A big milestone for China's offshore wind that I missed a few weeks ago: Shandong's first GRID PARITY offshore wind project (500MW) was connected to the grid.
This means the offshore wind power is generated at a unit cost level competitive with coal-fired power.
Quick 🧵
According to the news, the Shandong Bozhong project achieved an LCOE of 400 RMB/MWh, (USD 56.90) basically at the same level as the Shandong base coal price (394.9 RMB/MWh).
It represents a huge, HUGE decline in construction costs for offshore wind in the past few years.
For contrast, the average LCOE of the already-existing offshore wind in China is around 790 RMB/MWh, nearly twice as much as this new project. These projects were built a few years ago, during the subsidy era.
In 2010, offshore wind cost per MWh in China was well over 1000 RMB.
Major factors for LCOE decline:
-Improvements in turbine blades, esp. length, allowing them to generate more power, more cost-effectively.
-Decrease in construction costs due to experience, economies of scale. Big cost drops for crane vessels, maritime labor, maritime cables.
Offshore wind is particularly important for the long-term decarbonization plans of China's industrialized coastal provinces like Shandong, Jiangsu, Zhejiang, Guangdong precisely because they lack onshore land for deployment of solar or wind (or land usage fees are sky-high).
For now, some of these provinces have been able to keep their renewable capacity growth strong via mass deployment of rooftop solar (particularly Shandong, which leads the nation).
But the available rooftops will eventually run out, while the growth in demand will not.
That's what makes control and mastery of offshore wind development costs so important for China.
It's major part of the equation for coastal provinces securing low-carbon power at reasonable prices (via their preferred in-province investment, not via cross-province imports).
For instance, here's Shanghai a few days ago, soliciting tenders to build an 800 MW offshore wind farm PLUS STORAGE at an unit cost no higher than the Shanghai coal base price of 415.5 RMB/MWh.
This would have been impossible just a few years ago.
Well yes demand growth actually WILL run out someday, but way after the available rooftops do.
*Important note*
Although this project claims to have achieved an LCOE of 400 RMB/MWh, which is nearly level with the coal-fired base price in Shandong, I was unaware that Shandong offers a provincial capacity subsidy for offshore wind constructed from 2022-2024.
Thus, it should be inappropriate to refer to this project as "grid-parity". Although it will sell its power into the open markets with no subsidy on volume, it most likely had a one-off capacity subsidy at *construction* of 800CNY/kW.
hat tip to @MhehedZherting for the correction
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Previously, my understanding had been that National Bureau of Statistics powergen data (reported monthly) excludes distributed generation (like rooftop solar) because they report facilities "at-scale" 规模以上, meaning installations of 6MW or larger.
Actually this is wrong.
The NBS definition of "at scale" is actually "all businesses with revenues of 20M CNY or larger".
Tha China Electricity Council (CEC) is the organization that uses the definition of 6MW of larger for "at-scale".
So the NBS cutoff point is MUCH higher than the CEC cutoff point.
Rather than me just saying "lmao Noah's a dope", (which believe me, is always my first instinct) let us make this into a learning opportunity and take a detailed look at the thing he has misidentified as a government-run social credit system: Alipay's Zhima Credit platform.
So yes, that was a screenshot of his friend's Zhima Credit score (aka Sesame Credit) within Alipay.
Alipay, the financial transactions platform developed by Alibaba, is one of the two largest digital payment platforms in China (the other one is WeChat Pay, developed by Tencent).
Alipay assigns its users a credit score based on their history of transactions and behavior within its payment ecosystem.
This score is used the same way a credit score is used by financial institutions in the rest of the world: to assess users' creditworthiness or lending risk.
An influential Chinese think tank: "Energy Security and New Strategies Institute" (operated by state-owned China Energy Media Group) published its 2024 power report, a comprehensive summary of 2023 data.
I've pulled out some of their key items and added very brief comments 🧵
A note before I begin: I know a lot has been written about 2023 already...most of this isn't new.
It's all good stuff, but I'm mostly writing this to have a handy place on Twitter to store these facts, if anyone (including me) wants to reference them again later this year...
Okay. 2023 China Annual Power Data:
- Power generation increased 6.9% YoY (nice)
- Installed capacity of renewables hit 1450 GW, exceeding the installed capacity of thermal power
(a meaningless milestone)
- Renewable energy met 30% of power consumption (a big milestone)
I find Grandma sitting in front of her timber home, carefully tending a small charcoal fire.
The sign behind her says "Grandma's Milk Tea".
"Grandma's Milk Tea? So...are you the Grandma?"
"That's me!" she replies cheerfully.
"How much for a cup?"
"Fifteen yuan. Do you want to try?"
"Okay, we'll have one please"
She motions us to sit on some small stools next to the fire while she prepares the tea in a ceramic pot over the fire, a combination of Pu'er tea, dried flowers, milk, and rock sugar.
We're at Wengji Village, (翁基村) a small natural village in Jingmaishan. It's a Blang ethnicity minority village with a total population of 334.
It is a very minor tourist attraction. On Ctrip, it has 31 reviews.
That's why I'm here - I'm trying to get off the beaten path...