First Major Benefit: Power System Reform
In two months, the Third Plenary Session of the 20th Central Committee of the Communist Party of China will be held in Beijing, focusing on further comprehensive reforms and advancing Chinese-style modernization. On May 23, during an inspection tour in Shandong, General Secretary Xi Jinping held a special forum with entrepreneurs and experts to gather insights on reform. At this forum, nine entrepreneurs and scholars spoke. Liu Mingxing, Chairman of State Power Investment Corporation, was the first to speak, providing opinions and suggestions on deepening power system reform. Each of the General Secretary's forums with entrepreneurs has had historical significance, often leading to major policy decisions or systemic reforms. Looking back, since 2012, such forums have been held three times:
In November 2018, amidst escalating Sino-US trade tensions, the focus was on enhancing self-innovation in foreign trade, manufacturing, and high-tech industries. In July 2020, in the wake of the global economic impact of the public health crisis, the focus was on supporting small and medium-sized enterprises and promoting digital transformation.
This latest forum centers on comprehensive deepening of reform, with power system reform at the forefront. Official media have positioned this forum as preparation for the Third Plenary Session, underscoring the significance of power system reform. This is a "systemic reform" involving top-level design and is a crucial part of the comprehensive reform series aimed at advancing Chinese-style modernization. It is far from a minor adjustment. How will it be reformed? Some hints and signals are already emerging. On May 14, before this forum, the National Development and Reform Commission released the "Basic Rules for the Operation of the Power Market," effective July 1. An official from the National Energy Administration stated that the "Rules" provide foundational guidelines for building a unified national power market system, promoting an efficient, standardized, competitive, and open market.
Considering the current trends in energy transition, non-fossil energy generation is becoming the mainstay of installed capacity and electricity production, while fossil energy generation is transitioning to a supporting role. New business entities such as new energy storage, virtual power plants, and load aggregators are rapidly developing. The "Rules" address these new trends by defining new business entities and clarifying transactions for ancillary services and capacity trading, aiming to build a power market system that accommodates a high proportion of renewable energy integration, reliable power support from traditional sources, and the growth of new business entities. It is now clear that "non-fossil energy generation is gradually becoming the mainstay of installed capacity and electricity production," with photovoltaic (PV) power expected to take the lead role. For PV to truly become a primary energy source, its providers—the PV manufacturing enterprises—must thrive, avoiding the pitfalls of vicious competition and price wars. To become a mainstay energy source, PV must achieve grid parity with storage—meaning the total cost of PV power plus storage systems must equal that of thermal power generation. When this parity is achieved, PV and storage will fully replace fossil fuels as the main power support. Power system reform will undoubtedly further remove obstacles and constraints for the development of new energy in China, creating enormous policy dividends. This is a crucial part of boosting the economy and a vital force for Chinese-style modernization.
Second Major Benefit: New Photovoltaic Sand Control Policies
On November 29, 2023, the largest single photovoltaic sand control project in the country, the Three Gorges Group's 2 million kilowatt photovoltaic sand control project at the Kubuqi base in West Inner Mongolia, was connected to the grid, restoring and managing 100,000 acres of desert. From planting grass and trees to "planting" new energy, China has provided a model for global green, low-carbon energy transition and desert management. On May 17, the Comprehensive Department of the National Energy Administration and the Office of the National Forestry and Grassland Administration issued a notice on matters related to the orderly advancement of photovoltaic sand control project development and construction. At first glance, the term "orderly" suggests that current photovoltaic sand control efforts might be disorganized and in need of regulation. Indeed, a thorough reading of the notice reveals such concerns, but the fundamental purpose of this notification is precisely to maximize the role and value of photovoltaic sand control. Only through orderly regulation can long-term, significant development be achieved! The notice stipulates that photovoltaic sand control project sites should primarily utilize untreated desertified land that meets the conditions for photovoltaic power station construction. The selection of sites and the scale of construction should be reasonably determined based on local meteorological, water resource, geological, topographical, and vegetation characteristics. This suggests that there may currently be issues with site selection.
A search for "photovoltaic sand control" on the National Energy Administration’s website reveals over 30 related articles, underscoring the importance of this work. In October 2023, the main officials of the National Energy Administration made a special trip to the Kubuqi Desert in Inner Mongolia to investigate the 2 million kilowatt photovoltaic project and the situation of photovoltaic sand control. China has 1.73 million square kilometers of desertified land, of which about 530,000 square kilometers (31%) can be rehabilitated. China has 1.22 million square kilometers of arable land, some of which is undergoing desertification. If the 530,000 square kilometers of desertified land could be turned into good land, the country's arable land area would increase by 43%! Even if only half of these 530,000 square kilometers were handed over to photovoltaic projects for management, the potential installed capacity would be enormous. Take the Qinghai Talatan Power Station as an example: it covers 609 square kilometers and has an installed capacity of 2.2 GW. Without considering the improvements in module power and station equipment optimization that increase installed capacity per unit area, if half of the 530,000 square kilometers of desert were converted into photovoltaic power stations based on Talatan's standards, the installed capacity would be 1,000 GW! This figure significantly exceeds our current cumulative photovoltaic installed capacity. Photovoltaic sand control offers numerous benefits. The modules shield the ground from direct sunlight, effectively reducing surface water evaporation by 20% to 30%, and photovoltaic power stations can effectively reduce wind speeds, improving the survival environment for plants and promoting the growth of grasses. Surface vegetation, in turn, helps to stabilize the soil and retain moisture.Moreover, many desert areas in the west have abundant groundwater, but desert management requires vegetation irrigation. In many desert regions, sand control is challenging mainly because the construction and operation costs of fuel-powered machinery and transmission equipment are too high, and the lack of water leads to low plant survival rates. Now, using solar-powered pumps can directly address this problem.
