, wind energy that can’t be consumed by power system in the wee hours may be converted into heat for storage by CSP station’s heat storage device, and finally used in evening peak period of power utilization.
0.4
0.31 0.30 0.3 0.28 0.28 0.29 0.29
力 0.25 0.22 0.23 出 0.21 0.20 0.2
平 均 平 0.15
0.1
0 1月 2月 3月 4月 5月 6月 7月 8月 9月 10月 11月 12月
平均出力 Mean wind power output
1 月 Jan
2 月 Feb
3 月 Mar
4 月 Apr
5 月 May
6 月 Jun
7 月 Jul
131 Study of market potential of CSP in China
8 月 Aug
9 月 Sep
10 月 Oct
11 月 Nov
12 月 Dec
Fig. 5-1 Monthly Mean Wind Power Output in Gansu and Xinjiang
20 18 18 18 17 16 16 15
14
12
天 10 8 8 7 7 6 6 5 4 4 2 2
0 1 2 3 4 5 6 7 8 9 10 11 12
天 day
Fig. 5-2 Monthly Distribution of Days with DNI Not Meeting CSP Requirements in Delhi City
of Qinghai Province
5.3 Incentive policies to promote CSP development in China
In China, CSP still develops in early stage, and related incentive policies are not good enough. It’s
132 Study of market potential of CSP in China urgent to launch related policies for improving technical R&D, industrial development, investment and construction of CSP and raising the strategic position of CSP technologies in Chinese energy supply system.
(1) To improve the investment and operation environment for CSP stations
At present, China hasn’t formulated any policies pertinent to CSP project development yet, but only implemented state-level franchise bidding for CSP projects, moreover, such implementation has been slow, and a policy environment hasn’t been formed for investment and operation of CSP projects yet.
Station project development can’t enjoy grid-connected power price or relevant fiscal and tax incentive policies, moreover, it’s difficult to evaluate project income, so investment and financing conditions haven’t gotten mature yet.
Priority to enjoy grid-connected power price is recommended in view of project development policy.
Reasonable grid-connected power price can attract developers to invest, widen related product market, further, drive the development of the CSP industry and form a benign cycle.
(2) To reinforce the support to industrialization of CSP technologies
Under the powerful propel of all circles, China has made a big progress in CSP technologies. In
China, studies on solar power technologies started as early as in the “7th Five-year” Plan Period, and the multilayer support, inclusive of National Natural Science Foundation of China, National Basic
Research Program of China (973 Program), National High-tech R&D Program of China (863
Program), Support Technologies, Science & Technology Innovation Foundation for Small and
Medium-Sized Enterprises and industrialization support capacity building, has promoted the technical R&D of CSP enterprises and the great development of related materials, components, equipment and integration technologies. But obviously Chinese CSP R&D system hasn’t permeated into integration technologies yet in view of complete grasp of core technologies and industrialization
133 Study of market potential of CSP in China of technological achievements. For example, the support of Ministry of Science and Technology mainly lies in prototype or demonstration system R&D, policies of National Development and
Reform Commission mainly include supporting the construction and operation of commercial power stations by power price, moreover, system design, operation technologies, maintenance technologies and others lack national financial support.
Upon the insufficiency of industrialization of technological achievements, no Chinese design institutes can independently design a CSP station. Experiences in existing test and study system and equipment can’t be effectively summarized or support the construction of domestic power stations, especially general contracting including engineering, procurement and construction (EPC) can’t be implemented. It’s significant for the large scale development of Chinese CSP stations to enhance the support to industrialization of research findings, especially the support to R&D of CSP station design, operation and maintenance technologies
(3) To perfect CSP quality supervision system
Lack of quality supervision system has become 1 bottleneck for the development of Chinese
CSP-related materials and equipment manufacturing industry. No continuous production lines have formed for any of key materials and equipment on Chinese CSP industry chain, e.g. slot curved glass reflector, concentrator, high temperature heat transmission fluid, heat storage material, heat storage exchanger, vacuum heat absorbing tube, various cavity heat absorbers. The state supports the manufacturing of such products, but lacks relevant quality supervision system. In order to promote the orderly development of related manufacturing industry, it’s recommended to launch various test standards and establish certification system as soon as possible.
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6. Policy suggestions
6.1 Suggestions to government on policies and measures to promote CSP
CSP, a main way of solar energy utilization, has developed rapidly in Europe, America and other countries and regions in recent years. With technical advance and industrialization, the CSP industry is promising to surge within the coming 20 years. It’s recommended to formulate pertinent measures in power price, finance and tax, R&D, service and others to propel the development of Chinese CSP industry.
(1) To gradually establish CSP grid-connected benchmark power price policy through demonstration project construction Grid-connected power price policy is critical for the development of CSP. If such policy is unclear, investor’s confidence may be weakened, unfavorable for industry development. In current stage, reasonable CSP grid-connected power price can hardly be estimated because there are few CSP stations in commercial operation in China, applicability, feasibility and reliability of system integration technologies and key product technologies need validation, domestic related equipment production level, product quality and others haven’t met large scale application requirements yet,
CSP industry standard system is unavailable, and further exploration is needed for construction cost and operation cost of CSP stations.
