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2. Analysis on Electric Power Network in China (Grid/Off-Grid)
2.1 Electric Power Policy in China
The result of the China Electric Power Industry the 9th Five-Year Plan, and summary of
Tenth Five-Year Plan are reviewed below as the policy regarding the Chinese power (distribution)
grid.
2.1.1 Result of The 9th Five Year Plan
Since the 9th Five Year Plan, electrical industry has developed quickly. The annual average
increase rate of power generation unit capacity is 8%. This fundamentally eased the severe
electricity shortage which had existed over the long period of time. Therefore, the bottleneck of
national economy of electric power and social development have been solved. National power
generation unit capacity amounts to 319.3GW, among those the water-power generation occupies
24.9% by 79.4GW, thermal power generation occupies 74.4% by 237GW, nuclear power
generation occupies 0.7% by 2.1GW, and alternative energy power generation, such as wind force
and solar energy, is approximately 330,000kW in the end-of-the-year 2000.
The annual amount of power generation is 1.36 trillion kWh, and each of power generation
unit capacity and power generation amount is ranked as the second in the world. In regard to the
power transmission network, the power line over 220kV reaches to 164,000km in entire country,
and 500kV power line is 27,000km among those. The transformation capacity of 220kV and over
is 410 million kVA, among those, the transformation capacity of 500kV is 94 million kVA. The
500kV direct-current power line is 1,045km, and rated conversion capacity was set to 1.2GW
Excluding Hong Kong and the Macao area, seven electric power networks of Inhuabei,
Dongbei, Huadong, Huazhong, Xibei, and Sichuan/Chongqing, the south mutual connection
electric power network over province and the five independent electric power network of
province classes such as Santo, Fuchien, Xinjiang, and Tibet, were already formed. Excluding the
fact that voltage class of chief editor power line of northwest electric power network is 330kV, the
electricity net and the Shandong electricity net which stride the other provinces have already
constructed the chief editor transmission network of 500kV. Unit capacity of the Huadong
electricity net exceeds 50 million kW. Unit capacity of nation’s largest thermal power plant is 22.4
million kW, and 3.3 million kW for hydro-electric power station, 1.8 million kW for nuclear
power plant. Development of electric power network rushed into the new stage of large zone
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electric power network and mutual connection of autonomous region electric power network with
implementation of Shangxia power transmission transformation project and the electric power
network connection project of a northeast and Huabei. The rate of a power line loss in 2000 was
reduced to 7.7% from 8.8% in 1995.
On the legal side, the framework of the electric power regulation which considers relative
administration electric power rule and district electric power regulation group as a supplement
was fixed on the basis of the People’s Republic of China electric power method enforced since
April 1, 1996 depending primarily on electric power institution protection regulations, the
management regulations of electric power network arrangement adjustment, and electric power
supply and utilization regulations,
However, the 9th Five Year Plan raised subjects in which the bottleneck still existed for
resource assignment in local areas due to poor electric power networks as a result of overdue
construction comparing with power supply construction. Since arrangements of power
transmission and power distribution of electric network, high-pressure and low-pressure, primary
and secondary stage were not cooperated, these have given influenced although the difference of a
grade in the safety and stability, and economical employment of an electric power network exists.
Moreover, it is a subject that the rate of power transmission loss is also 2 to 3 points high
compared with advanced nations.
2.1.2 The 10th Five-Year Plan
■ Outline
The importance of the 10th the Five-Year Plan for 2001 - 2005 is a conversion into an
improvement and efficiency of quality from emphasizing on the amount increase of power
generations and plant scales
A strategy important in the 10th the Five-Year Plan is West-to-East Electricity Transmission
Project. Chinese energy resources are mainly concentrated on the western area. 60% of coal
resources focus on Shanhsi, Shaanxi, and Nei Monggol, and others are in provinces in the
Midwest, such as Henan and Kueichou. Moreover, most of underdeveloped water-power
generation resources are located mainly on southwest, the midstream-upstream area of Yellow
river. However, Chinese economy and the load of population and electric power use are
concentrated on the eastern part coastal region. For this reason, development of western electric
power resources, especially western water-power resources, and implementation of West-to-East
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Electricity Transmission Project (transmitting western electricity to an eastern part) do not only
promote development of western economy, but also ease the energy shortage, acid rain problems,
and pressure on environmental preservation within SOx/NOx regulation zone.
A remarkable difference exists in the electric power supply-and-demand situation of each
district, as well as a fundamental balance of the total amount. The Dongbei electric power
network, the Fujian electric power network, and the Hainan electric power network have the
remarkable excess of an electric power unit. The Huazhong electric power network, and
Szuchuan and the Chongqing electric power network have the large specific gravity of
water-power generation, furthermore its accommodation capacity is low. And its electric power
excesses during wet season. The electric power supply demand of Huabei electric power network,
Huadong electric power network, the Shandong electric power network, and the Kuanhsi,
Kueichou and the Yunnan electric power network maintain a balance fundamentally. In the
electric power network, the phenomenon of short supply has appeared in the local area, and the
tight condition of an electric power supply has appeared at the peak term of power consumption
with the Kuangtung electric power network since 2000.
It is expected that the difference in the demand-and-supply balance between each electric
power network is reduced one by one, by implementation of mutual connection of 15 periods,
macro adjustment and an electric power network. According to elementary analysis, the
oversupply of the Dongbei electric power network and the Hainan electric power network will
also remain during a fixed period of time from now on, and the problem of the short supply of a
local area such as Kuangtung, Chehiang, and southern Heibei may still be severer in early stages
of 15 periods. For other areas, demand-and-supply balance will be held fundamentally.
The characteristic of electric power load produced a big change with economic development
and improvement in the people’s life standard level in these years. As the air-conditioner
increases, the influence to the power consumption load of temperature becomes larger. In a part of
province, the annual maximum load shifts from winter to a summer gradually. This resulted that
the wave nature of the growth of the annual maximum load increased. The trend shows each of
daily load rate and annual load characteristic values on each electric power network descends
over years. The growth of future load will exceed the growth of power consumption succeedingly,
the problem on peak adjustment will be projected day by day. Then the peak adjustment capacity
which the electric power network needs will increase every year. The problem on 15 periods and
electric power supply and demand mainly appears in the ability of shortage of peak adjustment
capability or the technical means of peak adjustment not to satisfy the safety of an electric power
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network, and the necessity for stability and economical employment.
■ Targets
The 10th Five-Year Plan sets strengthening of the electric power network construction and
promotion of the cooperation system of the national electric power network as the target. Adjust
power supply structure, fully utilize existing power generation capability, develop water power
generation and large thermal power generation for domestic coal, actively compress small
thermal power plants, develop nuclear power generation moderately and encourage cogeneration
and comprehensive utilization power generation. By developing alternative energy and renewable
energy power generation positively, comprehensive utilization technology is carried out
positively. Also the resources are saved and environment is protected. In order to fully equip with
the formation mechanism of a rational electric power price, reformation of electric power
organization is made to enhance as well as a gradual implementation of the electric network
system by price competition and separation of plant and the electric power.
During 15th period, the national electric power network shows substantial progress. By the
end of 2005, except for Xinjiang, Tibet, and Hainan, each adjoining electric power network will
realize a mutual collaboration system fundamentally, and electric power network structure will
become much more rational. And then it will have prevention ability for power failure accident in
large area. The national exchange direct-current circuit beyond 220kV and over reaches to
230,000km, and transformation capacity reaches 670 million kVA. Cooperation development of a
secondary system and a primary system heightens the capability of the whole communication
network dramatically. The reliability of a city electric power network reaches an average of
99.9%, in a part of important area attains to 99.99%. The rate of comprehensive power
transmission loss of an electric power network is minimized to 7% or less.
Basic policy of farm electrification “reconstruction of an electric power network,
reformation of electric power organization, realization of one prefecture-one company, the same
price” indicates to push the village electric power level into a new stage, and construct a stable
foundation for complete realization of village electrification within ten years. By completing
reformation of farm village electric power organization extensively, one prefecture-one company
will be realized. Power consumption amount per capita and living electric power amount per
capita in the prefecture and below prefecture will greatly grow. By connecting economical
development and wealth level of life, a series of electrified prefecture, electrified city and
electrified village will be established. By 2005, electricity will be widespread through villages
nationwide, and the number of non-electrified farmhouse will be reduced.
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For the electric power network, unification plan, unification construction, unification
management, and unification employment will be implemented. The resources input to electric
power network construction will be increased continuously. By reviewing the facts that
construction of an electric power network fell behind power supply construction, it implements
the cooperative development of the network and power supply; and then practices West-to-East
Electricity Transmission Project and a cooperative development of mutual system of the electric
power network and demand grid. A plan and construction of the secondary system will be
completed simultaneously.
Place emphasis on power distribution network construction, it is continued to construct and
reconstruct the electric power network. The power distribution network is optimized. City
network development is cooperated with a city construction. Operational monitoring level of the
power distribution network is promoted. Therefore the quality of electric power energy is
improved. The rural electric power network structure is strengthened and optimized. The electric
supply quality and the safety level of a farm village electric power network is raised. The loss is
reduced. Then it will adapt a construction of a small city, and development of farm village
economy and the demand of the people life level improvement.
3 main street of West-to-East Electricity Transmission Projectin a southern part, the central
part, and a northern part are strengthened continuously. Electric network mutual connection
project of seven subjects such as connection network of Dongbei and Huabei, connection network
of Fujian and Huadong, connection network of Xibei and Huazhong, connection network of
Huazhong and Huabei, connection network of Szuchuan and Chongqing and Xibei, connection
network of Shandong and Huabei and power transmission from Shangxia to Canton is completed.
At the same time, initial work of connection network of Shandong and Huadong is implemented.
Furthermore, major line of each power network will be reconstructed and fully equipped.
Assignment of power supply construction of an east-and-west part is adjusted, and the scale
of West-to-East Electricity Transmission Project is expanded further. Construction of the coal
combustion plant in eastern part area is controlled rationally, and West-to-East Electricity
Transmission Project is provided with market-space at the same time it accelerates the resources
development progress of western area.
The importance of south mutual electric power network system is the project which
transmits 10 million kW to Guangdong. Large-sized hydroelectric power stations such as Longtan,
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Xiaowan and Goupitan are built, and coal combustion plants are built suitably for the abundant
areas of coal resources. Mainly the third line from Tianshengqiaoto Guangdong, from Kunming
to Tianshengqiao through Luoping, three 500kV exchange power transmission transformation
constructions from Guizhou to Guangdong passing Guangxiand and two 500kV direct current
power transmission constructions from Shangxia to Guangdong are built.
The electric power network of the central part is keeping pace with construction of Shangxia
hydroelectric power station and building a series of construction of Shangxia power transmission
transformation significantly. Total scale includes 500kV of alternating current and 6,900km of
power transmission circuits, 500kV of direct current and 2,200km of power transmission circuits,
500kV of alternating current and 24.8GVA of transformation capacity, 12 GW of direct
conversion station total capacity. 60% of Shangxia power transmission transformation
construction completes during the 15th period. Opening of the power transmission passage of the
electric power of Sichuan to outside means that it built conditions for the power transmission to
the eastern part of the Szuchuan electric power.
A northern electric power network strengthens the power transmission to western Nei
Monggol and Beijing tianjin tangshan from Shanxi on the basis of three circuits of 500kV power
transmission circuit from Datong of existing Shanxi to Fangshan of Beijing, from Nei Monggol to
Changping of Beijing through Zhangjiakou. The power transmission capacity sent to the Beijing
tianjin tangshan area from western Nei Monggol by 2005 will exceed 2.7GW. In order to deliver
power transmission to Huabei electric power network, development of the hydroelectric power
station of northwest Yellow River upstream is accelerated and also the construction speed of the
coal mine Shanyuan plant of the north part of Shanxi and the NingXia coal base is accelerated.
As policy against electrification in the rural area, company system restructuring will be
implemented against the electric supply company in the prefecture class. Hydroelectric power is
developed and optimized. The small water-power generation with regulation capability is
supported. The rural electric power network is improved and duplication construction is
prevented. Electric supply quality and the quality of service are raised and a farm village electric
power price level is reduced. Then farmer’s burden is mitigated. The small dispersed electric
supply system is developed and constructed. This will solve non-electricity the power
consumption problem of the non-electrified farmhouse in the area where the electric power
network cannot cover.
Continue to expand foreign opening, the plan which uses foreign funding positively
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rationally and effectively is maintained firmly. Foreign loan is used positively. Advanced
technology and equipment are introduced, and the level of technical equipment of the whole
electric power industry is improved. Power plant and electric power network is separated.
Generated output is transmitted to the electric power network by price competition. Reformation
of loan investment organization of a country is progressed and linked. Management method of a
foreign funding utilization project is regulated further. Administrative examination ratification
process is reviewed and simplified. The investment environment in a foreign investor’s power
generation field is improved continuously, and entrance into the fair market competition of
foreign project is promoted.
