THE ENERGY INDUSTRY TIMES - NOVEMBER 2017
Asia News 5
China counts
cost of clean
energy funding
n Clean energy subsidy shortfall could hit $30 billion
n Plan to promote large-scale storage
Syed Ali
China may struggle to pay billions of
yuan in subsidies to clean energy companies,
with the shortfall set to quadruple
by 2020, according to a government
official.
The total shortfall by 2020 will be
Yuan200 billion ($30.2 billion), up
from Yuan50 billion last year, said
Dongming Ren, Director of the National
Development and Reform Commission’s
Energy Research Institute,
speaking at an industry conference.
“The shortfall will continue to widen
if China keeps its current renewable
policy of fixed power prices unchanged,”
he said.
China is the world’s biggest energy
consumer and has vowed to increase
the use of non-fossil fuel to 15 per cent
of its total energy mix by 2020 and cap
its carbon emission by 2030 as part of
its effort to wean the nation off coal
and fulfil its climate change pledge.
The widening gap in subsidies, however,
underscores the cost of funding
the country’s ambitious renewables
push and the need for policy change.
Moody’s Investors Service warned in
September that the dependence of
China’s renewable sector on government
subsidies will be one of the main
near-term challenges for clean power.
To ease the government’s financial
burden and reduce the amount of wasted
power, China has cut subsidies for
new large-scale solar and onshore wind
power projects and set capacity limits
in regions with high wastage rates.
It also introduced a green electricity
certificate system in February and aims
to enforce a compulsory quota system
on coal-fired power plants in 2018. The
country also plans to launch a nationwide
carbon emissions trading system
this year, although Ren noted that plan
is delayed into 2018.
“China needs to expand the source of
renewable subsidies, otherwise it would
be very difficult for clean energy to
compete with coal, especially before
environmental costs are showed on
coal-fired power prices,” said Ren.
In October, the country said it would
boost its large-scale energy storage
capacity over the next decade in a major
push to solve the problem of stranded
power in the west. While China has
led the global push to increase the use
of wind and solar power in recent years,
getting clean energy from western regions
to urban users has been a major
problem.
A key part of the plan is to issue subsidies
to energy storage companies to
spur the construction of new powersaving
facilities, according to a statement
issued by the National Development
and Reform Commission
(NDRC).
The government will launch several
pilot projects to test advances in energy
storage technology.
Taiwan ramps up clean energy
Bangladesh has secured billions of
dollars in international funding for
projects that will significantly boost
its energy sector.
Last month Dhaka and New Delhi
signed a $4.5 billion credit agreement
with a provision for spending nearly
a quarter of the amount on Bangladesh’s
first nuclear power plant at
Rooppur.
The deal sees India become a party
to the civil nuclear programme to be
implemented by Russia. Russia is
building the plant and also providing
credit of $12 billion for the project.
Indian Finance Minister Arun Jaitley
said the agreement marks the biggestever
line of credit New Delhi has
given to any country. Around $1 billion
will be spent on infrastructure development
for power evacuation facilities
for the Rooppur plant.
The country’s electricity grid received
a further boost with the news
that Sweden’s government would invest
$1.0 billion to modernise and
digitalise the network in order to
make the system more reliable and
efficient.
State Minister for Power, Energy
and Mineral Resources Nasrul Hamid
said: “The government is committed
to improving the power system by
setting up new power plants and
strengthening transmission systems
through new space saving substations
and adopting digital power management
solutions.”
Hamid was speaking at the signing
of a Memorandum of Understanding
between the country’s power sector
officials, the Swedish government and
ABB Limited to increase technical
collaboration, knowledge-sharing and
introduce technological solutions.
In September, Hamid said the country
is interested in building an interconnection
with Myanmar, explaining that
the connector would pave the way for
electricity exchange between China
and Asean countries.
Copenhagen Infrastructure Partners
P/S (CIP), China Steel Corp (CSC)
and Diamond Generating Asia Ltd
(DGA) will work together to develop
and build a 50-turbine offshore wind
farm in Taiwan. The project will have
a generating capacity of 500 MW.
