6th of March 2019
Date created

CSP, energy storage and Azelio in China

China stands to benefit hugely from clean power. The smog, to which coal power generation contributes an estimated 61%, envelopes its cities for weeks at a time and is a large social and health problem for the government. In order to meet this challenge, as well as its commitments to cut greenhouse gas emissions, first under the Kyoto Protocol and more lately under the Paris Agreement (China has committed to reduce carbon intensity by 40-45% by 2020), China has encouraged fast expansion of clean energy. This first resulted in breakneck growth of wind power between the years 2005 and 2010 (China’s wind power industry grew in terms of cumulative installed capacity at a rate exceeding 100% for six consecutive years from 2005) and then of PV from 2007 until 2010 (at an annual growth of more than 100%). The destabilizing effects of this extreme growth on the grid has made energy storage a priority of the Chinese government, something that should make CSP a top priority with clean energy set for further growth. To this end, a goal to expand total installed capacity of CSP by 5 GW by 2020 was set in the 13th five-year Plan (up from nothing at the time, and only a few hundred megawatts today).

Azelio has been present in China since 2011 and its Beijing office, employing four, has since accumulated deep knowhow in the vital aspects of the local CSP market.

From running our demo park in Ordos, Inner Mongolia, we learned valuable lessons in project management and maintenance, and from negotiations projects and partnerships, as well as participating in the much vaunted National Demo Project application process (with applications for three projects) in 2016, we gathered invaluable knowledge of the ins and outs of project preparation together with large Chinese state-owned and private companies.

When Azelio first set up in China, the market for CSP was expected to take off shortly along the same trajectories as wind and PV previously. Unfortunately, for a number of non-business related reasons, these expectations have - in spite of the urgency of bringing more stable clean power to the grid - not yet materialized and the Chinese CSP market remains still in its cradle.

After a slow start following a long period of inertia, 20 national demo projects, a total of 1.35 GW of installed capacity, were awarded at the feed-in-tariff (FIT) of 1.15 RMB/kWh generated. While submitting three applications, Azelio was not awarded a project due to its lack at that time of thermal storage. Today, with a heat storage enabled technology and a modified strategy, as well as years of accumulated know-how and experience, Azelio is in a position of vantage to benefit from Chinese CSP growth.

Azelio's team in China

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