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2.2 Outline of power network in China
Aiming at breaking down of monopolistic electric power organization with National Electric
Power Corp. at the top and at introduction of a competition market, the electric power
organization reformation centering on company separation of the plant and the electric power
network was advanced. The “State Electric Power Regulatory Commission (SEPRC)” aiming at
decision of the management rule of the electric power market, and the supervisor of market
management and maintenance of a fair competition was newly established as the organization of
State Affairs Administration under the direct control in November, 2002. Furthermore, national
electric power Corp. was reorganized in December in the same year. The new company was
founded and the new system started.
The new system classified the electric power properties under jurisdiction of national
electric power Corp. into an electric power network and power generation, and founded National
Electric Network Corp. and South Electric Network Corp. as electric power networks. Moreover,
five nationwide power generation companies of same scale were founded as a power generation
side while advancing construction of a local electric power market, an electric power dealings
center and an electric power market management rule, etc. At the same time, the power charges
innovation is delivered and competitive power transmission is realized gradually. In addition,
implementation of the direct supply into a large-lot user is taken into account in the area where
conditions will be settled in the future. By the organization reformation, improvement in the
efficiency of each property and reduction of a charge become possible. Furthermore it is supposed
that formation of open and sound electric power market will be progressed by achieving national
cooperation of the electric power network and fair competition. While the organization figure
before and after reorganization is shown below, the outline of the new system which inherits the
electric power property of National Electric Power Corp. is shown below.
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Figure 2.2-1 Distribution of Power Network Service Areas
SP is an economic entity in charge of nationwide power transmission across regions, with
core business in power grid construction and operation. The length of SP transmission lines at the
voltage of 220 kV and above is 146,200 km, which accounts for 89.5% of China’s total length of
transmission lines at 220 kV and above, and among which lines at 500 kV and 330 kV are 26,700
km and 8,680 km respectively. Its transformation capacity at the voltage of 220 kV and above is
350 GVA, which accounts for 84.8% of China’s total transformation capacity at the same voltage
level. There has formed in China 5 trans-regional grids (Northeast China, North China, East
China, Central China and Northwest China), South China Electric Power Joint-venture Network
among four southern provinces and three independent provincial or municipal networks.
Trans-province grids and Shandong Grid have built 500 kV or 330 kV transmission lines as main
trunks, while East China and Central China grids have been inter-connected through +500 kV DC
transmission lines.
The above networks cover most parts of Chinese rural and urban areas, providing qualified,
reliable electricity and supply services. The layouts of energy resources and productivity in China
require optimal electricity allocation in the nation as a whole. SP is striving for nationwide grids
interconnection and promoting optimal electricity allocation in China. With the full
implementation of West Development strategy, SP will further its efforts in the channel
construction of West-to-east Power Transmission to carry out interconnection across large regions.
SP will strengthen and complete construction on regional trunk frameworks and provincial
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receiving-side frameworks, with reasonable network structure and high flexibility, in order to
meet competition in power market and prevent black outs in large areas.
Nowadays SP is sparing no efforts to build Three Gorges Transmission and Substation
Project. The world-known Three Gorges Hydro Hub started its official construction in December
1994, which consists of 26.7GW units, with a total installed capacity 18.2 GW. Its annual average
power generation will reach 84.7 TWh with its power supply covering Central China, East China,
Guangdong and Chongqing. Three Gorges Power Station is designed to start generation in 2003
and to totally complete construction in 2009. The Three Gorges grid construction has started
simultaneously with that of generating units. These include: 500 kV DC transmission lines with a
total length of 9100 km, total AC transformation capacity of 24.75 GVA, four +500 kV HVDC
converters with each capacity of 3 GW.
At the same time SP is striving for other work connected with nationwide interconnection.
At present we have basically constructed interconnection between Northeast China and North
China; East China and Fujian interconnection project is ready for construction; the initial
preparations of interconnection between North and Central China, Central and Northwest China,
Northwest China and Sichuan-Chongqing, Shandong and North China are under steady progress.
SP has actively responded to governmental calls in promoting nationwide West-to-east Power
Transmission, West Development and optimal resource allocations.
SP carries out urban and rural power grid construction and upgrading to relieve customers
from suffering the bottleneck in power supply and to exploit power market. Through the key
construction and retrofitting on medium or low voltage distribution network at 10 kV and below,
the speeding up of one-family one-meter reform, and etc, SP has greatly simplified voltage levels,
enhanced power supply reliabilities, resulting in rapid progress in urban grid reliability. SP has
also achieved a lot in construction and upgrading of rural power grid through completing
functions of county-level grids, strengthening supply capacity of town-level grid, and increasing
supply reliability. These efforts have basically eliminated problems such as high rural grid loss,
low supply reliability and poor energy quality, and set a solid foundation for building firm rural
power grid framework with reasonable layout, advanced equipment, scientific management and
high automation.
■ Electric power generation
Chinese electric power network has the large electric power network over several provinces
and the district electric power network by province unit. Five electric power group Corp. were
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formed in the large electric power network in January, 1993 (power-saving Corp. forms in a
district electric power network). Both the equipment capacity of this major five electric power
networks and annual power generation occupy 70% or more of the whole country.
(amount of power generation equipments owned)
- China Huangeng Group.Co. (38GW)
- China Datang Power Group.Co.(32GW)
- China Huadian Group.Co.(31.1GW)
- China Guodian Power Group.Co(30.4GW)
- China Electricity Investment Group.Co.(29.9GW)
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2.3 Subjects of electricity field toward a sustainable development
2.3.1 Energy saving and development situation of renewable energy in China
Chinese energy conservation and development of renewable energy has been achieving
remarkable success under the policy of “Putting saving on the top and raising the utilization
efficiency of resources although resources development and saving are satisfied.” And the
important role is played to secure for mitigation of insufficient resources, environmental pollution
curtailment, improvement of quality and influence of economic growth, and quick and healthy
continuous development of national economy.
Energy saving has been raising the remarkable economic effect and the social effect. The
amount of energy consumption (1990 year prices) per 10,000 yuan of the gross domestic product
(GDP) in China decreased for 2.77 ton standard coal in 2000 from the 3.97t standard coal of 1995
during the “9th the 5 year plan.” Thereby, the reduction amount of energy saving and energy
utilization attained 410 million-ton standard coal in the total. Energy consumption amount per
main product has been decreasing in number although grades differ. When the amount of direct
energy saving in the “the 9th Five-Year Plan” period is calculated, energy value is 66 billion.
The amount of saving, and the amount of energy utilization reduction are equivalent to 8 million
ton of sulfur dioxide and 180 million ton of carbon dioxide (calculated with carbon.)
The support for the technical development of a company, new product development and
technical improvement projects which improve traditional industries with high-tech technology,
achieve industrialization and improve product structure, and a government bond technical
improvement project is strengthened for energy saving and reduction of consumption as a point of
technical development and technical improvement. Energy saving technologies, such as the
spatter slug protection furnace developed significantly, a thermal storage formula heating furnace,
dry type fire extinguishing, a large-sized aluminum electrolysis tub, a large-sized circulation flow
floor boiler, conversion into coal water mixture by oil burn, have produced great results and
become wide spread in the related industry.
The company engaged in research of a solar water heater, production, sales and installation
service in the end of 2000 reached approximately 1000 companies in nationwide, and annual
production capacity attained 6,100,000 m2. The amount of solar water heater possessed in
nationwide reached 26,000,000 m2 ranking the top in the world. Moreover annual production
capacity of assembly parts of solar power battery in the country reached 5 TW, and approximately
40 production companies (assembly and sales companied are included) existed. Cumulative
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utilization amount has exceeded 15 TW. Since large-scale wind power generation also developed
rapidly in China, 26 wind power plants were build in total and equipped with of power generation
capacity of 340GW. Chinese wind power generation stepped into a new stage. Moreover,
small-size wind power generators installed in the country has become approximately 190,000 in
total. It plays the significant role in the western area where has no-electricity in order to supply
domestic use electricity for farmers. The area where the utilization development of geothermal
resources in the country is about 1,300 places, among those 10 million m2 implements geothermal
heating. And equipment capacity of the geothermal power plant is about 30 MW.
For the solar energy technology, the domestic crystal silicone battery efficiency attains 11 to
14 %, and ability of solar water heater technology has been further improved among heat
utilization technology of solar energy. The application formula has been improved from a
seasonal and recess formula to the one with continuous use in all the weathers. Development of
the technology which integrates construction and heat utilization of middle heat collectors and
solar energy is also in progress. For the wind power, the domestic production rate of the wind
power unit of 200-300 kW level developed by China independently already exceeded 90%, and
domestic production rate of sample machine of 600kW unit has also reached approximately 80%.
Moreover, China will have R&D capability of 10 types of small wind generators of 10kW from
what was 100W before. Furthermore, wind and optical energy and wind-diesel joint power
generation system is developed. Application of large-medium size industrial methane project and
domestic methane pool technology of rural area are developed. It becomes the effective
technology to improve life conditions of farmers and cities and quality of environment. The
effective utilization model project of biological matter such as plant stalk has been developed
gradually, and the geothermal heating also has increases further. Therefore, introduction of new
technology such as heat pump makes value of geothermal practical utilization increased.
Although efforts are continued in respect of energy saving and renewable energy in China
and process has been also greatly carried out, the Chinese level is still considerably behind
advanced countries for energy utilization situation. Energy consumption per GDP of 10,000 yuan
in China is 3 times the global average level.
The amount of product unit energy consumption of main energy consumption product is
40% higher than the foreign advanced level, and energy efficiency in China is about 10% below
than the global advanced level. Terminal utilization efficiency is also 10% and below. The
technical equipment is also inferior and overall level is about10-15 years delay compared with the
advanced countries. Furthermore, the importance of energy saving and development of renewable
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energy is not understood by people, and there is not much immediate consciousness for it. A
regulation policy is also imperfect, and the encouragement policy of company energy saving is
also behind. There is a problem that it has been hard for some areas to well-establish the
preferential treatment policy of comprehensive practical use of resources. Moreover, the prices of
some energy products are operated and the company has not received the competition pressure. In
addition, problems, such as shortage of the inside motivity of energy conservation and the
synthetic technical level of renewable energy, insufficient market training exist. Therefore, there
is still long way for energy saving and development of renewable energy in China.
2.3.2 Target of renewable energy
Annual development utilization amount of alternative energy and renewable energy
(practical use with traditional way of small hydro-power-generation and biological matter energy
is not included) in China will reach 13 million ton standard coal in 2005. This is equal to
discharge reduction of the greenhouse gas by 10 million ton of coal and 600,000 ton of sulfur
dioxide and dust. As a result, the situation of non-electricity frontier areas with 1,300,000 farmer
households will be improved and employment post of 200,000 people will be created.
Annual production capacity of national solar water heater will reach 11 million m2 and
possession amount will be 64 million m2 in 2005. Five to ten leading companies which are
internationally competitive will be built, and the annual productive capacity of national solar
battery will be set to 15 trillion W. Moreover, the solar power industry which handles application
instruments and circumference parts will be created in order to generate total possession amount
of 53 trillion W. Capacity of parallel establishment of wind power equipment is 1.2 million kW
and approximately -200,000 equipment production capacity will be reserved. In this way, the
demand of the domestic market is satisfied. Moreover, the geothermal heating area in 2005 will be
20 million. About 2 billion m3 supply capability is produced by the practical use system with
sufficient efficiency, such as a large-medium size methane project, a biomass project, etc. of
industrial organic waste water and a livestock breeding farm.
2.3.3 Promotion policy for renewable energy
Research settlement for policy to encourage development : By promoting research and
establishment of tax revenue preferential treatment policy for new energy and renewable energy
and encouragement policy for power generation network, demand is generated from a market
through effective policy. In enforcement of a western large development strategy, market
development and industrialization of the alternative energy and renewable energy of the western
area are promoted by the preferential treatment policy etc. taking advantage of the energy.
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Promotion of technological change, improvement of technology and equipment level :
Cooperation of industry, university and research institution is encouraged and practical use of
technology and new products of new energy and renewable energy with intellectual property is
developed. Moreover, utilization and industrialization of science research result are preceded.
Furthermore, the significant technical model is shown and the technical equipment level and
equipment production capability are raised through introductions by macro adjustment and the
market.
Implementation of model project which proceeds integration of the solar energy and
construction, model plant construction of large wind power, commercialization model project of
VAGUS utilization technology, and commercialization model project of biomass power
generation.
Promotion of establishment and revision of national standard for related products and parts
which include installation and design of system and energy efficiency standard, training of a
positive market, regulation, establishment of standard system of alternative energy and renewable
energy, a product performance, the examination method, an energy efficiency standard, and a
system, a design, etc.