It’s recommended to support the construction of several representative CSP demonstration projects in Northwest China with excellent solar perpendicular incidence resources, test and validate the maturity and reliability of mast type, slot type and other CSP technologies and CSP-fuel gas/coal hybrid operation mode, let demonstration projects enjoy preferential grid-connected power price according to cost plus reasonable profit principle, accumulate experiences via demonstration projects, and drive the establishment of product supply system and technical support system; determine reasonable CSP benchmark grid-connected power price via demonstration projects, conduct timely rolling adjustments and propel the large scale development of CSP.
135 Study of market potential of CSP in China
(2) To launch finance and tax incentive policy for CSP
CSP is renewable energy power generation technology. Referring to the experiences in developing wind, PV, biomass and other renewable energy resources, the state needs to formulate certain preferential finance and tax policies encouraging development in early stage. Main policies include
Value-added tax halving policy. As stipulated in Cai Shui [2008] No. 116 Document Notification of
Releasing Catalog of Public Infrastructure Projects Enjoying Enterprise Income Tax Preference
(Version 2008) jointly issued by Ministry of Finance, State Administration of Taxation and National
Development and Reform Commission, value-added tax on wind power sales is simultaneously levied and rebated by 50%. As stipulated in Circular on the Value-added Tax Policy for Photovoltaic
Power Generation jointly issued by Ministry of Finance and State Administration of Taxation, value-added tax on own solar power sales by taxpayer is simultaneously levied and rebated by 50%.
It’s recommended to also implement value-added tax halving policy for CSP referring to that for wind power and PV.
Tariff reduction and exemption policy for import of key equipment and parts and components.
Chinese CSP industry system hasn’t been complete yet, and some key equipment and parts and components rely on import. It’s recommended to reduce and exempt customs, value-added tax and others in import link for such equipment and parts and components to cut the construction cost of
CSP stations.
(3) To increase R&D input and international cooperation
Pertinent to high temperature vacuum heat collection tube, heat absorber, heat conduction oil, heat storage salt and other key equipment and materials restricting Chinese CSP development as well as system integration and control technologies, it’s recommended to reinforce the support to R&D input, concentrate advantageous resources, take national scientific and technological programs as tache,
136 Study of market potential of CSP in China establish the cooperation relationships between government and enterprise or enterprise and enterprise, and realize complementation by respective advantage and joint difficulty tackling; actively attract multinational companies experienced in CSP station construction and related product
R&D for cooperative R&D or demonstration project construction and accumulate experiences thereupon.
(4) To perfect the public technical service system of the CSP industry
Besides increasing R&D input, it’s recommended to pay special attention to the construction of public service system of the CSP industry, inclusive of technical standard for CSP, test, certification and other quality control systems as well as talent cultivation system; in particular, quicken the establishment of technical test and validation platform; especially conduct adaptability validation for introduced technical equipment pertinent to cold site, wind, sand and other problems of domestic
CSP station sites.
6.2 Suggestions to Bright Source on steps to enter the Chinese market
Chinese CSP development has huge potential and a broad market prospect. Hence we suggest Bright
Source should further quicken the layout of CSP development and relevant station construction in
China, give full play to own technical advantage and propel the sound and rapid development of
Chinese CSP industry.
(1) To enhance the coordination with power grid companies
Most regions with excellent solar perpendicular incidence resources and suitable for construction of
CSP station are in Northwest China. These regions have weak power grid structure, relatively rare population and small power load. Normally power output of CSP station is transmitted to load center areas by high voltage transmission network for consumption. Therefore timely grid-connection and
137 Study of market potential of CSP in China consumption is a critical factor for early start of operation and profitmaking of CSP station. During planning and site selection of CSP station, it’s recommended to enhance the communication and coordination with power grid enterprise, specify grid-connection requirements for power station, and cooperate with power grid enterprise to propel the approval and construction of supporting power grid work and guarantee smooth grid-connection and consumption for CSP station.
(2) To select domestic powerful partners for demonstration project construction
One purpose of related government department’s propelling CSP demonstration project construction is to validate the feasibility of technologies, meanwhile, form domestic independent industrial production capacity through demonstration projects, realize local purchase, cut the power generation cost of CSP station and improve market competitiveness. It’s easier to get government support through selecting domestic partner(s) for demonstration project construction.
As to partner selection, CSP station needs high initial investment, has long investment recovery period, lays certain requirements on overall integration, construction and operation level, and is subject to high industry entry threshold, and big power groups are advantageous herein. It’s recommended to select domestic leading power enterprises to jointly construct CSP demonstration projects and guarantee successful project operation.
(3) To actively participate in the formulation of technical codes and industry standards for
CSP
Another purpose of related government department’s propelling CSP demonstration project construction is to let project investors and equipment manufacturers jointly formulate reasonable and feasible construction schemes, conduct technical appraisal, comparison and selection, share some common technical schemes and parameters (e.g. demand for land, water, light and other resources, heat storage proportioning, technical economic evaluation report) in the industry, form codes and
138 Study of market potential of CSP in China standards as soon as possible and make domestic CSP station integrated design capacity get mature as soon as possible. It’s suggested that Bright Source give fully play to own technical advantage and construction experiences, actively participate in the formulation of technical codes and industry standards for CSP projects and build up authoritative position and good corporate image in the industry.
