China's new energy and renewable energy development: opportunities, constraints

I. Opportunities for the development of new and renewable energy in China

The development of new energy and renewable energy in China has good resource conditions, to cope with the needs of global climate change and to adapt to the grim reality of domestic "transformation mode and adjustment structure", which has created good internal and external conditions for the development of renewable energy in China. In recent years, China has promulgated and implemented the "Renewable Energy Law", which puts forward the target of 15% energy consumption by non-fossil energy by 2020, and puts forward higher requirements for the development of renewable energy. The State Council has made a decision on accelerating the cultivation and development of strategic emerging industries, taking new energy as an important part of China's strategic new industries, which has greatly promoted the development of China's new energy and renewable energy, achieved breakthrough progress in renewable energy technology, market and service system, and laid an important foundation for the large-scale development of renewable energy.

Actively promoted by the policy, the pattern of rapid development of new energy in our country has initially taken shape at present. In 2011, China's hydropower installed capacity exceeded 200 million kilowatts, ranking first in the world. The total installed capacity of wind power has reached 47 million kilowatts, about 100 times that of 2002, and has doubled over the years, ranking second in the world. Solar installed capacity reached 3 million kilowatts, becoming the fastest growing region in the world; The installed capacity of nuclear power plants is over 10 million kilowatts, with 27 units under construction, ranking first in the world. In the next ten years, China will gradually change the current coal-based energy structure, increase the proportion of high-quality fossil energy, and significantly increase the supply capacity of natural gas, nuclear energy and renewable energy.

By the end of 2010, the amount of renewable energy included in energy statistics such as hydropower, wind power and biological liquid fuel was about 262 million tons of standard coal, accounting for about 8.06% of the total energy consumption. Taking into account non-commercial varieties such as biogas and solar thermal utilization, the annual utilization of renewable energy is 306 million tons of standard coal, accounting for about 9.42% of the total energy consumption in the year. Compared with 2005, the contribution rate of renewable energy in China's 11th Five-Year Plan period is increasing at an average annual rate of 12.6%.

Second, the constraints facing the development of new energy and renewable energy in China

Grid-connected consumption difficulties. Grid-connected and consumption problems are the biggest bottlenecks restricting the effective use of new and renewable energy and industrial development in China. China's installed capacity of wind power has ranked first in the world, the growth rate of solar power generation ranks first in the world, because the actual power generation of new energy has a large gap compared with the design level, "wind abandonment", "light abandonment", power limiting phenomenon is serious, and the development is difficult to sustain. According to China's current relevant laws and regulations, new energy power must be unified through the large power grid after voltage enhancement, and distributed rooftop photovoltaic power generation, small-scale wind power generation, distributed natural gas multi-generation power plants are very difficult in our country.

Industrial behavior disorder. For a long time, China's renewable energy industry lacks clear and feasible development goals, coupled with the lack of technical standards and mandatory testing and certification systems, enterprises have no corresponding technical thresholds, and some projects have been launched without scientific decision-making, which once led to the "explosive" expansion of the industry. At present, polysilicon production, solar cells and wind power equipment manufacturing has far exceeded the market capacity. In order to seize the market, some products are put on the market in large quantities without any testing, resulting in vicious competition. Due to the small scale and scattered production enterprises such as polysilicon, energy consumption and material consumption are even more than twice that of foreign countries, which aggravate the pressure of energy conservation and emission reduction. At the same time, the quality of new energy generation is unsatisfactory, safety accidents are frequent, and industrial development is slowing down.

Critical technologies are lacking. The lack of key technologies has greatly hindered the formation of the competitiveness of China's new energy industry. China is heavily dependent on foreign countries in several key technologies and equipment fields of new energy, and 92% of the key components of China's fan rely on imports; 90% of the silicon materials and equipment needed for photovoltaic power generation are imported. The current popular advanced megawatt wind turbines, biomass direct combustion power generation boilers, solar photovoltaic polycrystalline silicon raw materials and other high-tech, high-value equipment and materials are also all dependent on imports. The lack of effective digestion, absorption and re-innovation of the technical equipment purchased with huge sums of money, and most of the profits are obtained by developed countries. Although China already has Goldwind, Suntech and other high-tech new energy enterprises that have the ability to compete with foreign manufacturers, the vast majority of new energy equipment manufacturers still have problems such as small scale, low degree of intensification, backward technology, and generally low product technical content and unstable quality, which can only meet low-end demand.