The guarantee-of-quality system of alternative energy and renewable energy is built. The
product quality inspection center and quality control system of a national level are completed
gradually, and the large-sized wind power equipment and parts inspection, and attestation
business are established. Moreover, the solar system and the quality inspection system accepted in
the world will be completed.
By establishing industrialization technology service system, a project bid system, a project
supervision and an examination system are implemented. Moreover, the agency service mainly
concerned with construction, technical consultation, information service, and personnel training
are encouraged.
Wide development of international exchange and cooperation: International exchange and
cooperation are developed positively. Industrialization of alternative energy and renewable
energy is implemented with foreign advanced experiences.
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2.3.4 Goal of technological development for main renewable energy
Solar heat utilization of solar energy : heat tube type flat concentrator, Glass vacuum heat
collection pipe which metal circulates inside, application software of a vacuum tube steam water
heater and solar water heater system and hardware are mainly developed. Moreover, research and
development of technology which integrates practical use of solar power, heating,
air-conditioning, etc. and construction are implemented. At the same time, a solar bolt power
generation system is promoted.
By developing wind power of 600kW level and the wind power unit beyond that level, a
certain scale of production is implemented. New types of wind power unit such as multiple level
low power generators and variable wind speed and constant frequency with no gear box are
developed. By improving the production technology level of breakaway type wind power
generator of 10 Kw or below, the electric power supply system which integrates wind / diesel, and
the wind / light / diesel, compensating wind/lights together,
Effective utilization of biomass energy : by promoting development with emphasis on the
large-medium size methane project which treats high-concentration industrial-agricultural
organic waste water utilizing the anaerobic digestive technology, the technical level of the leased
facility for methane is raised. Developments of coal molding by the biomass matter and
development utilization of efficient direct combustion equipment are accelerated.
By implementing a research on geothermal power utilization and collection technology, and
production of geothermal utilization equipment and technical development of circumference
equipment, introduction of heat pump technology of geothermal source and the digestive
absorption is accelerated. Hence the domestic production level of equipment is improved.
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3. Analysis of Solar / Wind Energy Introduction / Development Scenario
This chapter examines the scenario to introduce and develop solar/wind energy in China in
future, on the basis of study result conducted until last year and the findings of former chapter.
3.1 Basic Way of Thinking of Scenario Setting
The report of last year shows that the rapid expansion of the two economic gaps subsisting in
China (the gap between the midland and the coastal areas, and the gap between urban and rural
areas) is becoming a primary problem in future Chinese ‘’Sustainable Development’’.
In addition to these two gaps, this year, “Economic Gap of the Inside of Cities’’ is paid
attention as a new gap. The income groups in the inside of cities are divided into three,
higher-income group consisting of high-ranking officials or owners of big companies, middle-
income group consisting of independent businessmen or technicians, and low-income group such
as people flowing from rural areas. And the gap among income groups has been expanding year
by year since 1990s like the other two economic gaps. In recent year, the central government has
been shifting its policy from the way of thinking that those who become rich first become rich
(first wealth theory) to the way of thinking to construct the economic system that all of the people
can enjoy wealth (equal wealth theory), and has strengthened the redistribution of finance
according to the gaps, and enforced the relaxation policy by the creation of employment, in order
to correct the economic gaps. However, it is expected that the gaps will expand more with the
economic growth around the coast areas in future.
Below are the summaries of “Three Economic Gaps” that this study pays attention to.
3.1.1 Gap between Provinces
The gaps among provinces are represented by the gap between each province in the Midwest,
which mostly consists of farm villages, and each province in coastal area where industrialization
progressed rapidly by the setting of Special Economic Zone. This economic gap among provinces
rapidly expanded in 1990s, and in 2000, the GDP difference between the richest province and the
poorest province became more than ten times. In addition, the rate of the poor to the total
population is 56% in the Midwest, and 35% in central area, which means there is a big gap
compared to 9% in eastern area. In recent years, the provinces in the Midwest have been growing
43
more than 10 % a year, and that acts as a brake on the expansion of the gap, but doesn’t act as a
basic solution.
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000100M Yuan
Beijing
CTian
jin C
Hebei
PSh
anxi
PNei
mengg
u AR
Liaoni
ng P
Jilin
PHe ilo
ngjia
ng P
Shangh
ai C
Jiangs
u P
Zhejia
ng PAnw
hei P
Fujia
n PJia
ngxi P
Shando
ng P
Henan
PHube
i PHun
an P
Guangdo
ng PGua
ngxi A
RHa in
an P
Chongq
ing C
Sichua
n PGuizho
u PYunn
an P
Tibetan
AR
Shan
xi P
Gansu
PQin
hai P
Ningxia
AR
Xinjia
ng AR
Region
GDP (1990)
Primary Secondary Tertiary
1990
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000100M Yuan
Beijing
CT ian
jin C
Hebei
PSha
nxi P
Neimen
ggu A
RLiao
ning
P
Jilin
PHeil
ongjia
ng P
Shang
hai C
Jiang
su P
Zhejia
ng P
Anwhe
i P
Fujia
n PJia
ngxi P
Shan
dong P
Henan
PHub
ei P
Hunan
PGua
ngdon
g PGua
ngxi
ARHain
an P
Chong
qing C
Sichua
n PGuiz
hou P
Yunnan
PTibe
tan A
RSha
nxi P
Gansu
PQinh
ai P
Ningxia
AR
Xinjia
ng A
R
Region
GDP (2000)
Primary Secondary Tertiary
2000
A bigincrease in
10 years
GDP gapbetweenprovinces
10 times
Figure 3.1-1 Example of Economic gap between provinces
3.1.2 Gap within Province
Even in rich provinces in coastal areas which have been rapidly developing, when it comes
to the gap between urban and rural areas in the provinces, there are big economic gaps as shown in
the figure below. Especially, in recent years, in urban areas, the absorption power of employment
has been increasing with the industrial activation, but on the other hand, in rural areas,
employment has been remarkably decreasing because of decline of agriculture, miserable
condition of self-supporting agriculture with industrialization and little development of industries
except agriculture. Especially, concerning the flow situation of labor force in rural areas, after
1997 when “the Big Three Revolutions” occurred, the ratio of people working in the provinces
outside the place of residence has been increasing, and in rural areas, the absorption power of
employment has been decreasing.
44
Shandong
01,0002,0003,0004,0005,0006,0007,0008,000
1990 1995 1997 1998 1999 2002 2003
yuan
Figure 3.1-2 Economic Gap Change of Urban Area-Rural Area in Province
3.1.3 Gap within Urban Area
The economic gap in urban areas is positioned as the economic gap caused by wage gap
among industries. As mentioned above, when the income levels in urban areas are divided into
higher-income, middle-income, and low-income group, low-income group accounts for 50%,
middle-income 10%, and higher-income 10%. And, in 2000, the wage gap among industries
reached about 6 times (the average wage of workers in Beijing city was 19,155 yuan in 2001).
Because the population residing in Chinese urban areas is currently judged to be about 4 hundred
million, the population of high-income group in China is estimated to be about 4 thousand.
In addition, the energy consumption and the spread rate of durable consumer goods such as
household electric appliances rapidly spreading in urban areas, are very different among income
groups, and the lifestyle in urban life is also different.
45
Durable Goods
0
20
40
60
80
100
120
low middle higher
Income Group
%
cellular phone
PC
private car
refrigerator
air-conditioner
washingmachine
Energy Consumption
0
50
100
150
200
250
300
350
400
450
500
low middle higher
Income Group
Water (t)
Electricity(KWh)
Coal (kg)
LPG (kg)
Utility Gas(m3)
Figure 3.1-3 Durable goods and energy consumption by income group
At the same time that the expansion of “the Three Economic Gap” is a big social problem, it
is also a big unstable factor for sustainable development in Asia including Japan. In particular, the
social condition uncertainty with the expansion of gap between the rich and the poor, gives a big
blow to our industries which has been rapidly expanding business to China. On the other hand,
even if Chinese economy develops toward the direction that these economic gaps are corrected,
the current social system doesn’t work well, and in order that, in a country which has 1.3 billion
population, people in rural areas or low-income group obtain the same living standard as people in
higher-income group in urban areas, it is essential to realize innovative social system by energy
utilization in sustainable form, environmental safeguard and social infrastructure improvement.
In particular, concerning energy field, in the Tenth 5-year Plan, the rationalization of energy
improvement, energy-saving and the improvement of generation efficiency as well as the respect
of environmental safeguard are set as important polices. An attempt for sustainable development
has begun, premised on energy security.
On the other hand, in China, the priority in the environmental problem of the Chinese
government is removal of environmental pollution with large influence to a human body. For
example, Air pollution (dust, SO2, yellow sand), water pollution, household-waste (being
especially a city part big problem). On the other hand, China government appealed, “A
developing country has the right to discharges carbon dioxide for development”. It means the
policy priority over a warming problem is low.
46
The study of IGES divides the social Infrastructure improvement by the development of
Asian cities into three development stages, as shown in the figure below, “unprepared stage”,
“preparation reinforced stage”, and “completed stage (repair / eco-friendly technology
development)”. According to this study, each city of China is positioned in the second stage,
“preparation reinforced stage” of social infrastructure, and it is in the period when a big social
investment is needed toward the rapid deterioration of city environment. In such a growth stage,
the earth-scale investment toward environmental problem, such as global warming, is restricted
because policies for environmental problems directly related to human life are given priority. On
the other hand, the rural areas in China are still positioned in the first stage, “unprepared stage”,
and policies toward environment are not given priority and the fund security capacity is low.
Therefore, in order to realize “sustainable development” in China, it is necessary to realize social
investment toward improvement of city / area environment, and to develop business with more
than one benefits to contribute for long-term and earth-scale environmental problem
(multi-benefit).
47
Development of Urban City and Environmental Infrastructure Improvement
• GDP per person: More than US$10000
• Urbanization rate: 80%• Quantity of garbage per
person: 1.1-5.07Kg
• GDP per person: US$1400. In particular, reinforcement tendency is remarkable between $3000 and $5000.
• Urbanization rate: 50%• Quantity of garbage per
person:0.8-1.1Kg
• GDP per person: US$400• Urbanization rate: less than
30%• Quantity of garbage per
person: 0.4-0.7Kg
UE
I standard(sew
age / garbage processing rate)Bangladesh, Nepal, Myanmar, Vietnam, India, Laos, Sri Lanka, Indonesia, The Philippines
• The sewer is not arranged, • Garbage collection is not
arranged. • A hygiene problem • Environment deterioration
Large and medium-sized cities in China, Thailand, Malaysia
1. Water pollution by increase of life drainage.
2. Rapid increase of garbage in urban cities (life system business system)
3. Damage caused by lack of industrial waste processing facility
Japan Korea, China (Hong-Kong, Macao), Singapore
1. Toward mass production / mass consumption / mass waste society
2. Deterioration of existing facilities, shortage of final processing facility and site for processing facility
3. Increase of construction and administration management cost, financial difficulty and fund shortage of government
Fund supply method of each stage
1. Policy priority order: low
2. Not become private business
3. ODA or international development financial institution support project (mostly volunteer)
4. Limited project by foreign capital ( big city only)
5. Small-scale community business by donations
First stage:unprepared stage
1. Necessity of public investment expansion (national / local government debt, income from tax, surcharge and charge), financial policy (low interest financing by government financial institutions)
2. Private company’s entry to make up for government money shortage (BOT)
3. ODA or international development financial institution support project (mostly loan)
4. Financial market (fund supply by city bank, financing, flotation of loan, stock market and industrial loan)
5. Investment and donation by private investors (eco fund)
Second stage: preparation reinforced stage
1. From new construction investment to administration management / maintenance
2. Private company's entry to promote business efficiency (administration trust)
3. Shift of garbage processing business to private companies on the basis of deregulation /expansion producer's responsibility
4. The processing charge collection
Third stage: completed stage (repair / eco-friendly technology development)
year
Figure 3.1-4 Development of Urban City and Environmental Infrastructure Improvement(IGES 2003)
48
The introduction of renewable energy including solar / wind energy contributes to “air
pollution” which is given the first priority in environmental problem in China, and, in addition,
it makes it possible to cope with the global warming problem which is given less priority in
China. In other word, multi- benefit is acquired by contributing to reduction of air pollutant such
as SO2, NOx or smuts, which are necessary for earth-scale sustainable development as well as
reduction of greenhouse effect gas necessary for earth-scale sustainable development. In
addition, it is expected that element technology and mass production technology necessary for
introduction of solar / wind energy are contributed by industrial technology in future economic
development in China.The following is the summary of multi-benefit by solar / wind energy.