(4) To gradually apply heat storage technologies to demonstration projects
Heat storage device in CSP station can improve the operation flexibility and output adjustability of
CSP station. However, in technology, molten salt heat storage and other technologies haven’t been fully mature yet with the problems inclusive of complex structure of heat storage device, high temperature molten salt decomposition, pipe corrosion, pipe block by molten salt condensation, so reliability of such technologies needs further validation by commercial power stations. In cost, heat storage device will increase total project investment and cost/kWh, even prolong investment recovery period and decrease rate of return if grid-connected power prices pertinent to different periods aren’t adopted. In view of solar radiation resources of project site in Delhi City of Qinghai
Province, under given installation conditions, annual heat storage time available is only 35.62%, and the utilization rate is low. In overall consideration, it’s recommended not to use heat storage device for Phase 1 of demonstration project. After all conditions get mature, such device may be added in
Phase 2 according to project operation conditions.
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Attachment 1: Meeting minutes of CSP workshop
On Apr 10, 2013, State Grid Energy Research Institute and Bright Source invited related department leaders and experts to CSP Symposium in Beijing.
Vice Department Chief Liang Zhipeng of National Energy Administration attended the symposium, leaders from Energy Research Institute of National Development and Reform Commission and other units introduced Chinese CSP development status, solar energy resource analysis and evaluation, technical characteristics and technical economicalness of CSP in special topics, and those experts discussed Chinese CSP development policies, CSP industry conditions and CSP prospect (Main opinions of experts, see the Appendix.).
On the symposium, it was concluded that CSP is a main way of solar energy utilization and has a broad prospect. China shall urgently survey CSP resources in detail, specify related technical requirements, codes and standards in combination with CSP demonstration project construction, propel the development of domestic supporting equipment manufacturing industry and improve the market competitiveness of CSP projects as soon as possible.
Participants
National Energy Administration: Liang Zhipeng
Electric Power Planning & Engineering Institute: Sun Rui, Zhao Min, Han Xiaoqi
China Renewable Energy Engineering Institute: Wang Jixue
Energy Research Institute of National Development and Reform Commission: Sun Peijun
Institute of Electrical Engineering of Chinese Academy of Sciences: Chang Chun
China Meteorological Administration: Zhao Dong
XJ Group Corporation: Chen Chong
140 Study of market potential of CSP in China
Shanghai Electric: Bi Chengye, Zhang Jianxin, Xia Qi, Xu Lilu
CGN Solar Energy Development Co., Ltd.: Zhang Ji
Guangzhou Fazhan New Energy Co., Ltd.: Li Zhiwen
Guangdong Yudean Group Co., Ltd.: Zhu Xiaowen
Hina Investment Group: Yao Xiaorui, Andrew Rogan
Renewable Energy Asia Group (REA): Xu Gang
State Grid Energy Research Institute: Jiang Liping, Li Qionghui, Guo Jiwei, Sun Liping, Cao
Shiya
Bright Source: Huang Yun, An Borui, Gong Tianju, Jose Barak, Yoel Gilon, Binyamin Koretz,
Fu Jingfen
Appendix: Opinions of Experts on CSP Symposium
1. State Grid Energy Research Institute
(1) Technical economicalness of CSP and prospect of related industry are main issues of cooperative study by State Grid Energy Research Institute and Bright Source. Technical economicalness of CSP shall be evaluated in view of optimal overall operation cost of power system and in consideration of both generation cost of power station and reconstruction cost and system balance cost of supporting power grid. The CSP industry shall develop in close combination with traditional electrical equipment manufacturing industry, and further propel the development of
Chinese electrical equipment manufacturing industry through CSP project construction.
(2) Unified planning shall be made for energy development and utilization, e.g. power grid, railway and other energy transmission passages shall be adequately used to optimize the combined transmission of wind power, solar power, coal and other resources of West China.
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(3) CSP demonstration project and public technical service platform shall be developed to validate and share CSP technologies, explore and popularize policies and measures promoting CSP.
(4) During planning and site selection of CSP station, communication and coordination with power grid enterprise shall be enhanced to propel the approval and construction of supporting power grid work and guarantee the smooth grid-connection of CSP station.
2. Bright Source
(1) Bright Source is willing to provide technical service and support “General Survey of CSP
Plant Sites and Study on Demonstration Project Implementation Schemes” organized by National
Energy Administration. Hope Chinese CSP industry and related manufacturing industry develop as rapidly as possible upon the share of experiences and lessons of Bright Source.
(2) According to the technical and design routes of Bright Source, most materials and components (costing over 80% of construction investment) needed by a mast-type CSP station can be purchased in China, and only minor parts inclusive of control system software rely on import.
Currently many materials and components of Ivanpah Project of Bright Source in California of
America are imported from China.
(3) According to the simulation calculation by Bright Source and Northwest Electric Power
Design Institute for a particular CSP station site, a CSP station with the installed capacity of 1*135 to 3*135MW (a little natural gas as standby fuel, energy storage free) is at the unit construction cost of RMB 12,000 to 15,000 and the cost/kWh of RMB 0.75 to 1/kWh.
3. Energy Research Institute of National Development and Reform Commission
(1) China can produce most materials and components for CSP stations, but lacks of engineering validation. Technical experiences in system integration and station operation are blank, some key equipment and product technologies need a breakthrough.
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(2) CSP is at high generation cost. In China, investment cost/kW is RMB 20,000 to 30,000, and cost/kWh is RMB 1.2 to 2.
(3) Chinese solar perpendicular incidence resource data are inadequate. There are only a few solar energy resource monitoring points, moreover, normal detection excludes perpendicular incidence resource.
(4) China lacks CSP technical support system, and urgently needs to establish related codes and standards and public test and R&D platform.
4. China Meteorological Administration
(1) For the site selection of CSP project, resource conditions shall be taken into account, moreover, risks brought by weather change and environmental change to project operation shall be also fully considered.