The companies have signed a memorandum
of understanding (MoU) for
their collaboration in offshore wind
zone 29, west of Changhua County.
The project received conditional approval
for its environmental impact
assessment at the end of September.
According to the daily newspaper
DigiTimes, Mitsubishi Corp’s unit
DGA is to supply wind turbines for
the project, while CSC will produce
key elements for the steel foundations.
CIP, meanwhile, will be responsible
for financing, project development
and management.
In early October, CIP officially unveiled
its office in Taiwan and said
that it is currently developing three
offshore wind projects in the country
with a total capacity of up to 1.5 GW.
All three are to be located west of
Changhua.
Offshore wind farm development is
part of Taiwan’s move to cleaner energy
production.
At the start of October Neo Solar
Power Corp. secured a deal to build
and operate the nation’s biggest superhigh
voltage, ground-mount solar
power plant. The solar farm in Changhua
County will have a capacity of
40 MW.
Bangladesh secures significant
international investment
South Korea
energy roadmap
plans stumble
South Korea’s plans to shift its reliance
from coal and nuclear power to natural
gas and renewable energy received a
blow last month following a public
opinion survey that showed a majority
of almost 60 per cent were in favour
of resuming the construction of two
stalled reactors.
President Moon Jae-in, elected in
May, now says the country would resume
construction of the Shin Kori 5
& 6 nuclear plants, with nuclear
phase-out delayed to 2060.
With the two reactors set to be completed
in October 2021 and October
2022, according to state-run nuclear
operator Korea Hydro & Nuclear
Power Co. (KHNPC), Moon said
safety standards for nuclear plants
would be ramped up.
Moon also reiterated his plan to shut
down the Wolsong No. 1 nuclear reactor,
the nation’s second oldest, once the
government confirms stability in energy
supplies. This announcement
came as KHNPC said that roughly 110
kg of coolant has been leaking daily at
the plant’s Unit 3 and that the amount
is increasing. It stressed, however, that
there are no radiation leaks.
South Korea operates 24 nuclear reactors
that generate about 30 per cent of
its electricity, while coal and renewable
energy provide 37.5 per cent and 6.7
per cent, respectively, according to the
ministry of trade, industry and energy.
The new government had set out an
energy policy designed to keep pace
with the changing energy environment
and growing safety concerns
following the 2011 Fukushima nuclear
disaster and the nation’s largestrecorded
September last year.
Commenting on the decision to
P10603TEI
earthquake in Gyeongju in
resume construction of the nuclear
plants, Wood Mackenzie said LNG
exporters will be disappointed. Wood
Mackenzie, a research and consultancy
business for the global energy,
chemicals, metals and mining industries,
estimated that full implementation
of Moon’s election promises could
have resulted in around 10 Mt of extra
LNG demand by 2030. This now
seems unlikely, it says.
“The decision to continue with nuclear,
may make it easier for the government
to implement some of the
other election promises. Increasing
renewable capacity to 20 per cent by
2030 will require subsidies. Displacing
coal with LNG will increase fuel
purchase costs. Maintaining nuclear
makes anti-coal, and pro-gas and renewable
policies more achievable,
without putting too much upward pressure
on electricity prices,” it stated.
“With the planned nuclear phase-out
delayed, it will be interesting to see
whether more aggressive anti-coal
policies are enacted.”
Last month the government imposed
emission standards on eight private
coal power plants under construction
that are stricter than those in Germany
and Japan. Permissible SOx emission
levels were set at 15 ppm, which compares
with 39 ppm for Japan and 70
ppm for Germany. The level for NOx
was set at 10 ppm, while the comparable
figures for Japan and Germany
were 34 ppm and 97.4 ppm.
n Korea Electric Power Corporation
recently held a ceremony marking the
completion of the world’s largest
1 MW carbon dioxide separator demonstration
Power Plant headquarters of Korea
East-West Power Company.
2017 HIGHLIGHTS
plant at Dangjin Thermal
www.indonesiapowerconference.com