3.1.4 Multi-benefit by solar / wind energy
- City environment improvement by reduction of air pollutant such as SO2, NOx or smuts
- Contribution to earth environment by reduction of greenhouse effect gas (CO2) emission
- Contribution to energy security by reduction of fossil fuel use
- Contribution to domestic industry development by acquisition of high energy
technology
This study sets the following basic policies on the basis of the study result of last year, and
examines the scenario for introduction and development of solar / wind energy in China.
- The midland areas without electricity (Kansu, Inner Mongolia and Tibet) are not taken
as objects of this study, supposing that in those areas, solar / wind energy project by the
Tenth Five-year Plan, “Light Manufacturing Process” is continuously carried out.
- It is supposed that, solar / wind energy is preferentially introduced to the areas where the
potentially existing quantity of solar / wind energy was sufficient for its demand in the
study result of last year.
- It is supposed that initial introduction / management cost of solar / wind energy is set on
the basis of its current standard cost, and mass production effects and technical
innovations are promoted by the introduction in China.
- Concerning the forms of project enforcement, more than one forms including traditional
public business, private fund or introduction of foreign capital, are assumed.
* Light Manufacturing Process: Offers 100W of electricity per person (800,000 kW in total)
toward 8,000,000 populations without electricity, by constructing wind and solar power
generation facilities by 2005.
49
3.2 Assumed Scenario Option
In China, business related to environment / energy has progressed with investment by
public budget such as tax and national debt, environment subsidy and investment support from
overseas like Japan as the main source of revenue. However, financial support from the central
government toward the local government (provinces, cities) is limited, and more than 80% of
urban environment measure cost has depended on local government. Therefore, while rich
provinces have rapidly advanced their social infrastructure improvement with their original
source of revenue, poor provinces have been caught in a vicious circle that less tax revenue has
delayed the social infrastructure improvement, and the delay has interfered their tax revenue
increase.
Reference: Financial System Reform in China
Large-scale financial system reform was carried out, and the financial contract system was
abolished. The tax was classified into national tax, local tax and joint tax revenue by country and
provinces, each of country and provinces established each tax organization, and the separated
tax system was introduced to gain revenue separately. Duty or consumption tax for extravagance
was considered national tax, and personal income tax was considered local tax. The increased
value tax (value-added tax) which occupies the most share in national tax revenue is considered
a joint tax, and its 75% was considered national tax, and 25% was considered local tax.
Concerning company income tax, tax revenue from companies managed by the central
government was considered national tax, and that from companies managed by local
government was considered local tax. In addition to the distribution of financial income,
concerning financial outgo, the responsibility for outgo of country and provinces was defined.
In addition to value-added tax or company income tax, tax system such as personal income
tax system was arranged, too.
After this reform, the share the central government occupied in national finance greatly
recovered, and increased from 22% in 1993 to 56% in 1994.
On the other hand, since the later half of 1990’s, the case that businesses related to energy /
environment are carried out by private investment from domestic companies or foreign capital
companies, has increased mainly in urban areas, and fund supply method and project
enforcement form have been diversified. In particular, private capital entry promotion plan
toward investment or management of city environment facilities, introducing PPP (Public
Private Partnership) method, has been positively carried out and it is assumed that businesses
which gain income from use rate or surcharge will be positively carried out.
50
The pollutant discharge rate system in China collects specific amount of money from those
who discharge pollutant into environment, according to the type, amount, and density of
discharged pollutant, on the basis of the related national rules. The system aims to promote
decrease and elimination of pollutant discharge by giving specific economic pressure toward
those who discharge pollutant, using value rule. The rates are generally imposed on waste water,
exhaust (including smoke and dust) and solid waste, but some provinces impose the rate on
noise pollution, too. The rate standard is decided according to type, amount, density and degree
of harm. In addition, the system deals with extra collection or remission method of pollutant
discharge rate, and manages and uses pollutant discharge rate.
As an option of project assumed in future, CDM (Clean Development Mechanism) is
assumed, which is supposed to be regulated in Kyoto Protocol. At present, in Japan, a lot of
feasibility studies are carried out with the aim of examining the possibility of CDM project and
investment environment for China.
In the following, abstract of each project option is described and the problems to introduce
projects are arranged and analyzed.
51
3.3 Scenario in Public Works Type of Project
As mentioned above, In China, business related to environment / energy has progressed
with investment by public budget such as tax and national debt, environment subsidy and
investment support from overseas like Japan as the main source of revenue. However, financial
support from the central government toward the local government (provinces, cities) is limited,
and more than 80% of city environment measure cost has depended on local government.
Therefore, the expansion of economic gap has promoted the gap of the situation of social
infrastructure improvement among areas.
In such a situation like this, Chinese government has attempted to strengthen the source of
revenue of the central finance, by introducing “separated tax system” in 1994, and, with this
source of revenue, attempted to make financial move system from central to local operated, but
that has not corrected the financial gap among areas yet. Concerning “Western Areas
Development” started in 2000, which aims to correct the gap among areas, the project fund of
several trillions of yuan is raised by government construction bond, private investment, foreign
capital and those who make profits in principal.
On the other hand, in China, as showed in the chart below, environment investment
necessary for achievement of environment goal reaches to 700 billion yuan, and furthermore, in
the period between 2006 to 2010, more than 900 billion yuan of investment is expected to be
necessary. The details of investment necessary for the achievement of goal are estimated to be
60 billion yuan from the central government, 334 billion yuan from local governments and 306
billion yuan from private companies, and, in particular, the environment measure investment
from the central government and private companies are big.
52
Table 3.3-1 Environ mental policy and investment for accomplishment
unit: 10,000t, 100m Yuan
current
reduction amt.
new emission
amt.
total reduction
amt.
investment cost
significant investment point
2006-10 investment
forecast
SO2 199 261 460
coal cleaning, electric power generation desulfurization
Dust 298 202 500 2,800 city gasification etc. 3,289
COD etc. 145 355 500 2,700 city sewage / industry sewage treatment
3,587
domestic waste 150,000 t/day hazardous waste 5,000 t/day Solid Waste medical waste 1,650 t/day 900 1,612
Ecological Conservation Policy
eco-model local development 500 700
Fundamental Development of Environment
environmental monitoring, research, technological development, education etc.
100 200
01-05 year environmental investment
total 7,000 total 9388
Source : Fujitsu Research Institute
It is expected that in China, public works related to environment / energy using pure public fund
(including support from overseas) are limited to areas where such a positive investment from
private or foreign capital as “Light Manufacturing Process” which is a solar energy project
targeting poor areas like Hsitsang, Kansu or Inner Mongolia.
53
3.4 Scenario in PPP Type Project Enforcement
In China, foreign capital used to be mainly introduced from investment by foreign loan
until 1980s, but, in reverse, direct investment has been increasing since 1992. On the other hand,
concerning the rate of private fund and public fund in foreign capital, in 1995, the rate of private
direct investment in foreign capital introduction was over 70%, but the rate of public fund was
only 10%. (Matsumoto, 2003) In future, it is expected that with WTO affiliation of China, the
opening of public works toward foreign capital will be promoted, and PPP type project form
using private fund will spread in China.
The following are the cases of PPP project in China.
The cases of PPP project in China. (IGES document)
■The sewage processing facility in Chiangsu
- The collection of sewage processing cost: First 0.2 yuan/ton 0.4 yuan/ton, 0.6
yuan/ton (a little private investment)
At present 1.15 yuan/ton (rush of private investment)
- In future, basically the improvement of sewage processing facility depends on private
capital.
■The sewage processing facility in Beijing economy development ward.
- The collection of 1.1 yuan/ton of sewage processing cost. A sewage processing
facility (BOT) was completed by American investment company on condition of 20
years’ management.
■The city garbage processing generation facility in Wenzhou
- Commitment of government: 1) Voluntary offering of processing site. 2) Payment of
73.8 yuan/ton of processing cost. 3) Purchase of all of the extra electricity at 0.52
yuan/kwh
- The construction of three garbage processing generation facilities by private
companies. (Two of them were completed and started to operate) When all of three
are completed, it will become possible to process 2000 ton a day (It will become
possible to process all garbage of city)
Shenzhen city, which is representative of cities introducing PPP project form, reflecting
WTO affiliation of China, announced their government policy that “ The city will open public
54
works more, and permit social capital or foreign capital to participate in construction and
management of public works in various forms such as independent investment or joint capital.”,
and decided to transfer some shares of 4 public companies engaging in energy, water and gas
supply, to foreign companies in the form of international bid in 2002. In August of the same year,
more than 60 internationally well- known companies, such as a French electric power company
or British water service company, which filled the two conditions for bid, (1) to be a strategic
investor (2) to be a internationally well-known company, or a predominant company in the field,
such as the world best 500 companies, made a bid. Four government companies of Shenzhen
energy group, water group, gas group and public traffic group, made an international bid, and
each of transferred shares is 25%, 45%, 40% and 45% in order. And public works, which
government had monopolized, were opened to foreign capital. In addition the city officially
announced 8 types of public companies, such as water supply, water pipe, gas pipe, community
bus, sewage processing, garbage processing, environmental hygiene service or medical waste
processing.
Shenzhen city is planning to select investment by enforcing an open bid toward
constructions of manageable public works such as water supply, gas supply or sewage
processing, and to encourage domestic and foreign economies to invest construct and manage in
the forms of independent investment or joint capital. The city will take in social capital into
government fund, but it plans not to open the constructions of unmanageable public works.
For the preceding enforcement of opening toward foreign companies in 8 types of
industries, each control organization fixed concrete monitor supervision ordinance. The
regulations in the ordinance are as follows.
The action of any company must accord with the related measures or requirements. Any
company must fulfill the definite promise made on a bid. When prices are raised, or cost is
collected for no reason, the government has the right to cancel and stop the contract.
When companies make price adjustment, they must report the adjustment plan to the
government control organization in advance. The price related organization examines and
authorizes it. The citizens can raise objection to it, too.
Prices are decided by the market. Generally, before a bid, the government makes the cost
assessment about the industry, holds a public hearing for prices and control the profit acquisition
rate of companies.
55
Mainly in big cities like Chingtao, the introduction of PPP project in social capital
improvement is promoted. Concerning the introduction of PPP project, the success of project
depends on whether the payment toward investment is possible or not. In the environment
investment priority areas like 47 environment conservation priority cities or areas whose
income is high because of a lot of foreign capital entry, the project technique by PPP is
considered to be effective, because the payment toward environment investment (charge,
surcharge) is possible, and the demand toward environment technology is high.
56
3.5 Scenario in CDM (Clean Development Mechanism) Project Enforcement
CDM provided in Kyoto Protocol, which is a form of warming prevention project carried
out between advanced countries (Annex I Country) and developing countries, is defined as a
scheme giving “Sustainable Development” to the host country and community, and carbon
credit (CER: Certified Emission Reductions) for usual profits to investors an businessmen
additionally. Also in the generation related project in AIJ (Activities Implemented Jointly)
carried out as a pilot project of JI/CDM from 1998 to 2000, projects toward China account for
16%, and many of them are large-scale. “Renewable Energy Project” accounts for 30% of all
projects (16), which comes after “Forestation, Reforestation and Forest Maintenance”
At present, each country, which ratified the protocol, has started feasibility study and
application of CDM project, and worked actively toward the publication of the protocol. China
as well as Southeast Asia, Central and South America, is important as a target area of projects,
and in Japan and each country in Europe, projects concerning energy conversion / efficiency
have been carried out. In CERUPT (Certified Emission Reduction Units Purchase Tender) by
Dutch government, wind generation project has been carried out as unilateral CDM in Inner
Mongolia, and its generation volume, credit period, assumed price and quantity of CER are
34.5MW, 10 years, 5.40 EUR/t-CO2 and about 670,000 t-CO2 in each. This project was
planned by the research institute under the control of Chinese national development plan
committee itself. Also, in Germany, a wind generation project has been planed.
The following list shows result examples of trial calculation of the economy and reduction
potential, concretely assuming measures technology introduced as CDM, toward Chinese
generation section and 4 industries with much energy consumption (iron and steel industry,
paper manufacture industry, cement industry and chemical industry)
Table 3.5-1 CDM potential in China (10000t-CO2)
Power station 2,788
Iron and steel 574
Paper manufacture 40 - 117
Cement 1,328
Chemical 862
Total 5592 - 5669
(from collaboration research MRI/Keio University)
57
Judging mainly from enforcement of projects to develop foreign investment business, it
seems that direct foreign investments including CDM and PPP make little difference in the
decision making mechanism. However, in CDM, it is possible to secure carbon credit (CER :
Certified Emission Reductions) in reward for additional cost occurring in certification or deal,
various risks with use of Kyoto Mechanism (risk resulting from project, risk resulting from
businessmen, risk resulting from system, risk resulting from price, risk resulting from politics),
and limit of selection toward transferring technology. At present, to make project schemes,
expecting profit on credit sale, involves some risk, because the separation of America from the
protocol, and uncertainty of ratification by Russia, make it impossible to expect high market
price of carbon credit. However, as for areas other than cities whose payment ability toward
investment is low for PPP type project, as a project form contributing to “Sustainable
Development”, renewable energy conversion business is assumed, as a project policy, which can
secure CER to the maximum.