(2) China is very rich in solar energy resources, but existing observation and evaluation of solar perpendicular incidence can’t meet the need of CSP development, so it’s recommended to start
CSP resource evaluation and site selection study as soon as possible.
5. Electric Power Planning & Engineering Institute
(1) Conditions for CSP station project construction have been ready in China, and related work shall begin as soon as possible.
(2) Domestic market shall be enabled and expanded as soon as possible, CSP projects shall be constructed to drive the development of Chinese CSP industry, and relevant technologies and equipment shall be gradually localized. For early projects, some key technologies and equipment unavailable at home may be imported from abroad.
(3) Grid-connected power price is a critical policy propelling CSP development. Franchise bidding power price can’t reflect the actual cost of CSP, so grid-connected power price shall be
143 Study of market potential of CSP in China determined in another way.
(4) Air cooling, electrostatic cleaning and other technologies can sharply reduce the water consumption of CSP and mitigate the restriction of water resource to CSP development.
(5) CSP and PV, with respective characteristics and advantages, can’t substitute for each other.
Both of them have a broad prospect in China.
6. Shanghai Electric
(1) In view of international development, CSP technology has gotten basically mature. It’s estimated that, CSP will enter the rapid development stage in China in the coming 3 to 5 years.
(2) In consideration of project financing, R&D cost amortization and other issues, power generation cost of overseas CSP projects in operation is higher than real cost. According to the calculation of Shanghai Electric for the economicalness of CSP, investment cost/kW is RMB 12,000 to 15,000, and cost/kWh is RMB 1.0 to 1.2/kWh.
(3) Air cooling technology can overcome the restriction of water resource to CSP.
7. Renewable Energy Asia Group
(1) In view of land area and power generation stability, mast type CSP technology is superior to slot type CSP technology.
(2) Grid-connected power price policy is critical for CSP development. If such policy is unclear, investor’s confidence may be weakened, unfavorable for industry development.
(3) Policies and technical codes for CSP grid connection shall be formulated as soon as possible to guarantee the grid-connected power generation of CSP stations.
8. CGN Solar Energy Development Co., Ltd.
(1) Besides solar energy resource and water resource, grid-connected outgoing line laying, large part transport and other factors shall be also taken into account for site selection of CSP station.
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(2) CSP projects shall adopt highly mature, very reliable and strongly controllable technical route to boost the confidence of the public and the investors in CSP technologies.
(3) The establishment of technical test and validation platform shall be quickened; especially adaptability validation shall be conducted for introduced technical equipment pertinent to low temperature, wind, sand and other problems of domestic CSP station sites.
(4) Related technical standards shall be put forward via demonstration projects to lay foundation for future large scale development.
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Attachment 2: Report on solar energy survey in Qinghai
From May 14 to 17, 2013, the dispatched personnel of State Grid New Energy and Statistical
Research Institute surveyed the development status of solar power generation in Qinghai Province.
The survey personnel learnt about the development status of solar power generation in Delhi City,
Golmud City and other places, and held a symposium with State Grid Qinghai Electric Power
Company, local energy administrations, solar power companies and others to learn about existing problems of solar power generation and hear related suggestions. The survey is reported as below.
I. Solar power development in Qinghai
By Apr 2013, 64 solar PV power stations in total had been connected with Qinghai Power Grid, their total installed capacity is 1.548GW accounting for 9% of Qinghai provincial gross installed capacity of power generation and 34% of State Grid’s total solar grid-connected installed capacity. Thereof,
60 grid-connected PV power stations are in Haixi Region and have the total installed capacity of
1.453GW; 3 PV power stations are in Hainan Region and have the total installed capacity of 75MW;
1 PV power station is in Huanghua Region and has the installed capacity of 20MW (See Fig. 1). In
Jan to Apr 2013, the cumulative solar PV power output of Qinghai Power Grid was 687GWh, and the total utilization hours was 456h.
Besides PV power stations, CSP study and station construction are also hot in Qinghai Province. At present, multiple CSP stations are in initial stage, 2 CSP stations are under construction and have the total installed capacity of 100MW, and both of them are in Delhi City of Haixi Prefecture.
146 Study of market potential of CSP in China
海南 黄化 5% 1%
海西 94%
海南 Hainan
黄化 Huanghua
海西 Haixi
Attached Fig. 1 Distribution of Solar Power Generators in Qinghai
1． General situation of main solar power stations
(1) SUPCON Delhi CSP Station
SUPCON Delhi CSP Station was constructed upon the investment of Zhejiang SUPCON Solar
Technology Co., Ltd. (hereinafter referred to as “ SUPCON”). The mast-type station has planned installed capacity of 50MW, land area of 3.30 million m2 and design annual power output of
120GWh. Thereof, Phase I Project has investment of RMB 210 million, installed capacity of 10MW and land area of 400,000m2, its site selection was finished in Oct 2010, it successfully started to generate steam in Aug 2012, and it would be grid-connected for power generation in middle and late
June 2013. All core equipment of the project are homemade.
Phase I Project has 2 solar heat absorbing towers at the height of 92.8m and over 20,000 heliostats.
Every heliostat, with the area of 2m2 and focusing accuracy less than 2mrad (1mrad≈0.06degree), automatically traces the sun by astronomical calendar method. Under rated working conditions,
147 Study of market potential of CSP in China every heat absorbing tower can generate 25t 310℃ 9.8Mpa saturated steam a hour, and such steam can form superheated steam after the complementary combustion by fuel gas-assisted system to drive turbine for power generation.
