China’s Five-year Plan & Renewable Energy – A Detailed Explanation

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A detailed explanation of the 12th Five-year Plan : What has changed and what hasn’t for the new energy industry

During the 11th Five-year Plan China’s new energy industries like wind power, solar power, bio energy and nuclear power developed extremely fast, the industries continuously increased their scale and moved up the industry chain, industry policies also gradually improved. In the next 5 years China’s new energy industries will continue strong development with support from government policies and new energy technologies. The “New energies industry development guidelines” submitted to the State Council in 2010 is currently awaiting approval, one difference from the 11th Five-year Plan is that the new energy industry has expanded from just development of new resources like wind, solar, bio and nuclear, it now encompasses resource usage technologies like clean coal technology, the smart grid, and even non-conventional gas resources like coalbed methane and natural gas hydrocarbons. The biggest change is the scope and fields encompassed by the new energy industry, more detailed changes and consistencies can be found in the details for development of each specific field.

Thermal solar energy – Market application will continue to expand, solar thermal power generation will suddenly emerge with strength

During the 12th Five-year Plan China’s application of solar thermal energy will continue to expand with opening up the engineering, agricultural and international markets as the main three markets targeted for thermal solar energy in the 12th Five Year-plan. In the engineering market integration of solar power with structures and concentrated solar heating will be the 2 big sectors. The 12th Five-year Plan will bring China great advances in thermal solar electricity generation, with support from government policies thermal solar power stations will achieve technological breakthroughs. Before the end of the 12th Five-Year plan thermal solar power generation will achieve preliminary commercialization.

Solar Photovoltaics – Continued manufacturing strength of solar cells, fast paced growth of domestic market

In 2010 Chinese solar PV manufacturing capacity was over 8GW, accounting for 53% of total global manufacturing capacity, within the 12th Five-year Plan time frame China will continue to maintain its position as the global leader in solar PV manufacturing. At the same time through support of government policies the domestic market for application will grow quickly. China’s “both sides abroad”(foreign technology imported and products exported to foreign market) situation will be improved within the 5 years, it is estimated that by 2015 China’s total installed solar capacity will reach 5GW.

Wind power – Industrial scale will continue growing with focus on simultaneously developing “quality and quantity”

The next five years will continue the high speed growth of the 11th Five-year Plan, by the end of the 12th Five-year Plan total installed capacity has the potential of reaching 130GW. Wind power equipment manufacturing ability will also improve significantly. Unlike the 11th Five-year Plan’s goal which solely focused on installed capacity, the 12th Five-year Plan will focus on both quality and quantity. Following the past few years of fast paced installation of wind power capacity, emphasis on quality is without a doubt the necessary path for healthy development of the wind power industry. At the National Energy Work Conference held on January 6th when Zhang Guobao, Director of the National Energy Administration at the time, spoke about the 12th Five-year Plan, he repeatedly used terms like “grid integrated capacity” and “total actual power generation”, clearly surpassing the 11th Five-year Plan’s limited aim of just installed capacity.

Nuclear power – Continued fast paced development, nuclear facilities will develop from coastal regions moving inland

The development of China’s nuclear power industry can be divided into three stages, preliminary, fast paced and mature: pre 2000 was the preliminary stage, during this period China got a grasp on nuclear design, manufacturing and construction technology fundamentally realizing proprietary design and domestic manufacturing; 2000-2020 is the fast paced development stage, China has entered the development and construction peak, building a fundamentally complete nuclear system; post 2020 will be the mature stage.

When compared with the 11th Five-year Plan, the 12th Five-year Plan will continue the fast paced development stage; It is estimated that between 2011 and 2015 the rate of increase in China’s installed nuclear capacity will be over 30%, from 2010 levels of 10.8GW to 43GW in 2015. Third generation AP1000 nuclear technology will be an important direction in China’s nuclear development. Currently second generation CPR1000 technology is the most common among completed nuclear projects and nuclear projects under construction, but in planned nuclear projects the third generation AP1000 technology is used much more than CPR1000. Geographical development of nuclear projects will build on the fast paced development in coastal regions such as Liaoning, Shandong, Jiangsu, Zhejiang and Fujian and gradually move into central regions such as Jiangxi, Hunan and Anhui, forming the “central/eastern nuclear belt”.

