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Keeping Self-Motivated Forward in the Process of Developing Commercial CSP Projects in China

Report from CSPPLAZA

By Summer Yang

Updated: 20-July-2015

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photo:SHOUHANG’s 10MW molten salt tower plant, located in Dunhuang, Gansu province, being under construction now 

Chinese commercial CSP projects are facing the various obstacles from technologies, policies and experience, etc. How to make a breakthrough? We must seek out a breakthrough by means of build commercial plants. In this sort of contradiction and entanglement, we can do anything but wait, only when we are encouraged to go forward can we finally welcome a bright future.

Hazy Policy

It is easier for the emerging industries to usher an explosive growth in China, which is demonstrated by the rapid expansion of wind power and the installation capacity of PV in the field of new energy. Therefore, we regularly expect that the CSP industries in China could repeat a history of explosive growth, but what we should recognize is that we must keep this expectation with more rational brain.

China International CSP Station Conference & CSPPLAZA 2015 Annual Meeting was held on 25-26th, June, 2015, in Beijing. Liang Zhipeng, Deputy Director General of the Department of New and Renewable Energy for China’s National Energy Administration emphasized on the conference: “The determination of developing CSP in      China is constantly firm, our aspiration is to start the industrialization and commercialization of CSP project on China as soon as possible.”

But the macroscopic guideline could not affect the current industrial process directly. To the whole CSP field, the most anticipated thing is still the specific detailed policy. The anticipation of the policy tends to go rationally after two years of anxious wait: we have to enact the specific detailed policy of commercial demonstration project as a result that it’s not the right time to unified tariff support policy.

But at this point, the attitude of the governmental policy-makers still seems hazy. Rounds of preliminary research work intending to stimulate policy releasing has been done, including research of pricing policy, census of developable resources, the draw up of the demonstration project implementation plan, etc. We can say we already had the foundation asking for policies to support demonstration projects, but we still got no clear signal of policy until now.

“The Energy Administration has always been actively promoting the construction of pilot projects, and has also formulate the working plan and proposed the technical requirements. Although this work is not officially start, the work basis is in a good condition. Once the decision level releases clearly policy and ensure the scale of the recent construction, from my point of view, we can start the project in no time.” Liang Zhipeng said on the conference. But what he didn’t express clearly is phrase “in no time”, we don’t know what time and how soon it can be on earth, probably no one can get a precise idea of the decision level.

As for the reason why the policy has been put off so long, what Liang Zhipeng said may give an explanation to a great extent. “We should focus on how much CSP is contributing to the China Energy, it turns out maybe we will not strongly promote this industry as it is not so important if the contribution is tiny; but on the contrary, if it is of vital important to the energy, then we will fully promoted it.” Therefore, the most fundamental reason is that the “plate” of the current CSP and the function of the CSP in the future energy system are not so that remarkable.

If you see this problem from the viewpoint of policy makers especially electricity price makers, what the real earning bring about by support an industry of which they take into consideration? The new energy economy is flourished, to support such an industry like CSP as it had great technical difficulties, high cost, and minimum proportion of the entire new economy, even if it is doing well, they will insist that it has a limit effect of the whole energy economy, but if is not doing well, both for the individuals or organizations in policy making, may need to take the responsibility.

In the respect of the specific electricity price policy, NDRC Price Department holds the final pricing decision right; National Energy Administration in a largely part needs to offer a strong reason for introducing the price policy. Three points raised by Liang Zhipeng on the conference can be summarized as a whole: How deep could CSP influence regions on power-building? What’s the role of CSP plays in the whole power system? Once CSP electricity plays as peaking power source, how it could be competitive in terms of cost and reliability? These three aspects can be seen as the reason why Bureau of Energy has not yet received a satisfactory answer, and also can be seen as the reason for failed policies releasing.

If this is the reality, it is hard to anticipate the releasing of policy regarding CSP electricity price, especially the specific price policy.

Keeping Self-Motivated forward in the Process of Project Developing

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photo:SHOUHANG’s 10MW molten salt tower plant, located in Dunhuang, Gansu province, being under construction now 

“We have to make the special policies to support such an emerging and prospective industry like CSP,. First we need to build a commercial pilot plant to get through the industry chain.” Li Junfeng, the Director of National Center for Climate Change Strategic and International Cooperation said on the CSPPLAZA 2015 Annual Meeting.

Barely waiting for the policy is definitely not a wise choice. The illuminative has already clearly aware of this issue under the current industrial situation. Find ways to build pilot plants is the only option of break through the bottleneck of industry, because only in this way, can we answer the various questions from the government and prove the huge value of the industry itself.