The cost is obviously high. The high cost and high price of new energy is an important obstacle to its promotion and application. Due to the complex technology and small scale, the cost of new energy infrastructure and unit investment is generally higher than that of conventional energy, resulting in the unit cost of new energy products is also difficult to decrease. At present, the product cost is lower than conventional energy or comparable only solar thermal utilization, geothermal direct utilization, biogas, all kinds of new energy power generation costs are higher than coal-fired power generation and hydropower. Assuming that the cost of coal-fired power generation is 1, the cost of nuclear power generation is slightly higher than that of coal power, the cost of biomass power generation is 1.5, the cost of wind power is 1.7, and the cost of solar photovoltaic power generation is 11-18. Fuel ethanol and biodiesel also cost more than gasoline and diesel. High cost will inhibit the expansion of new energy market capacity; On the contrary, the small market will cause obstacles to the cost reduction of new energy, forming a vicious circle. The market itself cannot break this vicious circle, it must rely on the government's preferential policies and incentives.

Pricing model affects the development of new energy. Although the "Electricity price Reform Plan" in 2003 has designed a scientific electricity price pricing model, the current income of grid enterprises is still all from the "price difference" between the power generation link and the terminal sales link. Wind power, photovoltaic power generation costs are high, the Internet price is high, but according to the unified terminal price sales, resulting in small profit margins of grid enterprises, do not want to accept new energy power. This restricts the development of new energy to a certain extent.

Third, the development of new energy and renewable energy should handle several relations

In order to successfully achieve the goals of the 12th Five-Year Plan and international commitments on energy conservation and emission reduction, the following relations should be properly handled in the future development of new and renewable energy sources:

The relationship between clean utilization of traditional energy and development of renewable energy. In Europe and the United States, new energy has developed rapidly in recent years, because the total energy consumption has no longer grown, or the growth is very small, and the new energy is mainly to supplement and gradually replace the increased part of fossil energy. China's resource endowment and development stage determine that China's coal-based energy structure and thermal power pattern will be difficult to change for a long time, and new energy can only be used as a supplement to traditional energy in a long period of time. At present, the world's energy consumption is still in the transition stage from the traditional coal era to the oil and gas era, and the clean new energy era has not yet arrived, and China is no exception. Therefore, at this stage, China should correctly evaluate the market development potential and application prospects of new energy, and actively explore the development and utilization of new energy sources at the same time, seek truth from facts, scientific planning, further increase the clean transformation of traditional energy, and increase the development of oil and gas resources, especially unconventional oil and gas resources. We will establish a pattern of energy consumption with traditional energy as the mainstay and new energy as the supplement.

The relationship between economy and advanced nature. The development potential of new energy is large, the environmental impact is small, most can be sustainable use, is an important direction to develop future energy, but also in line with human energy use clean, quality, high efficiency requirements, its advanced nature is self-evident. However, the current new energy is still in the preliminary development stage, the technical level is not high, the development cost is high, and the lack of economy is also an indisputable fact. From the perspective of sustainable development, in the case that the new energy economy is not mature, we should adhere to the basic principle of "technically feasible and economically reasonable", do what we can, develop moderately, and not rush forward, regardless of the cost, so as to avoid losses caused by "haste without speed". At this stage, sufficient policy support can be given to the research and experiment of new energy in terms of policy, and strive to make new energy compete with traditional coal-fired power generation in terms of technology and economy.

The relationship between small-scale distributed and large-scale centralized. New energy has the characteristics of low energy density, randomness and intermittence, and cannot be commercially stored, according to technical and economic constraints, it is appropriate to adopt a decentralized and distributed development method, and use it locally and nearby." The transmission mode of "large-scale, high-centralization, long-distance and high-voltage transmission" not only requires a lot of investment, but also affects the operation security of the power grid. Therefore, the new energy and renewable energy should be adapted to local conditions, and the model of centralized development and decentralized development should be adopted. According to the distribution of renewable energy resources and electricity market, the development and construction of renewable energy in resource-rich areas will be intensified, and the advantages of centralized, contiguous and large-scale development of renewable energy areas will be built. At the same time, give full play to the advantages of wide distribution of renewable energy resources and diverse forms of products, encourage all regions to develop and utilize various types of renewable energy locally, vigorously promote the application of distributed renewable energy, and form a centralized development and decentralized development and distributed utilization of renewable energy development model.