Especially, in Japan, energy-saving device has progressed, limit reduction cost of CO2 is
high, and reduction in foreign countries is highly expected. In measures toward global warming
promotion scheme, 20 million ton is supposed to be reduced, which is 1.6% of emission in
1990(1,233 million ton), by Kyoto Mechanism, and, therefore, it is crucial to make an effort
toward Kyoto Mechanism.
58
3.6 Case Study of Solar Water Heater Introduction / Development
As a success example of solar energy utilization in China, solar water heater is taken,
whose household coverage reaches to about 5%(20 million households) in 2000. In China, with
improvement of life level, a lifestyle to use a shower at home is taking root. It is general to use
electricity as a heat source for hot-water supply, but increase of electricity consumption by use
of hot water is worried. Therefore, in China, at the same time with development of domestic
technology by cooperation among industry, the government and university, utilization of solar
water heater has been promoted, and as a result, the largest solar water heater market in the
world was successfully generated. Chinese government aims to cover 75% of new energy in the
Tenth Five-year Plan with solar energy and increase the household coverage to 25% by 2015.
More than 1,000 companies implement research, production, sales, installation service of a
solar water heater in China. Annual production capability is 6,100,000 m2. Solar water heater
possession amount is 26,000,000 m2 which is a top in the world (2000/e).
As of 2000, the market scale reached to about 6 billion yuan. As for structure of solar water
heater, vacuum tube type accounts for 65%, flat board type for 25%, and light collection type for
10%. While flat board type is popular in Japan, vacuum tube type is main in China. Solar water
heater is mainly installed in multifamily housing like apartment, it is also spreading to
single-family houses.
Figure 3.6-1 Product example of solar power heater
“High Economy” and “High Convenience”, in addition to increase of energy consumption
for hot-water supply by improvement of life level, are taken as reasons of rapid spread of solar
water heater in China. As for economy, in China where electricity / gas rate is high, the initial
cost by installation of solar water heater can be recovered in 2 to 4 years in case of electricity,
59
and in 4 to 6 years in case of gas. The following chart shows the economy comparison of gas
water heater, electric water heater and solar water heater.
Table 3.6-1 Economical efficiency of solar water heater (Shimizu 2001)
Vacuum tube water
heater TPH2.6/70C deg/ 140L
Gas water heater 60yuan/15kg
Electric water heater
0.8yuan/kW
Installation Investment 4275 About 1500 yuan About 1500 yuan
Installation use life More than 15 years 5 or 6 years 5 or 6 years
Water temperature and capacity 40/250L 40/250L 40/250L
Days of daily use 300days 300days 300days
Number of washing 5(wintertime) 5(wintertime) 5(wintertime)
Cost per person and day 0 0.5 yuan 1 yuan
Annual fuel cost 0 750 yuan 1500 yuan
Installation cost of 15 years 4275 yuan 4500 yuan 4500 yuan
Total cost of 15 years 4275 yuan 15750 yuan 27000 yuan
Yearly average cost 285 yuan 1050 yuan 1800 yuan
extinguishment year:(gas)4275/1050=4 years, (electricity)4275/1800=2.4 years
Solar water heater made in China is very convenient, because electric heater is built in it to
add heat after light collection, and to install other hot-water-supply device for backup is not
necessary.
In solar water heater development in China, basic research results were connected to its
production by cooperation among industry, the government and university. Especially, Seika
University, which is considered to be filling the role of traction, is contributing to its
popularization, by establishing an attached factory and company of solar water heater on
campus, making a product directly by the research results in the university, and selling the
production device / production line to the whole country. 50% of solar water heater
manufactured by the company established by Seika University, is exported to Europe, and
attracts attention as an export industry of energy field.
60
Its popularization is supposed to be promoted by the Tenth Five- year plan, as mentioned
above, and various policies for its popularization are being developed in the taxation system or
financing.
The following list shows representative examples of favorable treatment policies for
popularization of renewable energy including solar water heater in China.
Table 3.6-2 Favorable treatment policies such as taxation system, price or financing in
renewable energy introduction
Duties 3% to wind energy plant machine, 6% to wind energy generator, 12 % to PV system, compared with 23% to general consumer goods.
Value added tax 3% to bio gas related, 6% to small waterpower, compared with 17% of general value added tax.
Income tax 33% of company income tax collected by local government is omitted, and special system is introduced in each area.
Price policy Favorable treatment purchase price of renewable energy electricity ( enforced in some provinces)
Low interest financing system
Loan with half interest compared with the market, is accommodated to large/medium-size businesses related to bio gas, solar energy and wind power.
61
4. Construction / Evaluation of Renewable Energy Introduction Model in the Study Area
The application possibility of the scenario option described in the foregoing chapter, is
examined by setting concrete study areas. Taking the basic policies showed in 3.1 section into
consideration, Chingtao, Dalian and Tianjin in the Sea of Bohai and the Yellow Sea coast area
where environment deterioration by rapid urbanization, and increase of energy consumption are
expected, and some options toward investment necessary for social infrastructure improvement
are assumed, are selected as study areas.
The general conditions of each study area are described in the following.
4.1 General Conditions of Study Areas
The area including Dailian and Tianjin called “the Circum- Sea of Bohai Economic Block”
is the capital economic bloc where industries concentrate on surrounding the Sea of Bohai, and
is regarded as one of the Big Three economic blocs along with South China Economic Bloc and
Changchiang Delta Economic Bloc. It includes core cities, such as Dalian (Liaoning Province)
located in the Liaotung Peninsula, Tangshan, Chinhuangtao (Hepei Province), Yantai, Weihai
(Shangdong Province), along with cities under direct control, Beijing and Tianjin. It is
sometimes explained as “Circum- Yellow Sea Economi Bloc”, including Chingtao (Shangdong
Province).
Figure 4.1-1 Location of Study Areas
62
0 200 400 600 800 1000
100M yuan
primary
secondary
tertiary
Industry
Chingtao Tianjin Dalian
Figure 4.1-2 Industry Structure in Study Areas.
The Tianjin new port in Tianjin which is a representative harbor city in China, has the
most-equipped container berth, where the foundation of manufacturing industry has been
established, and industry infrastructure improvement has progressed. In particular, under the
geographic condition, investment from Korean capital concentrates on this area, and
embarkation of Japanese capital also stands out. Especially, in recent years, talent exchange,
technology exchange and investment have been carried out to encourage positive intra-trade,
regarding Kyushu area in Japan, Korea and China as “Circum-Yellow Sea Economic Bloc”.
As for the investment trend of the circum-Yellow Sea area, 191 out of 531 foreign
investments in Kyushu as of 2001, were directed to China. Among investments toward China,
148 were directed to circum-Yellow Sea area, which accounts for 77.5%. As for type of industry,
about 50% is manufacturing industry, and most of the embarkations aim at low production cost
in China or entry to Chinese market. On the other hand, the number of investments from Kyushu
to Korea is 33, which is not large with 6.2% of the whole investment numbers, but the number
combined with investments toward China accounts for 42.2%, which shows a close economic
relation between Kyushu and China / Korea. Korean market has been attracting attention again,
on the backgrounds of the positive invitation of foreign capital by economic structure reform or
deregulation, or the new relation between Japan and Korea with the joint World Cup as a start.
The investments of Korea toward China, such as the establishment of production position by
financial combine companies, have been favorably progressing. China occupies 41.9% of the
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total of investments of Korea, and 75.6% of it concentrates in circum-Yellow sea area. It is
because the area, which is geographically close and has regular lines in Shantung Province and
Shanghai, is very convenient.
According to the result of last year, while Chingtao is considered an area suitable for solar
power generation, Tianjin and Dalian are considered an area in which hybridization of solar
energy and wind energy is effective.
0
5
10
15
20
1 2 3 4 5 6 7 8 9 10 11 12
Tianjin
0
0.5
1
1.5
2
2.5
3
1 2 3 4 5 6 7 8 9 10 11 12
Liaoning
0
0.5
1
1.5
2
2.5
3
1 2 3 4 5 6 7 8 9 10 11 12
Shandong
1
Solar advantage
Wind advantage
Figure 4.1-3 Solar / Wind Energy Potential in Study Area
4.1.1 Chingtao
located in the southernmost of Shantung Peninsula, is one of the Big Five trade port in
China, with 7,020 thousands of population (as of the end of 2000) and 10,654 km2 of area, and it
is also one of 15 economic center cities.
In the past, Chingtao underwent the occupation by Germany and Japan, and has been doing a lot
of trade with foreign countries since early times. The city was appointed to one of 14 coast open
cities of China in April, 1984, and gained province level of economic management authority as
an independent city in the national economy plan in October, 1986.
The city is one of the important production bases in spinning industry, light industry and
chemical industry. From 1980’s, new industries, such as electronics or bio, rapidly progressed,
and the city became a very important production base of China, especially in the field of
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household appliances and information communication. In particular, the city has a lot of world
famous domestic companies, such as Chingtao Beer (beer, beverage), Haier (household
appliance) and Hisense (household appliance).
Gross domestic product (GDP) of 2002 is 151,820 million yuan, with 14.6% increase
compared with the preceding year. The details are 14,590 million yuan for the primary
industries (4.2% increase), 76,500 million yuan for the second industries (16.9% increase), and
60,700 million yuan for the third industries (14.7% increase), and the rate is 9.6%, 50.4% and
40% in each. The growth rate exceeds the goal by 12%, and the total economic power of the city,
which is in the eleventh place in the whole country, maintains a high standard.
GDP
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
1987 1990 1995 1999
Shangdong Chingtao
Electrical Consumption
0
100
200
300
400
500
600
1991 1995 1999
Shangdong(Total) Chingtao(Total)
Shangdong(/capita) Chingtao(capita)
Figure 4.1-4 GDP and Electrical Consumption of Shangdong and Chingtao
Investment Situation of Foreign Capital
Chingtao has important investment wards like Chingtao bonded ward (Matsushita
Electronic Components went into), Chingtao high technology industry garden, Chingtao
ocean-bound economy and technology development ward, and Chingtao ocean technology
development ward, other than Chingtao economy and technology development ward, which
have a lot of investment projects from overseas. By the end of 2002, 13,183 cases of the
investment projects from overseas of all cities were admitted in total, and the total sum of
investments reached to 12,200 million US dollars.
65
Chingtao economy and technology development ward, which was approved and
established in 1984, is the first coastal economy and technology development ward in the whole
country, and aims to preferentially develop and preponderantly support leading industries, such
as petroleum chemical, electronic household appliances, harbor business, manufacture and
repair of ship, steel industry, automobile, biotic pharmacy, new type of building material,
sightseeing service.
In addition, preferential policies toward value-added tax, income tax, duty or import and export
duty, are applied to the companies which improve infrastructure facilities, such as water,
electricity, heat power, gas, traffic, communication or public business, and inject foreign capital.
From Japan, spinning, agricultural and marine processing, electron, transport and trading
concern companies have mainly gone into, and Mitsubishi Materials, Denso, Nichirei,
Katokichi, Mitsubishi Heavy Industries or Ebara Cooperation are taken as representative
companies.
Among countries, Korea is making the most amount of investment, and Hong Kong, Japan
and America follow it. It is because Chingtao is geographically close to China and Hong Kong.
0 50000 100000 150000 200000 250000 300000 350000
USD (10,000)
Korea
Hong Kong
Japan
USA
Taiwan
Singapore
Countries and Region of the investors
Figure 4.1-5 Investment Amount by Country
Present Situation and Problem of Energy Use
In Chingtao, electricity demand shows a tendency to increase by the rapid economic
development, and the coal consumption by power generation reached to 4 million ton / year, as
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of 2002. 90 % of energy for heating depends on coal use ( 9 million ton / year) and coal is also
used as main energy at home and in factories. Therefore, air pollution often becomes a problem
in wintertime. For that reason, Chingtao is promoting to lower the dependence on coal to
prevent air pollution, by strengthening the regulation about sulfur content rate in coal,
improving the central pipe for heat supply, promoting energy conversion to natural gas, and
reducing coal boiler sharply.
On the other hand, as for the introduction situation of renewable energy, independent type
of solar water heater system is popularized in both urban and rural areas, and its popularization
rate is very high in China. However, it is pointed out that the system, which mars the beauty of
the scenery, is not appropriate for a sightseeing city, Chingtao, and installation of device taking
scenery into consideration has been examined. And wind power plant is installed in the
development ward by the joint venture contract among Chingtao High-Tech Park company and
German companies. This equipment, to which 25 million US dollars were injected, is a wind
power plant with 20,000 KWh of generation capability, and BOT system, 70% of whose fund is
invested by foreign capital, is adopted in it.
