BEIJING--(BUSINESS WIRE)--CCID Consulting Co., Ltd. (HKSE:08235):
China’s new energy industry policies are going specific and promoting structural adjustments.
In recent years, China’s new energy laws, regulations and policies have become increasingly specific, represented by the earlier general goals and the recent segment-specific growth approaches. For example, Law of Renewable Energy, Medium and Long-term Planning for Renewable Energy Industry and 11th Five-year Plan for Renewable Energy Industry were launched a few years ago to set the principles, goals and focuses of the new energy industry during the 11th Five-year Plan period (2006-2010), while after that, China has seen the release of specific policies for the wind power industry that cover various aspects including project construction, fund management, industrialization, grid electricity price and industry threshold.
During the past two years, structural adjustments are also becoming a focus of China’s policies. In 2009, the state’s ministries for the first time worked out a series of policies on the development of the photovoltaic industry. In 2010, Decision on Accelerating Development of Strategic Emerging Industries recognized the new energy industry as one of the country’s strategic emerging industries, as well as one of its pioneering industries in the national economy. Moreover, the Industry Structural Adjustment Guidance Directory (2011 Edition) issued in June this year put the new energy industry in the Encouraged category for the first time, with a priority on solar energy and biomass.
During the 12th Five-Year Plan period, China’s new energy market will see a fast growth along with industrial adjustments.
During the 12th Five-year Plan period (2011-2015), China’s new energy industry will continue to see a fast growth on the whole, while the focus of development will shift from wind power to diversified new energy resources. For example, solar energy will see the fastest growth, and biomass will hopefully see a large-scale start-up.
（1） Wind Power: Steady Growth in both Quality and Quantity
China’s power industry has been quite well developed after a decade of growth. Now it has a leading industrial size in the world, and plays a vital role in China’s new energy industry. In the coming five years, the major challenges for China’s wind power industry will be the grid integration of wind power and operation security.
Figure 1 Forecast on China’s Accumulated Installed Wind Power Capacity and Growth Rate in 2011-2015
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Source: CCID Consulting, January 2011.
（2） Solar Energy: Joint Ventures between the State-owned and the Private for Fast Growth
With the deteriorating overseas photovoltaic investment environment, China’s domestic photovoltaic industry policies are becoming more supportive. During the next five years, China will become one of the fastest-growing countries in the global photovoltaic market, which means China’s photovoltaic industry will move to focus on the downstream applications instead of the upstream manufacturing facilities. Lying in the center of the domestic photovoltaic companies’ strategies is how to obtain more project investment opportunities with the help of the state-owned power giants and investment groups’ abundant resources. In future, joint ventures between the state-owned and the private will be a major trend in China’s photovoltaic market.
It is estimated that the domestic photovoltaic market will see a blowout growth in the coming two years. After a steady growth from 2013 to 2015, China’s installed photovoltaic capacity will hopefully exceed 10GW.
Figure 2 Forecast on China’s Accumulated Installed Solar Capacity and Growth Rate in 2011-2015
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Source: CCID Consulting, January 2011.
（3） Nuclear Energy: Steady Progress with Safe and Efficient Utilization Concerns
In the context of the Fukushima nuclear accident in Japan, safety and efficiency will be the top challenges for China’s future nuclear power plant projects. Up to now, 30 new nuclear power generation units have already obtained the state’s construction license, and their construction will suffer little impact from the Fukushima accident. However, other new projects will have to fulfill the state’s strengthened location, design, operation and quality assurance requirements in future, which will result in a prolonged application and examination procedure.
Currently China has a total of 10.81 million kilowatts of installed nuclear power capacity in operation, along with another 64 million kilowatts under construction. By 2015, its total installed nuclear power capacity is estimated to reach 43 million kilowatts. The year 2013, 2014 and 2015 will each see an addition of 8, 8 and 10 units, with an added installed capacity of 8 million, 10 million and 11 million kilowatts respectively.
Figure 3 Forecast on China’s Accumulated Installed Nuclear Power Capacity in 2011-2015 (unit: 10 thousand kilowatts)
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Source: CCID Consulting, January 2011
Challenges and Solutions for China’s New Energy Industry
Despite the rapid growth, China’s new energy industry have seen plenty of challenges in recent years, including the grid integration of new energy projects,, the safety issues brought by grid integration, as well as the nuclear safety issues exposed by the Fukushima nuclear leak.
CCID Consulting believes that these challenges can only be well addressed by improving the existing new energy industry policies and standards as well as increasing investment in and enhancing management of the new energy technologies.
（1） Enhancing the New Energy Power Generation Quota System to Expand Market for New Energy Power Generation Projects
According to China’s Medium and Long-term Planning for Renewable Energy, for an investor that owns a total installed capacity of over 5 million kilowatts, the proportion of installed non-hydro renewable energy capacity is required to exceed 3 percent by 2010 and further exceed 8 percent by 2020. However, the planning is binding on only the power plants, but not the downstream power grids. Therefore, the power grids are still reluctant to purchase new energy-fired electricity, which causes difficulty in the grid integration of the new energy projects.
The solution will be the state’s improved new energy quota system that involves both the power plants and power grids, with specific quotas and purchase prices for each power grid.
（2） Enhancing Industry Standards and New Energy Project Operation Reliability Management
China needs to improve its new energy industry standards according to the industry planning. The standards shall cover new energy project threshold, design, operation, quality and maintenance. Meanwhile, the pre-qualification and operation reliability management shall also be enhanced.
（3）Accelerating the Construction of Demonstration Projects
It is advised that the governmental authorities carry out demonstration projects with specified technologies, management approaches and operation parameters to detect the possible defects before the construction of large-scale new energy projects.
About CCID Consulting Co., Ltd.
CCID Consulting Co., Ltd. (hereinafter known as CCID Consulting), the first Chinese consulting firm listed in the Growth Enterprise Market (GEM) of the Stock Exchange of Hong Kong (HKSE: 08235) and the first consulting firm which gets ISO 9001 international and national quality management system standard certification, is directly affiliated to China Center for Information Industry Development (hereinafter known as CCID Group). Headquartered in Beijing, CCID Consulting has so far set up branch offices in Shanghai, Guangzhou, Shenzhen, Wuhan and Chengdu with over 300 professional consultants after many years of development. The company’s business scope has covered over 200 large and medium-sized cities in China. With its powerful industrial resources, information technology and data channels, CCID Consulting provides customers with public policy establishment, industry competitiveness upgrade, development strategy and planning, marketing strategy and research, HR management, IT programming and management services. The company's customers range from industrial users in electronics, telecommunications, energy, finance and automobile to government departments at all levels and diversified industrial parks. CCID Consulting commits itself to becoming China's No.1 advisor for enterprise management, No.1 consultancy for government decision and No.1 brand for informationization consulting.