OREANDA-NEWS. May 23, 2013. Here is the truth about China's energy development: on one hand, new energies such as wind are developing fast and China has the largest installed capacity of wind power; on the other hand, China suffers from severe surplus wind and significantly decreased utilization efficiency.

How should we look at it? How to solve the problem of new energy being abundant to be wasted? How to push for the next round of electricity system reform? The country's former chief of NEA, Chairman of Expert Advisory Committee, National Energy Commission, Mr. Zhang Guobao answers all these hot issues in an interview with Xinhua News Agency.

Wind power generation accounts for only 2%: Serious waste of wind in some regions
Xinhua: China has been encouraging wind power in recent years. But then why there is so much overplus wind?

Zhang Baoguo: China has become the country with the largest installed capacity of wind power with rapid growth in recent years. In 2012, the electricity fueled by non-fossil energy reached 1,070TWh, 21.4% of the total national generation. The main contributor was hydropower, which was about 800TWh, accounting for 17.4%. Wind power was indeed developing fast. Last year, the electricity fueled by wind was 100.4TWh. Though it surpassed nuclear power, it only accounted for 2% of the national total.

China's wind resources concentrate in Inner Mongolia, Northeast and Northwest. Some regions have a high proportion of wind power (higher than 20%). However, due to lagging construction of transmission lines, substantial wind power cannot be sent out but has to be abandoned. These problems do not exist in the middle and eastern part of China. The country wasted 20TWh of wind power in 2012.

It's predicted that surplus water will be more serious this year. Since June, 10 800MW generators of the world's largest capacity in Xiluodu and Xiangjiaba hydropower stations will be put into operation one by one. However, the power transmission channel is lagging behind. 20TWh of hydropower expects to be wasted this year.

Why the capacity is excessive? The key is to optimize energy structure.

Xinhua: Now new energy develops in full swing. Has the capacity become excessive?

Zhang Guobao: there is a saying now claiming the production capacity of new energy is excessive. Actually there is just more equipment than needed. The equipment manufacturers suffer from limited export. They are struggling for survival due to overcapacity. But new energy operators are doing ok. In fact, the new energy industry is highly marketized. There are many private companies who can make their own judgment and take their own risks. The government is considering canceling some administrative examinations and approvals and focusing on making policies so that it can lower the lost and enhance its support for new technologies.

Xinhua: Does abandoned wind and water reflect the problems in China’s energy structure?

Zhang Guobao: This year, a long-lasting haze in many provinces and cities shocked the Chinese, which triggered a huge discussion on a transformation of China’s economic development, environmental protection, development mode and industrial structure. The mid and eastern China suffers from severe air pollution. Meanwhile, abandoning water and wind shows the problems in the country’s new energy development. The waste of clean energy shouldn’t be happening.

In the current energy structure, coal accounts for 60% in primary energy. The installed capacity of coal-fired units accounts for 78% of generation facilities. Coal-fueled electricity is always high in capacity. We often say that the China’s coal-dominated energy structure is difficult to change, which not only reflects the situation of the energy structure, but also tampers with the confidence to develop non-coal consumption. In recent years, China keeps increasing its energy consumption. Its supply becomes unable to sustain and there is an almost unbearable pressure on emission. Therefore, China has to adjust the national energy structure to develop RE and increase the proportion of non-fossil energy.

Xinhua: Then how to solve the problem of surplus wind and how to optimize the energy structure?

Zhang Guobao: We need multiple measures. First, we need to accelerate the development of wind and nuclear power. It’s not a problem to accommodate the electricity but it is imperative to approve the UHV line between western Inner Mongolia’s Xilinhaote and Nanjing, the transmission channel for the wind farms in Jiuquan, Gansu. It’s also urgent to construct the delivering channel for the hydropower stations on both banks of Xiluodu. Nuclear power needs to be vigorously developed. It only accounts for 1.97% of the total electricity. The proportion should be up to 8% by 2030. We should be bolder in importing natural gas resources, increasing its proportion in primary energy to 10% from the current 5.4%. The total coal consumption should be controlled within 4 billion tons, or even less.

Reform needs to consider cost and set productivity free.

Xinhua: How to promote the following electricity reform in the spotlight?

Zhang Guobao: I have noticed that some people argued to continue splitting the grid in the discussion on electricity system reform during the Two Sessions this year. However, whether to split or not is not the standard for electricity system reform. It should be whether it’s conducive to productivity. To split grid cannot break monopoly. What’s more, China has about 100 decentralized grids. The grids in western Inner Mongolia, Maoxian, and Wenchuan of Sichuan are all privately run. Also there are some forestry grids, animal husbandry grids and hydropower grids.

China enjoyed a rapid development in its power industry in recent years, which indicates that the power reform does not hinder the productivity. About 10 years ago, Russia established its UES. It learned from China’s electricity reform to separate the generation factories from the power grids. Then UES became 6 generation companies. There were more than 40 generation companies plus those from its republics. Russia separated its power transmission from power distribution and established a national transmission company and a distribution company. However, after years’ practice, Russia found out that the cost increased instead of becoming less. On March 30, Putin held a work conference on electricity, whose main topic was to establish a unified grid in Russia.

Every country has its own conditions and standards. Their specific reforms should be catered to their own situation. I think our electricity reform should advance with the times. The tariff reform is one of the key elements. It not only concerns the energy reform but also involves the pricing system reform. And whether to separate transmission from distribution or whether to use on-grid price bidding should be open to discussion. Actually we used to apply this mechanism. However, due to power tension and immature conditions, we had to give it up. All in all, reform must consider the cost and suit the development phase, conducive to further liberate the productive forces and beneficial to the power construction and its long-term development.