Attached Fig. 2 SUPCON Delhi CSP Station
The site of SUPCON Delhi CSP Station has excellent resource conditions, with the direct normal irradiance (DNI) up to 1,800kWh/m2/year. According to the investor’s calculation of actual steam output and rated steam flow, after the station is put into operation, annual hours of utilization can reach 1,600h, and rise to over 1,800h by steam heat storage increase, mirror cleanliness improvement and other measures, annual mean power generation efficiency is about 15.7%, and peak efficiency may reach 24%.
SUPCON Delhi CSP Station is the first commercial CSP station of China. SUPCON conducted multiple times of new technical validation and R&D based on the station. I. R&D of molten salt heat storage technology. SUPCON is carrying out hot molten salt property, process design and special equipment experiment and development, and plans to use molten salt as heat conduction medium for heat storage and directly generate superheated steam for power generation later, further improve
148 Study of market potential of CSP in China power generation efficiency and output characteristic. II. R&D of automatic cleaner. For CSP station,
SUPCON has researched and developed automatic cleaning robot that can realize automatic tracing and unmanned driving to clean the optical field heliostat once per 7 to 15 days. III. R&D of turbine generator suitable for CSP. SUPCON, together with Hangzhou Turbine & Power Group Co., Ltd., developed CSP-dedicated turbine generator that realizes quick start and frequent start and stop and adapts to the frequent fluctuation of steam parameters.
160 141.9 140 133.8 114.9 120 116.9 100 108.4
80 小时 60
40
20
0 9月 10月 11月 12月 1月
2012年 2013年
小时 h
9 月 Sep
10 月 Oct
11 月 Nov
12 月 Dec
2012 年 2012
1 月 Jan
2013 年 2013
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Attached Fig. 3 Estimated Utilization Hours of SUPCON Delhi CSP Station
(2) CGN Delhi CSP Station
CGN Delhi CSP Station was constructed upon the investment of CGN Solar Energy Development
Co., Ltd. It has planned installed capacity of 50MW, land area of 400,000m2 and total investment of
RMB 600 million. It adopts slot type power generation technology and air-cooled generator. It was approved in Feb 2013, commenced in Aug 2013, and will be completed in Sep 2015 and grid-connected for power generation in Aug 2016 according to plan.
Based on CGN Delhi CSP Project, CGN has started the construction of National Energy Solar Power
Generation Technology Research Center and CSP Key Technology Test Base. Phase 1 Project of the test base has land area of about 140,000m2 and total investment of RMB 80 million, and will have 1 set of 1.5MW slot type CSP test platform for independent, stable and continuous power generation in
Sep 2013. Such test platform is made up of 1.6MW thermal power slot type heat collector and
1.6MW thermal power Fresnel type heat collector, hot heat conduction oil transmission system,
10MWh hot molten salt heat storage device and 1.5MW air-cooled turbine generator.
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系统配置 System configuration
集热场 Heat collection field
热罐 Hot tank
冷罐 Cold tank
再热器 Reheater
汽轮机 Turbine
过热器 Superheater
蒸汽发生器 Steam generator
预热器 Preheater
空冷 Air cooler
高加 High pressure heater
除氧器 Deaerator
低加 Low pressure heater
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Attached Fig. 4 System Configuration Diagram of CGN Delhi CSP Station
技术引进 Technology introduction
消化吸收 Learning
自主创新 Independent innovation
再创新 Re-innovation
槽式和菲涅耳式中试 Slot/Fresnel type pilot test
槽式集成技术研究 Slot type integration research
50MW槽式太阳能热发电 50MW slot type CSP demonstration 示范
大容量熔融盐储热技术 Large capacity molten salt heat storage technology
10MW塔式太阳能热发电 10MW mast type CSP demonstration 示范
低成本固体储热技术研 Low cost solid heat storage research 究
上网电价 元/度电 Grid-connected power price RMB/kWh
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Attached Fig. 5 Technical Route of CGN CSP R&D
CGN expects to, by virtue of Delihi Test Base, promote the localization and industrialization of CSP technology and equipment, make breakthroughs in top design, integration innovation, test technology, special R&D and other respects of CSP station, realize the gradual transition from slot type power generation to mast type power generation through the technical route from technology introduction to learning, independent innovation and re-innovation, and achieve the target grid-connected CSP power price within RMB 0.8/kWh in 2016.
(3) Yellow River Upper Reach Hydropower Golmud PV Power Station Yellow River Upper Reach Hydropower Golmud PV Power Station, about 30km in the east of
Golmud City of Haixi Prefecture, was constructed as of 2011 and has the installed capacity of
300MW.
Phase 1 Project, with the installed capacity of 200MW, adopts 852,480 pieces of 235W polycrystalline silicon solar cell modules in total. A 200MW cell array is made up of 192 pieces of
1MW cell subarrays, every 1MW is equipped with 2 sets of 500kW inverters and 1 set of 1,000kVA box-type transformer, every solar cell subarray is made up of solar cell series, converge device, inverter and step-up device. Inverter output AC is stepped up to 35kV by step-up transformer and to
330kV by main transformer in sequence, finally transmitted to the outside by public substation.
Phase 2 Project, on the east of Phase 1 Project, was commenced in 2012, and grid-connected for power generation in Dec 2012. Its installed capacity is 100MW. It’s made up of 95MW polycrystalline silicon cell subarray and 5MW CPV power generation system.