According to a reporter from Economic Daily, the sixth phase of the Three North Shelterbelt Project will make "photovoltaic sand control" one of its main objectives. It requires combining "control" and "use" of the desert, focusing on desert, Gobi, and desert areas, actively promoting the coordinated development of photovoltaic power generation, ecological restoration, and modern agriculture and animal husbandry. By 2030, a number of major projects for desertification control and integrated wind-photovoltaic power generation will be implemented, exploring a new path for Chinese-style photovoltaic sand control.
Currently, the sixth phase of the Three North Shelterbelt Project has deployed key photovoltaic sand control projects such as the 2 million kilowatt photovoltaic sand control project in Kubuqi, Inner Mongolia, and the 1.5 million kilowatt photovoltaic sand control projects in Gansu Hexi, Wuwei, and Zhangye, among others, totaling 20 major projects in the photovoltaic sand control field. Honestly, with the vast 530,000 square kilometers of desert in northwest China as a foundation, what does Chinese photovoltaics have to fear?
Third Major Benefit: Strengthening the Central Energy Base
According to Xinhua News Agency, on May 27, the Political Bureau of the Central Committee of the Communist Party of China held a meeting to review several policy measures to promote the rapid rise of the central region in the new era and trial regulations for accountability in preventing and resolving financial risks. The meeting was presided over by General Secretary Xi Jinping. The meeting emphasized that promoting the rise of the central region is a major strategic decision made by the CPC Central Committee with Xi Jinping at its core. The strategic intention of the CPC Central Committee must be deeply understood, with a focus on the central region's strategic positioning as an important grain production base, energy and raw material base, modern equipment manufacturing and high-tech industrial base, and comprehensive transportation hub in China. Efforts should be concentrated on advancing key tasks to achieve significant breakthroughs in the rise of the central region. Shanxi, Anhui, Jiangxi, Henan, Hubei, and Hunan, the six central provinces, must take primary responsibility, gather strong working forces, and strive to write a new chapter in the rise of the central region. The six central provinces—Shanxi, Anhui, Jiangxi, Henan, Hubei, and Hunan—are to develop these four major bases, one of which is the energy and raw materials base.
Traditionally, China's western region has been considered the most important energy base, rich in fossil energy resources and well-suited for developing new energy sources. The western region plays an irreplaceable role in ensuring national energy security. However, the policy measures for promoting the rise of the central region in the new era include developing an energy and raw materials base in the central region as well. How should this be understood? Raw materials refer to both metallic and non-metallic minerals, many of which are found in the central region, such as copper in Jiangxi, aluminum in Henan, and phosphorus in Hubei.
In fact, the central region is the main coal-producing area in China, with coal reserves accounting for about half of the national total. Shanxi is the most concentrated, responsible for nearly 60% of the country's coal supply. Henan and Anhui are also major coal-producing areas, each producing over 100 million tons in 2023. Currently, Shanxi, Henan, and Anhui are all facing significant energy transitions. Anhui is at the forefront, emerging as a new photovoltaic capital, rivaling Jiangsu. Shanxi is vigorously promoting green and low-carbon energy transitions and is currently developing a photovoltaic manufacturing cluster worth hundreds of billions of yuan. Henan is also a significant photovoltaic province, leading in distributed photovoltaics. In 2023, Henan added nearly 14GW of new distributed photovoltaic installations! Recently, distributed photovoltaics, particularly rural household systems, have cooled off somewhat. However, Henan is now releasing a wave of distributed reform benefits: wall-crossing electricity sales!
On April 18, the Henan Development and Reform Commission issued three consultation drafts for "integrated projects of source-grid-load-storage," effectively announcing the launch of wall-crossing electricity sales for distributed photovoltaic projects, opening new market opportunities for commercial and industrial distributed photovoltaic projects. This allows distributed photovoltaic projects to sell electricity directly to nearby energy consumers through the distribution network. Previously, distributed photovoltaic projects could only be built within the electricity-consuming enterprise's premises and were limited to self-sufficiency, unable to sell electricity to neighboring enterprises. Under Henan's new policy, industrial enterprises' integrated source-grid-load-storage projects can now be constructed outside the factory boundaries and involve third-party investment for electricity trading, effectively realizing wall-crossing electricity sales. This is the power of reform.
A：Carbon Rush Technology
L：https://mp.weixin.qq.com/s/OBWuSl_S4hCjfm5etXnJHg