The relationship between market mechanism and state guidance. At the initial stage of development, new energy needs the support and guidance of national policies, but it should follow the law of the market and cannot die. The ultimate goal of policy support is to build an endogenous market-oriented mechanism to support the sustainable development of new energy. At present, which new energy has more development prospects is still debated, which as a strategic focus for promotion and application, should be determined by the market. In addition, public finance support for new energy should have budgetary constraints. Theoretically speaking, public finance is an economic behavior in which the state (government) concentrates part of social resources to provide public goods and services for the market, mainly to meet the public needs of society. The new energy product itself is a competitive commodity, in the case of limited national financial resources, public financial expenditure should focus on supporting those non-competitive public utilities, and the growth of competitive products should be more determined by the market.

The relationship between financial subsidies and improved efficiency. At this stage, the development of new energy cannot be separated from government subsidies, but the government subsidy policy needs to implement the principle of efficiency and reduce the burden brought by the development of new energy to the national economy as much as possible. At present, China's subsidy policy for new energy enterprises is insufficient. First, it does not fully encourage advanced. Government departments only examine and approve the cost declared by enterprises, "high cost grants high subsidies, low cost does not give subsidies"; Second, it is easy to induce moral hazard. Some companies are no longer trying to control costs, but lie about the scale of construction, the timing of production and financial data; Third, the amount of subsidies often cannot keep up with technological progress and economic changes generated by market supply and demand, and in 2009, there was even a mistake that the amount of subsidies announced by government departments was higher than the overall cost of rooftop photovoltaic projects. Such subsidies have the opposite effect, and it is easy to cause the loss of national property.

Fourth, some suggestions on promoting the development of new and renewable energy in China

Reasonably expected scale of development. Accelerating the development and utilization of renewable energy and gradually increasing the proportion of high-quality clean renewable energy in the energy structure has become the only way for China to cope with the increasingly severe energy and environmental problems. To this end, we must actively promote the development of various types of renewable energy, but we must control the pace and avoid a "great leap forward" -style rush. In the past two months, China has taken a series of measures against the "double reverse" of our photovoltaic products in Europe and the United States, aiming to start the domestic photovoltaic market. Therefore, the development goal of 21 million kilowatts of photovoltaic should be appropriately adjusted for the "Twelfth Five-Year Plan".

Improve the pricing mechanism. At present, the price of energy in our country is difficult to fully reflect its scarcity and external costs. Therefore, it is necessary to establish and improve the system of paid use of resources and the price formation mechanism of ecological compensation system that reflect market supply and demand and resource scarcity, reflect ecological value and intergenerational compensation, and fully reflect the comprehensive social benefits such as the environmental value of renewable energy. On the one hand, the renewable energy pricing mechanism should be further improved, and factors such as price, technological innovation and sustainable development should be comprehensively considered in pricing. On the other hand, the environmental compensation mechanism should be further improved to internalize the external costs of traditional energy sources.

We will deepen reform of the electric power system. In order to create good conditions for renewable energy power generation, we should actively promote the reform of the relevant power system. First, the relevant provisions of the power Law should be amended to encourage new energy to be "dispersed online and consumed locally", and to build a legal and policy system conducive to the development of distributed energy. Second, deepen the reform of the power system, reform the profit model of power grid enterprises, establish an open and transparent power market mechanism with orderly competition, and provide institutional guarantee for improving energy utilization efficiency and promoting the development of new energy. Third, implement the renewable energy quota system as soon as possible, clarify the responsibilities and obligations of local governments, power grid companies, and power developers in the development, utilization and consumption of new energy, and focus on solving the enthusiasm of power grid enterprises to accept wind power from the system. Fourth, establish a technical support system and management system for connecting distributed energy to the grid, encourage the self-use of distributed energy, and explore the mechanism for supplying excess power to surrounding users.

We will formulate fiscal and tax policies consistent with the principle of efficiency. China's economic strength is still ranked after the world's 100, can not afford to use inexpensive energy, the kind of view that as long as it is "new energy", it is natural to be subsidized by the state is one-sided. Therefore, the first subsidy policy is to reflect the stage, only in the new energy technology, industry can not compete with traditional energy at a specific stage. Today's subsidies are to reduce subsidies tomorrow and no longer subsidies the day after tomorrow, and after new energy has a certain competitiveness, the policy should be withdrawn in time. The second is to consider growth, the object of subsidies for commercial new energy projects should be the technology that has growth and can expand through its own technological progress and commercial scale, and constantly reduce costs. Third, the subsidy should be closely linked to the actual power generation performance, and it is proposed to change the "change the pre-installation subsidy" to the "post-installation subsidy", and correct the one-sided idea of heavy construction scale and light power generation.