On the other hand, solar power generation equipment has not yet reached to the stage of
introduction. In addition, in rural area, a technology has been progressing, which makes
primitive biomass energy, such as firewood or feces and urine of domestic animal, the
mainstream gas.
Trend of Environment Policy
Environment policies in China adopt a system, in which the central government sets a goal, and
each autonomy achieves the goal by taking concrete measures. Especially, Chingtao has an
authority to make original laws or systems as a city under the direct control of the central
government.
The city was designated as one of “the Big Ten Large Environment Problem Cities” in
China in 1998, because of the terrible air pollution by the rapid economic development.
However, owing to the environment policies and action of the city, it was designated as
“Environment Model City” in 2000. The amount of investments related to environment
conservation was 3,213 million yuan, which accounted for 2.12% of GDP. 2,452 million yuan
was used for city environment infrastructure improvement, and 362 million yuan for prevention
/ measures of industrial pollution. The priority policies for environment measures are those for
sewage caused by life drainage or industrial waste water with the rapid industrialization, and for
air pollution such as sulfur dioxide or smuts by coal use (especially, the heating use in winter is
67
a problem.) In recent years, the problem of the disposal and recycling of construction waste
has been becoming big by building construction rush with economic development. In Chingtao,
yacht competitions are supposed to be held in the Beijing Olympics of 2008, and environment
improvement is an urgent matter for Olympics success, too. On the other hand, at present, the
city considers that the global warming is a problem not in urban areas but in rural areas where
methane gas is emitted by farm products or domestic animals, (the environment conservation
agency), and, therefore, measures for global warming are not taken as priority policies. It
accords with the policies in the whole country of China, as mentioned above, and concerning
measures for global warming of China, the necessity of business development combined with
area environment measures, such as those for sewage or air pollution, is pointed out. In
Chingtao, there is a case that improvement was carried out by BOT method, which uses foreign
capital, in the development and management of sewage processing facility, and the environment
for private fund use in social infrastructure improvement, is on the way to be arranged.
4.1.2 Dailian
Dailian is located in the southernmost of the Liaotung Peninsula in the northeastern China,
and surrounded by the Yellow Sea in the east, the Sea of Bohai in the west, and the Shangdong
Peninsula in the south. Dailian has had province level of economy management authority since
Dailian was ratified as a coast opening city by the central government in 1984, and appointed to
an ordinance-designated city in 1985. As of the end of 2002, the Gross Domestic Product of
Dailian was 140.6 billion yuan by estimate, which increased 14.1% compared with the
preceding year. The product of the primary industries reached to 11.84 billion yuan with 6.2%
increase, the second industries to 66.11 billion yuan with 15.1% increase, and the third
industries to 62.65 billion yuan with 14.8% increase. The ratio of the primary industries, the
second industries and the third industries in the Gross Domestic Product is 8.4 : 47 : 44.6. The
Gross Domestic Product per person is 25,276 yuan, which is equivalent to about 3,056 dollars.
Investment Situation of Foreign Capital
The number of newly admitted foreign capital companies in the city was 832, which
increased 15.1% compared with the preceding year. The amount of foreign capital of contract
base was 3,017 million US dollars with 20.6% increase, and the amount of foreign merchant
direct investment of actual use base was 1,603 million US dollars with 10.3% increase. 88 of the
investment projects by the newly admitted foreign capital companies are big projects with more
than 10 million dollars of investment. The production of foreign capital companies of the city
was 68,020 million yuan, which increased 15.9% compared with the preceding year, and the
main business income was 72,960 million yuan with 17.9% increase, and the total profit was
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2,850 million yuan with 51.5% increase. Of the foreign capital companies, which have already
started business, the companies whose total profit exceeded 5 million yuan, was 136, which
increased by 30 companies compared with the preceding year.
Prevention of Environment Pollution
The city is recognized as a synthetic model city of city water environment quality and
quantity improvement technology by the national technology department. Therefore, the city
has sequentially strengthened the management toward old industrial pollution sources,
especially as reinforcement of water pollution measures, and is making management plans
toward 517 of pollution items. The total of investments has reached to 100 million yuan. In
addition, the city has thoroughly carried out the “Blue Sea, Blue Sky and Green Land” project,
and generally improved environment of neighborhood of airway and railway or boundaries
between urban and rural areas
4.1.3 Tianjin
One of the Big Four cities under the direct control of the Chinese central government,
Tianjin is the fifteenth largest city, and has an international port in the coastal area of China. The
city became a center of economy and trade in the north of China, because of its special
geographical location. The city has excellent cultures as well as the beautiful scenery and
abundant products. It is not only a sightseeing city with historical remains but also a modern
international port city.
The economy and social environment of Tianjin have rapidly progressed since the People’s
Republic of China was established in 1949. After the reform opening of 1980’s Tianjin was
designated as a coastal opening city by the central government and fastened the speed of reform
opening. Its economic power increased more, and the development of national economy made
a new step forward. The Gross National Product of Tianjin in 1992 was 41,120 million yuan,
which increased to 1.36 times compared with 1980, and by about 7.4% a year on average, and
GNP per person was 4,695 yuan on average. In Tianjin, 296,800 people are engaging in the
primary industries, 430,200 in the second industries, and 273,000 in the third industries.
Tianjin, which is a synthetic industrial base, forms 36 major industries, and has a industry
system with 180 departments. In 1992, there were 7,418 industry companies in all cities size and
over, and the cost price of fixed assets of industries is 45,850 million yuan, which increased by
3.3 times compared with 1980. Tianjin is the center of commerce and trade in the north of
China, and has a function to raise the effect of the distribution of products and supplies. In 1992,
69
the amount of product shipment toward the country was 22,540 million yuan, and the total sales
was 23,990 million yuan. The former increased to 1.61 times, and the latter to 3 times, compared
with 1980. In recent years, in Tianjin, international or regional wholesale markets of steel raw
material, petrochemical, steel material, spinning, automobile, coal, or pork, were constructed
one after another. The function centering commerce progressed more, and the lively prosperous
Tianjin markets became convenient for shopping. There are a lot of retail shops in addition to
domestically and internationally well-known department stores. There are six shops per 1 km2
on average, and a convenient shopping environment has been arranged.
Investment Situation of Foreign Capital
Tianjin has been making exchanges on the side of economy and culture with various
countries in the world since the reform opening. In 1993, the total of import and export reached
to 2,755 million dollars, and export occupies 1,928 collars. Recently, Tianjin carried out an
opening policy toward foreign countries, and formed economy and technology development
ward, new technology industry garden ward, and 12 small ward and prefecture economy
development ward, in succession. Furthermore, Tianjin became the center of modern and
synthetic Tianjin international economy and trade exhibition. The city offered a good place by
cooperation of international trade and economy. In addition, companies of joint venture,
cooperation management, and foreign capital management, made contracts with 6,136
companies from 1979 to 1993, and the city is forming friendly relations with 16 cities of 14
countries. It is also introducing foreign capital positively in improvements of infrastructure
facilities, such as city construction, traffic, energy or environmental preservation, and, therefore,
preferential policies are adopted mainly in development wards.
Prevention of Environmental Pollution
In Tianjin, from 2002 to 2004, the Big Six projects aiming at environmental preservation,
has been promoted, such as “Blue Sky Project”, “Blue Water Project”, “Noise Exclusion
Project”, “Eco Project”, “Industrial Pollution Prevention / Improvement Project” and “Cell
Culture Modeling Project”, and serious problems, such as the quality of air and water
environment, or garbage processing, are planned to be solved immediately. The city is
planning to be a environmental preservation model city of the nation, spending 3 years, by
bringing the amount of industrial pollutant discharge of the whole city to the national standard,
reducing more than 20% of sulfur dioxide (SO2) emission, bringing the quality of air and water
environment to the national standard, increasing the days when the air quality of the city reaches
to the second grade standard to 90%, bringing the ground water quality of the towns to the city
standard, and raising the rate of harmless processing to 80%. Grasping the chance of Beijing
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Olympics, the city is making efforts to adjust the layout of industrial structure and city, develop
industries with high technology, high value-added and less pollution, increase natural gas use
vastly to 3 billion cubic meters, arrange power plants by coal and other coal boiler to remove
sulfur, construct 150 gas supplement station newly, use compressed natural gas for all of public
buses and hygiene environment improvement special cars, control air pollution effectively,
improve the national-class natural preservation ward 3 and the city-class natural preservation
ward 2, put emphasis on recovery and improvement of damp ground of beach and sea and city
ecology bloc, raise the quality of city environment, and form Beijing / Tianjin ecology bloc, by
2005 to 2010.
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4.2 Influence Factor in Introduction / Development in City Area
As described above, it is an urgent matter for each Chinese city to tackle deterioration of
city environment with the rapid economic development, and environment measures projects
have been carried out on the basis of plans by the central government (five-year plans) and the
national goals. These environment measures put emphasis on the fields concerning area-level of
“sustainable development”, such as “air pollution”, “water pollution”, or “waste / recycling”,
and projects have been carried out according to the development stage of each city since 1990’s.
Many of the projects obtained good results, and, in particular, achieved the national goals or the
goals of each city toward “air pollution” and “water pollution.
However, the amount of investment necessary for environment projects is expected to
increase in future, too, and it seems difficult to cope only by public fund including expected tax
revenue and foreign support, and, therefore, the project form by PPP system, which uses private
fund by foreign capital and domestic companies, is demanded. As described in the case of
Shenzhen, the increase of chances of foreign capital entry by WTO affiliation of China,
increases foreign capital entry toward social infrastructure improvement in urban areas, and,
therefore, it is expected that project formations toward infrastructure improvement by
“commercial activity” will be positively carried out in urban area, which can obtain income such
as surcharge or charge. However, in the project fields or areas / cities which have difficulty
obtaining income, positive injection of private fund can not be expected, and, therefore, it is
crucial to carry out traditional type of projects by introduction of public find, or to give tax
preferential treatment to invite public fund, or incentive such as legal protection.
On the other hand, in China, there are only a few project incentives toward the reduction of
greenhouse effect gas to realize global “sustainable development”, because the present
environment measures put emphasis on “environmental pollution having a direct influence on
human bodies”. Actually, the projects to reduce greenhouse effect gas have not been carried out
positively, except some projects whose purpose is to appeal to the world. Therefore, at present,
in China, it is difficult to form projects putting emphasis only on reduction of greenhouse effect
gas, and it is demanded to form projects possible to secure “multi-benefit” including some
effects, such as living environment improvement, or contribution to economic development.
That can be confirmed from the truth that, in the pilot projects of CDM project by Kyoto
Protocol, which have been carried out for China in Japan and each country, many of them have
emphasized the effects by reduction of discharge of Sox or smuts, and reduction of project cost,
as well as security of carbon credit, as project benefits. Therefore, in introduction and
72
development of solar and wind energy power generation, it is necessary to establish technique to
introduce after evaluation of what kind of benefits are expected toward China, along with the
reduction of greenhouse effect gas, according to the area character.
The following shows the benefits assumed in introducing solar and wind energy to cities of
China.
- Reduction of air pollution substances (SOx, NOx, smuts)
- Reduction effect of greenhouse effect gas (CO2) (security of carbon credit)
- Opportunity loss by electricity shortage
- Improvement of living environment of citizens
- Maintenance of natural environment
- Revitalization of energy / environment industry
- Introduction / management cost
- Geographical condition
- Increase of opportunities to introduce foreign / private fund
- Reduction of energy transfer cost by reduction of fossil fuel use
These benefits are assumed to be directed to the whole world (global), the Chinese government,
areas / cities (and citizens), and businessmen.
The influence degree of influence factor by object in introduction of solar / wind energy, is
arranged as matrix in the following list.
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Table 4.2-1 The influence degree of influence factor by object in introduction of solar / wind
energy
Global
Chinese
government
Areas /
cities Businessmen
Air pollution substances
(Sox,NOx,smuts) medium high high high
Greenhouse effect gas (CO2) high low low high
Electricity shortage low high high high
Living environment of citizen low high high low
Maintenance of
natural environment high medium medium medium
Revitalization of industry medium high high high
Introduction / management cost low medium medium high
Geographical condition low medium medium high
Increase of opportunities to
introduce fund medium medium medium high
Reduction of
energy transfer cost medium low low medium
*companies receive different influences according to project targets
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4.3 Examination of Renewable Energy Introduction Model Targeting Chingtao
Targeting one of the study areas, Chingtao in Shantung Peninsula, the approach toward
introduction of renewable energy of solar / wind energy is examined, taking the foregoing
discussion into consideration, in the following.
Coal occupied 90% in the energy structure of Chingtao before. Therefore, air pollution
caused by mass discharge of SO2, NOX or TSP (Total Suspended Particles), was serious.