(4) State Grid Longyuan Golmud PV Power Station
State Grid Longyuan Golmud PV Power Station, with the planned installed capacity of 200MW, is located in a desert zone 29km in the east of the urban area of Golmud City and 1.5km in the north of
National Highway 109. It was constructed as of Aug 2009.
Phase 1 Project, with the installed capacity of 20MW, has the land area of 1,027Mu and investment
153 Study of market potential of CSP in China of about RMB 400 million and was grid-connected for power generation in Dec 2011. It adopts 2 cell technologies and 3 fitting modes. Thereof fixed fitting is for 17MW polycrystalline silicon and
1.5MW non-crystalline silicon; single-axis tracing is for 1MW polycrystalline silicon; double-axis tracing is for 500W polycrystalline silicon. The project is connected with local power grid by 35kV line.
Phase 2 Project, with installed capacity of 30MW and total investment of about RMB 560 million, is on the east of Phase 1 Project. It adopts 129,312 pieces of 235W polycrystalline silicon PV modules in total. Thereof, fixed fitting is for 24MW, double-axis tracing is for 5MW, and slant single-axis tracing is for 1MW. Phase 2 Project adopts 3 circuits of 35kV power collection lines, has a new
110kV step-up substation, and is connected with the local power grid by 1 circuit of 110kV line.
Phase 3 Project, with installed capacity of 20MW and land area of 668Mu, adopts 84,960 pieces of
240W polycrystalline silicon cell modules in total by fixed fitting. It’s connected with the local power grid by 110kV step-up substation of Phase 2 Project.
2． Output features and operation dispatch of solar power generation
(1) Output features of PV power generation
1) Monthly and yearly output features
PV power output in Qinghai is mainly influenced by illumination intensity and temperature.
Normally, the larger illumination intensity is, the higher mean PV power output will be; and such mean output is very high at the temperature of about 30℃。According to actual operation conditions, mean PV power output is the largest in April, May, September and October of every year in Qinghai.
Hence annual PV power output feature of Qinghai is large in spring and autumn and small in summer and winter. 2) Daily output features
Daily output curve in typical sunny days and cloudy days are shown in the figure below. In sunny
154 Study of market potential of CSP in China weather, PV power output looks like semi-sine, and output is centralized from 6:00 a.m. to 6:00 p.m. and reaches its maximum at noon, up to over 90% of design value; output basically falls to zero after
7:00 p.m. In cloudy weather, irradiance data change a lot upon the shield by cloud, so PV power output fluctuates significantly in a short time. Overall, daily PV power output takes on positive peak feature in Qinghai.
2001 0.71505
0.15075
） ）
0100.5
MW MW
0100.5
0.2505
0.2505
光伏电站出力（ 光伏电站出力（
0 0 00 00:0000:00 06:0006:00 12:0012:00 118:008:00 00:0000:00 00:0000:00 06:0006:00 112:002:00 118:008:00 00:0000:00 5月23日 2008年3月4日
Attached Fig. 6 Output Features of PV Power Stations in Qinghai in Typical Sunny/Cloudy Days
3) Output probability distribution
Statistical analysis is conducted for probability distribution of daytime output only, regardless of the time when night PV power output is zero. The figure below shows the probability distribution of PV power output in Qinghai, the probability of PV power output less than 10% of installed capacity is
28.6%, and that less than 20% is 39.6%; the probability of yearly PV power output over 90% of installed capacity is only 0.38%, and that over 80% is only 5.61%.
155 Study of market potential of CSP in China
概率分布 35%
30% 28.6%
25%
20%
15% 10.9% 9.6% 10.3%10.1% 10% 7.8% 8.2% 8.7% 5.2% 5% 0.4% 0% 90 80~9070~8060~7050~6040~5030~4020~3010~20 <10 光伏电站出力系数（%）
概率分布 Probability distribution
光伏电站出力系数（%） PV power output coefficient (%)
Attached Fig. 7 Probability Distribution Graph of Qinghai PV Power Output (regardless of zero output at night)
4) Output fluctuation
Power output of PV power stations in Qinghai is fluctuating. Power output changes upon cloud shield with weather change, and the maximum fluctuation of minute-level power output (10-30min) is around 20% of PV installed capacity.
5) Capacity reliability
Daily load features of Qinghai is mainly embodied in evening peak, max. daily load appears around
8:00 p.m., and PV power output basically falls to zero at that time. Hence the capacity reliability of
PV power stations in Qinghai is 0 in evening peak time.
(2) Planning and arrangement for PV power generation
Planning and arrangement for PV power generation in Qinghai differ in 2 cases: I. Normally section is unrestricted, for the draft of output curve of PV power station, a power generation plan is issued
156 Study of market potential of CSP in China according to the power forecast curve reported by PV power enterprise, and PV power generation is fully accepted; II. When section is restricted, output curve of PV power station is drafted on the principles as follows:
Conventional power output inside section + PV power output-Regional load-Chaila DC section outgoing extreme
PV power output = Section outgoing extreme + Regional load + Chaila DC- Conventional power output inside section
Thereof, Chaila DC is given by State Power Dispatch Communication Center, section outgoing extreme is given upon power grid safety check, conventional power output inside section is arranged according to about 70% of installed capacity (Currently, restricted section is in Haixi Region with
Golmud Fuel Gas-fired Power Station only, and the power output level of such station is about 70% in restricted time.).
