OREANDA-NEWS. July 24, 2014. Concentrated Solar Power development in China is currently focused on the internal market. But the development of a pan-Asian energy network could make exports possible, too.

Concentrated Solar Power development in China is currently focused on the internal market. But the development of a pan-Asian energy network could make exports possible, too.

China’s nascent CSP industry could one day export power across Asia if a vision for a pan-regional energy network becomes reality.

Grenatec, an advocacy group touting plans for a pan-Asian energy infrastructure, is using a maritime dispute between the Philippines and China to call for the creation of a transnational gas pipeline that could act as a precursor to a wider power network across the region.

The network could eventually be used to ship CSP and other power sources between countries as far apart as the People’s Republic of China (PRC) and Australia, says Grenatec’s principal, Stewart Taggart.

The Philippines is currently locked in international arbitration tribunal proceedings against China after the Asian giant began construction works on islands that Manila claims are within its 200-nautical mile exclusive economic zone.

Asia has an abundance of low-emission energy it can tap, but the challenge lies in developing the infrastructure to get it to market. Grenatec envisions a grand energy network that would initially be based on oil and gas transmission and eventually stretched from China to Australia, allowing the Chinese to export CSP abroad.

Grenatec says a face-saving way out of the tensions would be for both countries to thrash out a deal on joint development areas linked to an energy network circling the South China Sea.

“While arbitration is pursued, bilateral negotiation, China’s favoured strategy, should also be tried,” says Grenatec. “This could focus on agreeing joint development areas. This is an idea China, the Philippines and Vietnam all have expressed support for in principal.”

The Australia-based think tank continues: “As China’s domestic infrastructure needs wind down, China’s infrastructure state champions need new markets. These commercial needs may be part of what's stoking South China Sea territorial tension.

“With joint development areas, Chinese state champions like State Grid and China National Offshore Oil Company could build the infrastructure.”

Grand plan

While Grenatec believes the infrastructure would initially be based on oil and gas transmission, its grand plan is for a wider energy network stretching from China to Australia, allowing the Chinese to export renewable power abroad.

China’s National Development and Reform Commission recently announced a 2017 target to grow domestic solar energy capacity to 70GW and wind to 150GW, Grenatec notes.

The group also points out that State Grid chairman Liu Zhenya has written in the Wall Street Journal about China’s commitment to non-fossil fuel sources and its potential to enhance energy exports.

“Zhenya argues cross-border electricity grids may one day deliver sun- and wind-generated electricity over long distances from where they are generated to where consumers are,” says Grenatec.

Taggart claims there is no reason why such a network would not benefit Chinese CSP. “Other south-east Asian countries have been slow to take up CSP,” he notes. “The reason, presumably, is that south-east Asia does not have the direct normal radiation that, say, China has.”

The ability to export power to neighbouring countries would mean Chinese CSP would not necessarily be so dependent on having storage to ensure bankability, which would bring down the cost of plants and ease of deployment.

Indeed, so far the focus of CSP technology development in the country has been on basic pilot plants that do not feature storage, although last December the Asian Development Bank (ADB) announced USD150 million funding for a 50MW plant with a seven-hour thermal energy store.

The project, which is being jointly financed with China General Nuclear Power Corp and the Export-Import Bank of China, will be located in the north-western province of Qinghai.

Pioneering project

“This pioneering project will demonstrate how the PRC could leverage its indigenous solar resources to diversify its energy mix in a sustainable manner,” said Shigeru Yamamura, a senior energy specialist at ADB’s East Asia Department, in a press statement.

“With this comprehensive assistance package of low-cost financing, policy advice and capacity development, we expect successful demonstration will lead to wider uptake of CSP plants in the PRC in the medium term.”

China has an objective of installing 1GW of CSP by next year and 3GW by 2020, while the ADB estimates that, “if timely deployed”, CSP plants can provide up to 15% of the nation’s electricity by 2040.

As previously reported in CSP Today, however, sources on the ground remain sceptical about whether such targets could be achieved in practice.

“To be honest, I see great difficulty for China to meet this objective by 2020 as many supporting mechanisms are still missing at central government level,” says Zhou Lixin, who is in charge of Chinese business development for the German CSP firm Schlaich Bergermann und Partner.

“Without a clear tariff policy, it will be hard for CSP developers to make investment decisions. Though there are many projects which have received government permitting, without a clear tariff the financing and investment return might be a problem.”

Taggart, meanwhile, is realistic about the challenges but remains reluctant to abandon the hope that better interconnections could help solve the region’s energy challenges. “The barriers are old-line, nationalistic, industry-silo thinking,” he says. “Climate change demands we think better.

“Evidence at present is mixed, at best, whether this is really happening as quick as we need it to.”