Chingtao government set air pollution improvement policies in 1996, and has wrestled with
them. The following policies have been taken concretely.
1) Reduce small coal boilers in the city.
2) Place an discharge limitation of pollutant toward companies which discharge
substance causing air pollution
3) Ban the use of more than 1% of high sulfur coal.
4) Ban the coal use in boiler fireplaces in the existing companies or buildings in each
ward of the city.
5) Promote concentrated heating supply, and switch to the use of city gas.
6) Arrange the coal market and plan to switch to the energy structure, in which high
quality coal supply is secured.
As a result, SO2 discharge of the city in 1999 decreased by 59%, and TSP discharge
decreased by 45.8%, compared with 1990, as well as NOx discharge.
Furthermore, as a long-term plan, the city is to limit the coal use in the primary energy, introduce
natural gas pipeline, and make efforts to improve energy structure more. On the other hand, in
order to reduce electricity use by warm water use, such as warm water shower, independent type
of solar warmer heaters are promoted, and the spread rate has reached to the top class in the
whole country. That the area gets a lot of sunshine, and is suitable for solar energy use, is taken
as that reason. On the other hand, the city is not positive toward discharge reduction of
greenhouse effect gas, and incentive toward discharge reduction does not work.
As for fund, the amount of investment related to environmental preservation by the city in
2003 was 3,213 million yuan, which accounts for 2.12% of GDP. The details are 2,452 million
yuan for environment infrastructure improvement, and 362 million yuan for prevention /
measures of industrial pollution. On the other hand, ODA of Japan toward China was 134,200
million yen in 2002, and it has amounted to 3 trillion yen in total.
Japanese government is taking a basic attitude for ODA that the support toward the self-help
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effort by Chinese government, contributes to the sustainable development of the whole world,
which is very important. Of ODA toward China, the total sum of yen loan enforcement of
development support, targeting Shantung Peninsula including Chigtao, reached to 271,414
million yen in 2001, which was mainly used for infrastructure improvement of energy and
transport.
Table 4.3-1 Development Support of Japan toward China, targeting Shantung Peninsula
Item Sum (hundred million yen)
Enforced year
Completed year Support aim
Pumping-up power plant construction project
180.00 2000 Energy infrastructure
Yellow river Delta agriculture general development project 89.04 1999
Agriculture, forestry and fisheries infrastructure
Electricity transformation project
176.29 1998 Energy infrastructure
Waterworks / flood control facility improvement project 60.08 1998 Public welfare
infrastructure Thermal power plant construction project 570.82 1997 Energy
infrastructure Chingtao port front bay the second stage of construction project
27.00 1996 1999 Transport infrastructure
Chingtao development plan (waterworks / sewer) 25.13 1993 1995 Public welfare
infrastructure Port the second stage of construction project
60.89 1991 1995 Transport infrastructure
Chaingtao development plan (road) 88.00 1990 1996 Transport
infrastructure Chingtao development plan (communication) 40.34 1990 1995 Communication
infrastructure Chingtao port expansion project 570.00 1984 1994 Transport
infrastructure
Railroad construction project 397.10 1979 1985 Transport infrastructure
Port construction project 429.45 1979 1985 Transport infrastructure
On the other hand, the total of investment by foreign capital toward Chingtao, targeting
special economic zones, reached to US$85,585M in the period from 1995 to 2001, which shows
a rising tendency year by year. Particularly, as for energy concern, a joint venture contract to
construct a wind power plant with 20,000 KWh of power capacity, was recently concluded
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among Chingtao high-tech park company and German companies and there are some cases of
investments from foreign capital toward renewable energy. In addition, French company is
developing a city water supply / sewage processing project, and “water business has been also
developed. Particularly, Chingtao is a sightseeing city where Beijing Olympics will be held in
2008 (yacht competition), and has been making developments in order to be a “circulating type
of city with arranged ecology environment”. Therefore, in the present situation, development
projects toward Olympics induce environment investment by foreign capital.
Judging from this situation, in introduction of solar / wind energy in Chingtao, adoption of
PPP type of project by foreign capital, which takes several benefits (multi-benefit) examined in
4.2 section into consideration as well as an economic viewpoint, is expected. As for concrete
locations, it is assumed that solar power generation will be introduced mainly to multi-family
housing and single-family housing, as a spread type of small-scale power supply, taking the
present spread form of solar water heater as a model, but it is difficult to establish a large-scale
of solar power plant for geographical environment in the city. On the other hand, as for wind
power generation, as seen in the aforesaid project case in the special economic zone, technique
to establish a large-scale wind power facility on the place where big demanders in coast
industrial areas and commercial areas gather, is assumed. In Chingtao, there is a potential that a
wind power plant is established on the ocean, and it is expected that it will be established in
consideration of the scenery, referring to the case in Denmark.
In the following chapter, a benefit analysis in an introduction / development of solar / wind
energy, is conducted, assuming a concrete energy introduction.
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5. Benefit Analysis in Solar / Wind Energy Introduction / Development
This chapter examines benefits, possibility of cost reduction, and effects in introduction /
development of solar / wind energy toward China as renewable energy.
5.1 Way of Thinking of Benefit Analysis
As benefits of introducing solar / wind energy into China, the following items, which are
described in “4.2. Influence Factor in Introduction / Development in City Area”, are assumed.
- Reduction of air pollution substances (SOx, NOx, smuts)
- Reduction effect of greenhouse effect gas (CO2)
- Opportunity loss by electricity shortage
- Improvement of living environment of citizens
- Maintenance of natural environment
- Revitalization of energy / environment industry
- Introduction / management cost
- Geographical condition
- Increase of opportunities to introduce foreign / private fund
- Reduction of import cost of energy, such as oil
In the following, conversion of these benefits into monetary value is attempted.
(1) Reduction of air pollution substances (SOx, NOx, smuts)
As a direct method to measure benefits by reduction of air pollution substances such as
SOx or NOx, it is general to investigate how much money citizens intend to pay for reduction of
air pollution substances by CVM. However, it is impossible to find such data, and, therefore,
the amount of the government budget for reduction of air pollution substances is regarded as the
benefits.
As described in “3.3. Scenario in Public Works Type of Project”, Chinese government has
invested 280 billion yuan in five years, to reduce 4.6 million tons of SOx and 5 million tons of
smuts / dust. Therefore, benefit per ton of reducing air pollution substances is assumed to be
5,800 yuan / year.
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(2) Reduction of Greenhouse Effect Gas (CO2)
Chinese government is not enthusiastic about reducing greenhouse effect gas. From this
viewpoint, benefit of reducing greenhouse effect gas is nothing. However, it is planned to
introduce CDM into the power generation department and the energy poly-consumption
department in China, as described in “3.5. Scenario in CDM Project Enforcement”.
Judging from the case of wind power generation in Inner Mongolia, the benefit of reducing
greenhouse effect gas is assumed to be 5.40 EUR/t-CO2.
(3) Opportunity loss by electricity shortage
China Electricity Power Co, which is the biggest power company in China, announced that
electricity shortage mainly resulted from increase of electricity consumption and large-scale
consumption type of industries by the high economic growth, and decrease of water-power
generation by drought.
In the north of China, electricity shortage has expanded by increase of consumption since winter
season began. According to China DatangPower Group Co., electricity has already been
running short, and in the peak hours of electricity consumption, even reserve electricity has been
running short. The company forecasts that this situation will continue until the end of winter,
and the shortage volume in winter might exceed that in summer, 19,610 thousand kW.
Coal, which the company uses for power generation, is also tending to run short because of
increase of the consumption, and the power generation capability itself is weakening. In some
fuel power plants, which have a reserve of coal only for 5 or 6 days, the stable supply of
electricity is becoming difficult.
Such electricity shortage causes not only opportunity losses by the decline of productivity, but
also direct economic losses by the raise of electricity rate.
The following are taken as steps toward electricity shortage in China, at present.
Steps by the administration
- Inspect equipment of enterprises with a big electricity contract.
- Change and adjust holidays of Saturday and Sunday into weekdays.
- Limit electricity supply to enterprises with a big electricity contract, which have no urgent
need.
- Request enterprises with big electricity consumption to stop their production equipment.
Rate adjustment
- Set the ratio of the rate in the peak hours from July to September to the rate in other hours
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at 4:1.
- Limit the maximum supply from 13:00 to 15:00 to less than 90% of the normal maximum
supply.
- Charge the double of basic rate to the part of more than 90% mentioned above.
(4) Improvement of living environment of citizens
Improvement of living environment of citizens is included in the benefits showed in (1), if
it is considered to be a reduction of air pollution substances. To be able to use electricity freely
and secure a comfortable living environment by using air-cooling in summer and heating in
winter, are taken as other benefits. The newspapers say that in the north of China, electricity
shortage has expanded because of the increase of electricity use since winter season began, and
the shortage volume might exceed that of summer season. In addition, coal for power generation,
is tending to run short because of the increase of consumption, and the power generation
capability itself is weakening.
It is also necessary to measure how much money citizens intend to pay or receive by CVM,
in order to investigate the negative benefits, from which citizens suffer because of such
electricity shortage. However, it is also impossible to find such data, and therefore, fines for
illegal use of electricity are assumed as benefits.
The ordinance enforced in Beijing in September 1, 2003, is taken as a law against illegal use of
electricity in China. According to this law, a fine less than 5times of electricity rate is imposed,
in addition to the supplementary collection when illegal use is made. Because the electricity rate
(for business) is 0.83 yuan/kWh in Beijing, the negative benefit, from which citizens suffer
because of electricity shortage, is assumed to be 4.1 yuan/kWh.
(5) Maintenance of natural environment
In order to investigate benefits concerning maintenance of natural environment directly, it
is also necessary to measure how much money citizens intend to pay or receive by CVM.
However, here, maintenance of natural environment is assumed to be one of benefits by
reduction of air pollution substances.
(6) Revitalization of energy / environment industry
Revitalization of energy / environment industry is designed by introduction of solar / wind
energy.
The efficiency of crystal silicon battery made in China has reached to 11~14%, which is 2
80
points higher compared with the time of the eighth five-year plan (1991~1995). Although the
efficiency is a little lower compared with the world level, it has attained a pretty high level.
As for wind power generation, China Electricity Power Co. positively introduced it as a
main player. So far, as for capacity, wind power generation facilities with more than 405
thousand kW (China Electricity Power Co. 300 thousand kW) (the dispersive type 2,000kW),
have been provided, and as for technique, about 90% home production has started on a
200kW~300kW scale. The home production rate of sample machines with 600kW has attained
about 80%, too.
It is expected that the annual development use of new energy and renewable energy in
China (do not include the use in traditional ways of small-scale water-power generation and
living thing energy), will attain 13 million tons standard coal in 2005. This is equivalent to
reduction of discharge of almost 10 million tons greenhouse effect gas by coal and over 0.6
million tons sulfur dioxide and dust. Hereby, the situation that electricity is not provided for
farmers and herders of 1.3 million families in remote regions (about 5 or 6 million people) will
be improved, and jobs for 200 thousand people will be created.
Furthermore, the annual production capability of solar water heater in the whole country
will attain 11 million m2 in 2005, and its holdings will be about 64 million m2. The annual
production capability of solar battery will be 15TW in 2005, solar industry with applied
apparatus and peripheral parts will be created and the total of holdings will attain 53TW. The
capacity of wind power generation facilities will be 1.2GW in 2005, and manufacture capability
of facilities of about 150~200 MW will be secured.
The settlement of environmental preservation industry will attain 200 billion yuan in 2005.
It is predicted that environmental preservation facilities will account for 27.5 % of the total,
which is 55 billion yuan, synthetic use of resources for47.5%, 95 billion yuan, and
environmental service for 25%, 50 billion yuan.
(7) Introduction / Management Cost
In 2001, the average wholesale electricity rate with tax included of the former China
Electricity Power Co.-affiliated power plants was 0.281 yuan/kWh, and the average selling
electricity rate with tax included was 0.396 yuan/kWh. As for the wholesale electricity rate, it
was on the order of 0.399 yuan/kWh of East China, 0.292 yuan/kWh of North China, 0.284
yuan/kWh of Northeast, 0.259 yuan/kWh of Central China, 0.206 yuan/kWh of Northwest and
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0.186 yuan/kWh of South. The level of Kuangtung Province, 0.44 yuan/kWh is higher
compared with other areas. On the other hand, as for the selling electricity rate, it was on the
order of 0.459 yuan/kWh of East China, 0.418 yuan/kWh of Northeast, 0.398 yuan/kWh of
North China, 0.380 yuan/kWh of Central China, 0.316 yuan/kWh of Northwest and 0.273
yuan/kWh of South. The level of Kuangtung Province, 0.72 yuan/kWh is higher compared with
other areas. The selling electricity rates classified by objects of supply, are 0.69 yuan/kWh for
commerce, 0.59 yuan/kWh for lightings for non-citizens, 0.52 yuan/kWh for non-industry /
normal industry, 0.38 yuan/kWh for large industry, 0.38 yuan /kWh for citizens and 0.33
yuan/kWh for agriculture.