3．Main work of State Grid Qinghai Electric Power Company for promoting grid connection of solar power generation In recent years, State Grid Qinghai Electric Power Company made a great effort in special topic study, operation analysis, grid connection test, plant-grid coordination and others to guarantee the timely grid connection and consumption and overall stable operation of PV power generation.
I. Advanced special topic studies. Large scale construction for solar power generation was started in
Qinghai in 2009. According to the development situation of solar power generation, State Grid
Qinghai Electric Power Company finished PV Acceptance Capability Analysis of Qinghai Power
Grid, Adaptability of Qinghai Power Grid to Large Scale PV Power Generation, System Access of
Grid-connected PV Power Stations in Qinghai and other special topic studies in sequence from 2009 to 2010; Check of PV Grid-connected Consumption Capability in Haixi Region, Influence of
Qinghai-Tibet DC Grid connection, Influence on Power Supply of Electrified Railways, Influence on
Safe Operation of Haixi Power Grid and other special topic studies in 2011. The findings of such
157 Study of market potential of CSP in China studies well direct State Grid Qinghai Electric Power Company in responding to solar power development.
II. Timely operation analysis. From Aug 2012 to early 2013, State Grid Qinghai Electric Power
Company, together with China Electric Power Research Institute, conducted system analysis and calculation and repeated argumentation, put forward complete stability control plan and strategy for
PV region in Haixi, and put stability control device into operation in the large scale PV station region of Haixi Power Grid, greatly improving the power grid’s acceptance capacity for PV power output.
In respect of voltage regulation and dynamic stabilization upon the large scale PV centralized grid connection, State Grid Qinghai Electric Power Company organized multiple technical symposia and work arrangement conferences to coordinate every PV power station’s enhancing the operation and maintenance of dynamic reactive power compensation equipment, guarantee normal operation of equipment and effectively improve system voltage regulation capability.
III. Active grid connection test. State Grid Qinghai Electric Power Company strictly requires grid-connected PV power stations to conduct grid connection test in time, supervises and urges related plants to carry out technical renovation and software upgrade according to test result, further, improve the resistance of PV power station against power grid disturbance and mitigate the risk of simultaneous grid-disconnection of large scale PV power stations. It’s estimated that grid connection test and PV inverter’s low voltage ride through improvement will be finished for all PV power stations in 2013.
IV. Active release of power grid information. State Grid Qinghai Electric Power Company established PV power plant-grid quarterly coordination meeting system to declare power grid operation situation and recent power grid overhaul schedule and release power grid information in time, winning the wide understanding of PV power stations and the public.
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II. Main problems
(1) Disjoint between central and local solar power development plans
A connection mechanism is unavailable between central and local solar power development plans.
Currently the right to approve solar power projects is held by provincial governments only. Although the state formulated Solar Power Development Plan of the “12th Five-year” Plan Period, the plan isn’t broken down to all local places, moreover, total quantity control measures similar to those for wind power development are unavailable, so the plan isn’t binding enough. In order to increase investment and propel economic development, local governments impulsively expand the scale of solar power development. Take Qinghai Province as an example, in the Development Plan of the
“12th Five-year” Plan Period issued early 2011, Qinghai Province set up the development goal of reaching the installed capacity of 2GW for new energy by 2015, but the target installed capacity of
PV power generation was raised to 4.13GW early 2012, recently it’s reported that, the goal of PV power development in Qinghai Province may be further raised to 5GW by 2015. Frequent adjustment of plan makes the market more uncertain and the construction of supporting facilities more difficult.
(2) Mismatch of construction between PV power stations and power grids
I. Mismatch between construction plans for PV power stations and power grids. Solar Energy
Development Plan of Qinghai Province was finalized and issued by The People’s Government of
Qinghai Province early 2012, but the “12th Five-year” Plan of Qinghai Power Grid was approved by
State Grid in 2010, so some PV power station supporting transmission projects are missed in it. In order to realize timely grid connection and power generation of PV power stations, some supporting transmission projects adopt the construction mode of advance payment by PV power station investor and later refund to such investor by power grid company upon project approval, taking risk of
159 Study of market potential of CSP in China noncompliance.
II. Mismatch between PV power stations and power grid projects in construction time. A PV power station has short construction period, for example, it takes only 6 to 9 months as of approval to build up and put into operation a 20MW PV power station, but a power grid project is usually approved after a long time as of proposal. For example, it takes over 2 years to get approval for and build up a 330kv power grid project. A PV power station can hardly match with a power grid in construction time. (3) External transmission of solar power
PV power generation is highly centralized in Qinghai Province, and mainly distributed in Haixi
Region. Power output of most PV power stations in Haixi Region assemble according to 35/110kv voltage class, and then such power is transmitted together to the outside by 330kv line and 750kv line, normal transmission capacity is only about 600MW. In recent years, with the rapid development of PV power generation, the transmission capacity of power grid in Haixi Region has been more and more insufficient. According to the actual operation state of PV power generation in Haixi Region, the power output of Phase 1 PV projects put into operation before Apr 2012 can be fully consumed; the power transmission of Phase 2 PV project with the installed capacity of about 500MW put into operation in sequence as of Apr 2012 is restricted because Qaidam single main transformer can’t pass power grid safety check. In Jan to Apr 2013, most Phase 2 PV power stations are restricted from grid connection in a long period of a day (11:00-17:00).