Supcon Delingha 10MW tower demonstration plant got a 1.2 yuan PPA price, which set a precedent of “successful completion of the project approved tariff”. More ambitious private CSP enterprises began to develop pilot plant independently since last year. Currently, for Dunhuang 10MW tower plant, invested by Beijing Shouhang Resources Saving Co., Ltd, large parts of the installment of support pillars for heliostat have been finished , and will completed by the end of this month, and parts of the heliostat installment are finished. Other related facilities constructions of the project have been promoted at the same time. Beijing TeraSolar Photothermal Technologies Co., Ltd., together with CITIC Group Corporation and Shenzhen HuaQiang IndustrycO., Ltd, etc, planned numbers of CSP and cogeneration projects in Zhang Jiakou, a place in HebeiProvince. And among them one 15MW project is under construction currently.

In addition, many CSP projects dominated by private enterprise have obtained approval record. Royal Tech CSP, a China-based CSP equipment company is the developer of a 100MW CSP project in Wulate Middle Banner in Inner Mongolia. And the first phase of this project was approved by the local government in June this year, and was awarded ‘‘ Official Approval of Preliminary Work for Project Record’’. Royal Tech CSP plans to finish the preparatory work in the fourth quarter of this year, and meets the start-up requirement. DCTC, a China-based automation technology company, the developer of 10 MW fresnel CSP project in Dunhuang, Gansu Province, was awarded records from the Development and Reform Commission of Gansu province, and construction commencement ceremony of this project happened in May 2015. Recently, DCTC signed cooperation agreements with SINOPEC Star petroleum., Ltd and Investment Co., Ltd of Sinohydro Engineering Bureau N0.4 Co. Ltd, , aiming at promote the implementation of this project.

Besides, some private enterprises like Hebei Enfa Energy TechnologyCo., Ltd and Qinghai CSP electrical Group Co., Ltd are stepping in promoting the development t process of CSP or related projects, on a practical level.

Compared to private enterprises over the past years, central enterprises mostly occupy the resources related to CSP. But with the especially electricity price policy issue, related CSP projects development wandered.

At present, the only active project in the charge of central enterprises is Delingha 50 MW parabolic trough project, invested by CGN. And this project is also the only central enterprises’ CSP project that awarded approval in group level. On the CSPPLAZA Annual Conference held in June, 2015, Beijing, China, Qiu Hemei, the General Engineer of CGN CO., Ltd, said:“Our goal for this project is to build landmark project, to build high-quality project.”.

Even delingha 2*135MW tower plant, which is developed by  State Power Investment Corporation, and supported by “ China-US Framework on Energy Cooperation”, is now suspended with its construction. Because this project hasn’t received approval in group level until now, though all the pre-preparation work has been finished. It follows that the central enterprises hold a serious attitude towards investment decision- making for major projects. BiChengye, General Manager of Shnghai Electric&Brightsource(a sino-US joint venture) said to journalist of CSPPLAZA during the CPC2015 that:“As the EPC of this project, we in fact have given up the idea of making profit with this project. We do not earn any money, but to help the owner meet the financial approval requirement of this project. Our only wish is to make this project a landmark project in China”.

The success or failure of a large-scale CSP plant construction will deeply affect the industrial process of CSP industry in China, especially those projects financially supported by the government, and led by the central enterprises. Qiu Hemei and BiChengye have a deep understanding on this point.

The key EPC bid for solar field of Delingha CSP plant was repeatedly delayed, and the final issue of bidding documents was settled on 24th June, one day before CSPPLAZA Annual Meeting. The main reason for the delay is that the time and energy spent on standard version of bid technique exceed the scheduled. And this delay also demonstrated one fact that in the process of constructing a project with initiative meaning under the objective lack of issues regarding know-how and experience, complex difficulties emerge and more efforts are needed. In the future process of practical implementation, we should recognize this point, remember the lessons we learned form this delay, have a better understanding of what we lack, thus to better advance forward CSP in China.

We have to say that, it’s not the best time that CSP industry came into China, because with the government’s more and more rational concept in policy making, emerging industrial economy alone can not easily affect the government.( We know that FIT policy of PV was released by the government in 2011 in China, and since then PV burst as a hot industry. One of the reasons motivating the government to release policy to develop PV is that PV was an emerging industry.). So we have to say that currently, we need to depend on ourselves to fight for ourselves, to overcome all the difficulties, to show our practical activities and determination to the government, thus to effectively touch its nerve.

About lily Zhao

Hello, I'm Summer Yang, a senior jourmalist with CSPPLAZA. Nice to meet you dear guy...

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5 comments

  1. it is an interesting article.
    I like it! Hopefully this article will wake up some decission makers to take action.

    • Dear Miroslav, thank you for your wish. Your wish is the common wish of people in CSP industry.Let’s give our best regards to CSP industry, a green industry that will bring much benefits to our mother earth and to we humans.

  2. Another big tower in China, great work!

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