Jump intorenewable energy

industry!

Zhou YC, Tang SJ, Zhang XT present

Nankai University 2007.5

Why renewable energyIndustry curiosity• Drainage of fossil fuel including oil and

gas• Environment enforcement to curb the

CO2 emissionGovernment endorsement• Central government’s long term plan and

determination to develop the renewable energy

Reality and outlook• The start-up phase compared with other

countries The renewable energy account for 0.1%

of total energy consuming in 2005• Target for year 2020:renewable energy

account for 30% of the electrical power supply

• The annual increasing rate of renewable energy over 25%

Via China Renewable energy medium-and-long-term development plan

Government focus on the big four

biomass, wind, solar and water

0500

10001500200025003000

Biomass（TTkW）

20062020

00. 5

11. 5

22. 5

3

water（HMKw）

0500

10001500200025003000

Wind（TT Kw）

0

50

100

150

200

Solar（TT Kw）

Government-led technology trend

Economic Factor• Renewable electricity price excess

average is borne equally by all end-users.

• Partially tax concession.• Partially subsidies. • Small hydro power could receive

long-term loans from National Development Bank.

Biomass industry• Biodiesel

– Target:The demand mount of Biodiesel will reach 20 million ton in 2010.

– Main player CNOOC, Beck fuel– Many projects

The total products of the projects constructed will be about 3 million ton

600,000 TonGuofengoil

750,000TonQingjiang Bioenergy

Smaller project

Biomass industry• Bioethanol

– Target The demand amount of fuel ethanol will reach 4,500,000 ton per year in China .

– Main player

CNPC COFCO

The total products is about 1.02million ton at present

Others

Windindustry policy• Wind power concession project

– Start at 2003, totally four times till 2006, 3 mKW

– Still improving, with balace on low price and industry growth

• Equipment manufacturing localization– In newly build wind farm, more than 70%

of local equipment manufacture is needed.

… industry insiders believed that at that

time(2020), it could be 170 million kilowatts.Arthouros Zervos

Chairman Global Wind Energy Council

Wind industry• Main player in wind farm business

– Big five State-owned power companies: China Guo Dian, LongYuan Group, DaTang Group, etc

– Private company: Farsighted Group– International companies: Airtricity

• Main player in wind turbine manufacturing business– International manufacturers: Vestas, Gamesa,

Enercon, GE Energy– Domestic manufacturers: XinJiang Goldwind

Solar industry

If the horse can not catch upon the sun, I will put the sun on the back of horseKhazaks herdsman use solar photovoltaic cell to generate power

Target : Five times that in 2005 Dominate in the western rural area

Three players in Photovoltaic : GE, BP solar, SunPowerOne dominate player in Solar heating : HuangMing

Hydro power industry• Target

– Small hydro schemes are particularly popular in China, which has over 50% of world small hydro capacity.

• Challenge– Unsettled in the preferential policy for this

industry• Main player

– World’s first class equipment manufacturer– Large influx of private capital recently.

Which industry? Screening criteria– Market

• High market potential, rapid development in industry commercialization– Technology

• Large room for technology advancement and reasonable knowledge transfer feasibility

– Finance• Stable revenue and high-rewarding profit in the future

– Competition• Permission of foreign capital and no monopoly from domestic

• Portfolio Optimization of the investment– Biomass Replace the existing oil esources

in the future automobile world.– Wind Clean, centralize power

generation in this century.

Biomass Wind Power Solar Hydro

Market √ √ × √Technology √ √ √ ×

Finance √ √ × √Competition √ √ √ ×

Biomass feasibility plan• Main business area

– Direct investment on biodiesel & bioethanol– Define the business role as producer

• Main action– Establish joint venture with state-owned company

Setup refine factory– Research on suitable material and it’s refinery

technology– Seek stable and diversity material supplier– Cooperate with automobile industry to

commercialize biofuel.– Set up nationwide distribution channel– Eye on international demand

Wind feasibility planShort term action

• Setup wind farm operation company– Participate in wind power concession project– Contact local government to operate small

wind farm• Onshore & near-shore farm operation

– Investment: 8000~10000RMB/kilowatt– Runtime: 20 years– Electric sell price: about 0.477RMB/watt in

past concession project

Wind feasibility plan Medium-and-long-term action

• Purchase a manufacturer– To get the core technology– To cut down equipment price

• Operation large-scale offshore wind farm– More wind power generation– Longer wind turbines life– High technical threshold

ThanksTo join with SK in China together