Bio energy – No change in clean high efficiency application, industry policies and standards will be improved

The aim of modern bio energy development is high efficiency clean usage, converting bio mass in high quality energy resources, including electricity, combustible gas and liquid fuel. Estimates are that by 2015 China’s bio mass power plants will reach installed capacity of 7.2GW, production capacity of bio mass liquid fuel will reach 7 million tons, usage of bio gas will reach 24 billion cubic meters and solid biomass fuel will reach 1.2 million tons. In 2010 the General Administration of Quality Supervision, Inspection and Quarantine of the People’s Republic of China(AQSIQ) and Standardization Administration of the People’s Republic of China(SAC) published the B5 standards for biodiesel and biofuel in November 2010. On December 26th 2010 the State Taxation Administration announced consumer tax exemption for pure biodiesel produced from waste animal and plant oils. This demonstrates that industry policies and standards for biomass will gradually come out, relevant shortcomings in industry policies will be resolved within the 12th Five-year Plan.

Clean coal technology – Continued promotion of technological innovation, with focus on polygeneration technology

Of China’s energy consumption portfolio, about 70% of primary energy relies on coal and about 80% of power generation is from thermal power generation, in the next five years it would be very difficult for coal to drop below 60% of primary energy consumption. During the 11th Five-year Plan China held clean coal technologies in high regard, mainly focusing on coal processing, high efficiency clean coal burning, coal conversion, pollution control and waste processing. In the 12th Five-year Plan China will continue developing clean coal technologies but it will no longer hang solely on technological R&D and application, it will place gasified coal through polygeneration at the heart of its clean coal application. Polygeneration is like combining the processes of chemical engineering and power generation, it can increase the efficiency of energy by 10-15%, and at the same time sale of chemical products can decrease power generation costs, chemical production and power generation can also be be adjusted according to demand.

Non-conventional natural gas – fundamental technologies still the focus, increase of scale of application will pick up speed

Non-conventional natural gas mainly includes natural gas resources such as coalbed methane, shale gas and natural gas hydrocarbons that using mature technologies and current systems cannot be exploited economically. As for coalbed methane, China has already formed some proprietary exploration and development technologies, but shale gas and natural gas hydrocarbons technologies are still in early stages. China will still be the in beginning stages of non-conventional natural gas exploitation for the next few years. Work will continue to be focused on technological R&D of non-conventional natural gas exploitation to build a solid foundation for the next stage of commercial application. But in facing strong demand in the natural gas market in the future, the scale of coalbed gas and other non-conventional natural gas usage will be increased in the 12th Five-year Plan, it will be a large increase when compared to the 11th Five-year Plan.

The smart grid – Entering the full scale construction stage, continued attention to ultra-high voltage

In May 2009 the State Grid put forward the idea of developing a Chinese style strong and reliable smart grid. The trend of continued development of a strong and reliable smart grid will not change much in the next 5 years. At the same time ultra-high voltage transmission has always been a focal point for smart grid technology. During the 12th Five-year Plan smart grid construction will go from a planning and pilot projects stage to a full scale construction stage, during this period heavy construction of ultra-high voltage transmission will continue. Building on the ultra-high voltage transmission backbone, there will be full scale promotion of all links in the smart grid, a massive market for smart grid equipment will appear. The State Grid will speed up construction of rural and urban power grid systems and begin forming smart grid operation control and service systems, core technologies and equipment will achieve breakthroughs and broad application.

Overall, the 12th Five-year Plan is centered on emerging energies. When compared with the 11th Five-year Plan the biggest change in the new energies industry is increased technological levels, optimized industry structure and moving up the industry chain, it doesn’t just focus on increasing scale.