In respect of power rationing for Phase 2 projects, State Grid Qinghai Electric Power Company has adequately communicated with local government and PV power companies, as a result, Qinghai
Development and Reform Commission signed Qinghai 2012 Grid-connected PV Power Generation
Project Contract with every local PV power company to agree that output rationing will be adopted to PV power generation projects before 750kv Qaidam Substation Expansion Project is completed.
When 1 new main transformer of 750kv Qaidam Project is put into operation in June 2013, all PV power output in Haixi Region would be accepted.
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However, in view of development trend, the installed capacity of PV power generation in Haixi
Region will reach 4GW in the “12th Five-year” Plan Period according to the planning of related government department of Qinghai Province, so capacity of external transmission passage will be more and more insufficient. First, the 750kv second passage power transmission and transformation project completed and put into operation in late June 2013 for the connection of Xinjiang Power
Grid with main power grid of Northwest China is unfavorable for the transmission and consumption of PV power of Haixi Region. As planned, Xinjiang will transmit about 2.3GW coal-fired power to
Haixi Region of Qinghai Province via the second passage, further squeezing the consumption room of Haixi Power Grid. Second, State Grid Qinghai Electric Power Company plans to construct 2 circuits of 750kv intensifying passage between Haixi Power Grid and Xining Power Grid to intensify the PV transmission capacity of Haixi Region, but the plan hasn’t been substantially executed yet.
Third, related department has ever conceived the construction of ultra-high voltage transmission project in Qinghai Province, but ultra-high power grid plans for 2015 and 2020 of State Grid
Qinghai Electric Power Company aren’t involving external transmission of Qinghai Province.
(4) Influence of PV grid connection on the operation of Qinghai Power Grid
Most PV power stations of Qinghai Province are centralized in terminal power grids with weak frame and small load base. PV power output is characterized by intermittent, fluctuant and others, so large scale grid connection significantly influences the safe and stable operation of power grid. First, after the grid connection of large scale PV power stations, local load is small, and most power is transmitted for a long distance, so the safety and stability margins of power grid decrease. Second, intermittent power output of PV power station may cause large range reversion, overvoltage and others to reactive power flow, making system reactive power balance and voltage control more difficult. Third, PV power stations may be constructed like a “herd behavior” by a good many of investors and construction units, thereof quite a large part of investors lack of experiences in power station development, some construction contractors also lack of experiences in power station construction, so solar power stations are uneven in equipment quality, construction technique and operation level. Especially in late 2011, rushing to start power generation before the adjustment of
PV power price, many PV power stations were grid-connected before finishing stipulated test
161 Study of market potential of CSP in China procedure, hiding danger for safe and stable operation of power grids.
(5) Influence of grid connection of solar power generation on power purchase cost of power grid
Large scale grid connection of solar power generation raises power purchase cost of power grid.
Currently State Grid Qinghai Electric Power Company settles power price for grid-connected PV power volume according to Qinghai coal-fired generator desulfuration grid-connected benchmark power price (RMB 0.354/kWh). Such price is about RMB 0.106/kWh up the mean power purchase cost of the company. With the continuous expansion of solar power generation scale and the continuous increase of grid-connected power volume, the power purchase cost of the company will keep rising. Meanwhile, local governments in Qinghai Province will take low power price as main advantage in investment promotion, so the increment of power purchase cost can hardly be regulated by power sales price, and the company will be under certain operation pressure.
(6) Grid-connected power price and subsidy for solar power generation
First, grid-connected power price is unavailable or too low for solar power companies. At present, the state hasn’t launched grid-connected power price for CSP yet, as weakens the confidence of power companies in CSP station investment and construction. In the exposure draft of Notice of
Perfecting PV Power Price Policy issued by National Development and Reform Commission in Mar
2013, Haixi Region of Qinghai Province is identified as I class resource region at grid-connected PV power price of RMB 0.75/kWh less than existing price by RMB 0.25 to 0.4/kWh, and power companies widely think the new grid-connected power price is too low for them to make profit.
Second, late grant of subsidy for solar power generation. Normally subsidy is granted at least 1 year later than power price settlement, as seriously affects amount of current capital and aggravates repayment pressure.
III. Related suggestions
(1) To formulate scientific solar power development plan. Scientific aggregate objective for medium and long term solar power development shall be formulated in overall consideration of resource conditions, financial subsidy, power price acceptability for social and economic development, consumption capacity of power system, etc. Once medium and long term development
162 Study of market potential of CSP in China objective is determined, unless any major condition changes significantly, aggregate objective shall not be frequently adjusted, otherwise solar power generation may be blind and have difficulty in consumption.
(2) To appropriate subsidy for solar power generation and perfect grid-connected power pricing mechanism. It’s recommended to improve fund approval and subsidy grant efficiency for renewable energy, shorten grant time, and fill in fund gap by diversified means such as levy increase, special fund appropriation and extra charge increase. Meanwhile, it’s recommended to refer to similar experiences of Germany and other countries, further perfect grid-connected power pricing mechanism for solar power generation and preset the yearly adjustment rate of grid-connected power price to reduce market uncertainty.
(3) To enhance the construction of peak-shaving power supply. In the short run, natural gas-fired power station shall be constructed for PV peak-shaving by virtue of ample natural gas resource in Haixi Region, moreover, stability and economicalness of PV power transmission passage shall be enhanced to relieve the difficulty caused by long distance PV power transmission to power grid operation and management. In the long run, on the premise of being economical and feasible, the construction of CSP stations with heat storage shall be enhanced for peak-shaving of PV power stations.
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