On the other hand, the unit rate of solar power generation is 4.3 yuan /kWh in Japan. The
average level of the rate of wind power generation connecting to the power transmission
network is 0.60~0.70 yuan/kWh. Therefore, by introducing solar power generation, a negative
benefit of 3.6~3.9yuan/kWh is assumed. In addition, as for wind power generation, a negative
benefit of –0.09 ~0.37 yuan/kWh is assumed.
(8) Increase of Opportunities to Introduce Foreign / Private Fund
Since 1980’s, China has been gradually advancing the opening of energy field toward
foreign countries, and attracting a lot of foreign investors. Electricity industry, which is an
energy department that China has been introducing the most foreign capital, and in which the
total of investment by foreign capital has reached to 17.2 billion dollars, has been advancing
various power supply developments, such as thermal power generation, water power generation
heat multiple benefit generation or nuclear power generation. In addition, as for solar / wind
energy, technologies have been actively introduced from overseas.
(9) Reduction of Import Cost of Energy, such as Oil
China has entirely converted to an oil import country since 1993, and the import has been
increasing year by year. Especially, in 1999, the entire oil import increased to 28,580 thousand
tons from 13.5M tons of 1996, and furthermore, in 2000, it exceeded 60,000 tons.
According to the people concerned with the government, it is predicted that in 5 years
hence, Chinese national economy will continue the development of about 7 %, and the demand
for crude oil will show increase of about 4 %, but the production of crude oil in the country will
show increase of only 2%, and therefore, the tendency of shortage of crude oil supply will
become more and more conspicuous. According to another test calculation, it is predicted that,
in the period 2010 - 2015, annual oil import will reach to 180~250 million tons, and,
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furthermore, in around 2020, China will be the leading oil products import country in the world.
It is necessary to consume a large quantity of fossil fuel in order to generate electricity.
However, it discharge a large quantity of greenhouse effect gas, and, therefore, to accelerate the
development of new energy power generation applies to the need of future sustainable
development. Technologies substituting for oil, such as new energy, which decrease oil import
as well as environmental pollution, are very important in energy security. New energy and
renewable energy will meet the social energy demand in the aspect of social sustainable
development in future.
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5.2 Cost Reduction Effect by Introduction / Development of Solar / Wind Energy
Cost reduction effect by introduction / development of solar / wind energy in China, is
examined in this section. The following are taken as influence factors toward cost reduction.
- Mass production effect
- Technical innovation
- Reduction by production in China
Mass Production Effect
Cost reduction by economy is found in any kind of technology. This phenomenon is
represented by the experience curve in general. The experience curve represents the relation
between price and cumulative production or technology use, and it is given by the following
equation.
The experience curve equation; Pt = P0*X-E
Pt; Price at year t
P0; a constant equal to the price at one unit of cumulative production
X; cumulative production
E; experience parameter
Progress ration; PR = 2-E
Figure 5.2-1shows the experience curve for photovoltaic modules on the world market for the
period 1976-1992. The data indicate a steady, progressive decrease in prices through cumulative
sales, which are used as the measure of the experience accumulated within the industry. The
relationship remains the same over three orders of magnitude.
From this relationship, the experience curve is represented as follows.
Pt = 32 * X-0.29
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Figure 5.2-1 The relationship between the cumulative sales and prices of solar battery
module
Wind power is an example of a technology, which relies on technical components that have
reached maturity in other technological fields. The experience curve for wind turbines in Figure
5.2-2 shows a modest progress ratio of 96%, corresponding to a learning rate of 4%.Neij (1999)
suggests that most of the progress is due to progressive increase in turbine size.
From this relationship, the experience curve is represented as follows.
Pt = 1170 * (X/10)-0.041
Figure 5.2-2 Experience curve for Danish Wind Turbines, 1982-1997
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Technical Innovation
Pigment sensitization solar battery, spherical silicon solar battery and high condensing
solar battery are taken as technical innovations in solar battery.
Pigment sensitization solar battery is an electrochemical solar battery using titanium dioxide as
electrode material, and is attracting attention as solar battery, which can supply electricity more
cheaply than silicon solar battery. Electrochemical solar battery has a theory to put electrolyte
solution dissolving substances, which are easy to suffer oxidation-reduction, such as iodine,
between electrodes, and change hole and electrons occurring in titanium dioxide electrode, into
the current cycle, using the oxidation-reduction power of iodine. It is also called wet solar
battery because it uses electrolyte solution, and, in contrast, pn joining type of solar battery, such
as silicon solar battery, is called dry solar battery.
Although the light energy conversion efficiency of electrochemical solar battery was about
one-tenth as high as that of silicon solar battery at first, transparent electrode, which fixed light
sensitizer (Ru complex)in titanium dioxide madreporite using minute particles, was developed
by Krechel of Switzerland in 1991, and the light energy conversion efficiency of the pigment
sensitization solar battery using this, became 10%.
Furthermore, pigment sensitization solar battery is easily made compared with silicon solar
battery, and, therefore, it is possible to set a low price. In addition, it is also possible to make it
light or various shapes or colors, and, therefore, it can be placed anywhere. At present, the
efficiency of pigment sensitization solar battery is reported to be 11 % at most, but the efficiency
of the theory limit solar battery energy is said to be 33%. As for production cost, amorphous Si
solar battery is estimated to be 100 yen/W, and single crystal Si solar battery is estimated to be
360-1000 yen/W, but, in contrast, pigment sensitization solar battery is estimated to be 74
yen/W (10MW/year, n: 11%, calculated by Ishihara Sangyo), or 60-100 yen/W (10MW/year, n:
11%, calculated by Gregg of American NREL).
Spherical silicon solar battery was developed by Clean Venture 21 Inc. Poly-crystal Si
series solar battery is currently the most popular from the viewpoint of conversion efficiency
and durability, but it has a big problem in the aspect of cost. Low cost will be requested in future.
On the other hand, film solar battery, which has been developed for the purpose of reducing
material cost, has a lot of problems especially in the aspect of durability, and has not reached to
the level to substitute for poly-crystal Si series solar battery. In this situation, as a result of
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establishing technology to produce spherical poly-crystal Si 1 mm in diameter at a low cost and
high speed, and developing solar battery cell structure which carries this poly-crystal Si ball in
the center of bowl type of basic plate serving as a reflecting mirror, it becomes possible to
realize poly-crystal Si series solar battery with a low cost, which reduces Si use to about 1/10.
Poly-crystal Si balls are obtained at a ratio of 10,000 particles per second, by spurting Si heated
to 1,600 degree C and melted, into inert gas from a nozzle about 0.5 mm in diameter of crucible
bottom end, and causing recrystallization in the process of natural fall. Furthermore, pn
jointing is continually formed by making n+diffusion treatment at a high speed on the surface of
Si ball in the process of natural fall. As for bowl type of fixed micro condensing reflecting
mirror, the most suitable design has been developed so that annual power generation will come
to the biggest, and it is planned to develop technology mounting 100 pieces of poly-crystal Si
balls simultaneously toward 20 cm width seat type of basic plate serving as a reflecting mirror,
and finally make solar battery module.
According to the test calculation, it has a possibility to attain about half as much as the
production cost of poly-crystal Si series solar battery, and it is expected to be widely applied as
solar battery with low cost.
Figure 5.2-3 Image of fixed micro condensing type of spherical silicon solar battery
Research of high condensing solar battery, combining super high efficiency joining
condensing cell supplied by Sharp, with non-contact Fresnel condensing lens parts supplied by
Daido Metal, has been carried out by the fund of NEDO. Non-contact Fresnel condensing lens
has a secondary optical system of structure to correct lens color aberration, and irradiate
uniformly square condensing light matching to the shape of cells, to cells, and control color
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aberration and irregular condensing strength by solar battery side. It makes it possible to cool
down naturally without heat sink by applying mounting by epoxy conducting heat.
Research has been carried out, aiming at 40% of cell conversion efficiency in 500 times
condensing, 100 yen/W of module cost, and 100 MW of annual production.
As for wind power generation, basic technology innovation can not be seen, but to make
windmills bigger or place them on the ocean or mountains has been examined.
Reduction by producing in China
When solar battery is produced in China, how much the cost decrease is examined. The
following chart shows the breakdown in the end cost of manufacturing a solar cell. As this chart
shows, silicon wafers account for three-fourths of solar battery cell price. The biggest advantage
of producing in China is the low wages. However, according to this chart, wages accounts only
for 8.3% in the cost of manufacturing a solar cell, and, therefore, even if wages decrease to
one-tenth, the decline of price will not reach to 10%.
Labour8.3%
ElectricalEnergy2.7%
Sillicon Wafers75.1%
Silk Paste10.8%
ChemicalProducts
3.1%
Figure 5.2-4 Percentage breakdown in the end cost of manufacturing a solar cell
Next, an installed solar battery module is examined. The following chart shows percentage
breakdown in the final cost of an installed PV module. It is module price that accounts for about
50% of an installed PV module, but installer’s margin and manufacturer’s margin account for
36.4% in total. It might be able to reduce installed PV module price by reducing these margins.
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Installer'sMargin30.6%
Manufacturer'sMargin5.8%
Transport1.9%Installation
10.0%
Engineering5.0%
Module Price46.7%
Figure 5.2-5 Percentage breakdown in the final cost of an installed PV module
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6. Conclusion
In this report, the scenario development for introduction of potential solar and wind power
energy in China discussed last year and the benefit analysis of these energies introduction were
performed. The results are shown below.
In order to introduce solar and wind power energy, it costs 3.6 yuan/kWh -3.9 yuan kWh
for solar power generation and -0.09 yuan/kWh- 0.37 yuan/kWh for wind power generation. In
the case of wind power, this is less than 1.5 times of the average electricity charges in China, on
the other hand, it means 5 to 10 times by solar power generation..
This shows that solar power and wind power do not have cost competitiveness as compared with
the power generation equipment by the fossil fuel consisting mainly of coal and oil, when only
introductory cost is evaluated.
On the other hand, in the whole country, especially a city part, electric power shortage is serious
by rapid economic development, and residents' negative benefit to this electric power shortage
can be estimated at 4.1 yuan /kWh at maximum.
As a result, when the cost by the electric power shortage risk is taken into consideration,
supplying electric power by solar and wind power will be enough realized on benefit analysis.
Thus, introduction of the solar and wind power in order to compensate the electric power
shortage risk of a city part contributes also to reduction of the air pollution substance. This is
nearly equivalent to 5800 yuan / year per ton of air pollution substances, as estimated in Chapter
5. It is estimated that the air pollution substance of 600kt is cut down by the introduction of
alternative energy including solar and wind power energy and renewable energy in 2005. This is
equivalent to 3,480 million yuan. Moreover, it contributes also to reduction of the global
warming gases. The benefit of greenhouse gas reduction is 5.1 EUR/t-CO2. Since it is assumed
that reduction amount in above 2005 is 10 million ton, the effect is estimated to be 54 million
EUR.
Since the fund from Chinese government for air pollution substances and foreign
investment for the greenhouse gas reduction are expected, volume efficiency of solar and wind
energy is demonstrated, and reduction cost is further aimed. Moreover there is possibility of 1/2
-1/10 reduction of current value of solar power generation by various technical innovation
shown in Chapter 5. For these reasons, the solar and wind power energy are consider to be
introduced in China.
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Reference
Takanobu Kozugi : Quantitative Study on Cost-effectiveness of Technology Introduction of
New Energy in China, Ritsumeikan University, policy studies, 2002
Shen Zhongyuan et al:Potentiality of Energy Saving in China, IEEJ, 2003
Miao CHANG : Study on Financial Mechanisms for Urban Environmental
Infrastructure in Asi, IGES, 2003
Jyusen Asuka : Economical Evaluation of International Cooperation for Global Warming and
Concept of Japanese policy response, Tohoku University, 1999
Jin Jianmin : Marketability of Chinese Environmental Business and Japanese-affiliated firms,
Fujitsu Research Institute Research Report, 2004
Cabinet Office : “Research on Public-Private Partnership for Efficiency of International
Economy cooperation” Report, 2000
The Institute of Developing Economies : Machine Industry in Japan and Asia, IDE Study Report,
2002
International Energy Agency : Experience Curves for Energy Technology Policy, OECD/IEA,
2000
International Energy Agency : China's Worldwide Quest for Energy Security, OECD/IEA, 2000
Kosuke Kurokawa : Energy from the Desert, OECD/IEA, 2003
http://www.cv21.co.jp/
http://www.cjcci.biz/sansi_pdf_2003/pdf/2-1-4.pdf
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