Capacity Building for the Rapid Commercialization of Renewable Energy in China

Representatives from the major stakeholders of all the first year technology application projects were among the 50 attendees of a three-day Orientation Workshop held in August 1999 in Qingdao. The workshop provided an important management tool to introduce Project goals and objectives, regulations, and requirements to project participants. UNDP, UNDESA, the SETC and local governments presented guidelines and regulations for procurement and implementation of Project activities.

The selection criteria for technology application projects and expectations of the results of their implementation were explained. In addition to operational requirements for implementation of Project activities, workshop participants gained a better understanding of how individual projects are coordinated with the national strategy for technology promotion and replication.

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CREIA Inaugural Institutional Workshop, Beijing, January 26 - 27^th 2000

The CREIA institutional workshop, convened by the Project Management Office of UNDP/GEF Project, took place in Beijing on January 26-27^th, 2000. The meeting was chaired by Mr. Zhu Junsheng, Director of CREIA. More than 40 persons representing 19 enterprises from the Chinese renewable energy industry participated to the workshop. Participants demonstrated strong support for the establishment of CREIA, which is expected to help overcome many of the obstacles presently facing the industry, in addition to representing the Chinese industry abroad. Representatives jointly drafted and adopted a "Proposal on the Establishment of CREIA".

Representatives agreed that CREIA would have three fundamental functions: CREIA will serve as a bridge between regulatory authorities, research institutes and industry professionals, providing a forum to discuss RE development at the national level and subsequently to advise the Government of China on strategic policy formulation. CREIA will be a window bringing together national and international project developers and investors. It will promote technology transfer and raise awareness of renewable energy investment opportunities through the development of an online Investment Opportunity Facility, and through regional networking meetings and training activities. The Association will provide a network for its members from the Chinese RE business community, currently lacking a medium to communicate across their respective subsectors, and a platform to voice their concerns collectively.

Renewable Energy Business Development and Financing Workshop, Beijing, April 5 – 7^th 2000

The Renewable Energy Business Development and Financing Workshop was conducted in Beijing in April and attracted 120 attendees. The workshop formally initiated the strategic planning process for the Project's commercialization implementation strategy. The workshop was conducted in two stages. Firstly, officials from government organizations, experts from inside and outside China, and representatives of banks, made presentations in a plenary session. Secondly, working groups were formed to focus on biogas, wind power, solar thermal, wind/solar hybrid systems and bagasse co-generation. Obstacles to commercialization and financing of renewable energy applications in China were discussed by each group. Finally, working groups made recommendations for specific activities to be supported by the SETC UNDP/GEF Project.

Outcomes included broad multiple stakeholder input for Project strategic planning from market sector working groups, establishment of a precedent for inclusive participation in the Project's planning and implementation activities, and positive engagement of several key groups in the government, domestic banking, and several other sectors.

Full workshop proceedings are available from the PMO

CREIA Renewable Energy Project Management Training Programme, Beijing, 12-15 July, 2000

A Renewable Energy Project Management Training Programme was held in Beijing from 12-15 July 2000. The training was conducted by the Project contractors for the development of the Chinese Renewable Energy Industries Association (CREIA) - Alternative Energy Development Inc. (USA), IT Power Ltd (UK), and the Center for Renewable Energy Development (PR China) - and the programme targeted CREIA board members, the CREIA operational staff, relevant government officials, and selected renewable energy developers and financiers.

The primary objectives of the training programme were to enhance renewable energy project identification skills, project assessment and project preparation capabilities, as well as awareness of international and domestic commercial and concessional sources of finance for renewable energy projects, guidance for a financially self-sustained operation of CREIA, and for a successful implementation of the CREIA supported Investment Opportunity Facility (IOF).

The course also addressed the development of analytical techniques to screen projects, investors, and developers, focusing on concepts such as minimizing technology, project, and financial risks, rigorous financial and economic analyses, full risk assessment, environmental and social assessment, professional history and financial soundness of investors and developers.International and domestic sources of finance and criteria of investment funds were exposed, detailing commercial sources of finance, emerging and concessional sources of finance, and financing models for renewable energy projects.

The three days course in Beijing was complemented by a fourth day study tour to three leading renewable energy industries in the Beijing area.

Full workshop proceedings are available from the PMO

Hybrid System Design and Integration Workshop,

Beijing August 29th -31st 2000

From 29^th-31^st August 2000 the ongoing SETC UNDP/GEF Project Capacity Building for the Rapid Commercialization of Renewable Energy in China held a Hybrid Systems Design and Integration Workshop at the Yanxi Lake Hotel, outside Beijing. This was the first in a series of capacity building activities to support the commercialization of village-scale hybrid power systems in China.

The workshop was attended by 22 Chinese participants representing 11 local design groups, and three experts from leading international hybrid groups, AES (Australia), NREL (USA), and RISO (Denmark). Topics covered included the present status of application of village–scale hybrid systems in different provinces of China; the state-of-the art in international system design and advanced commercially available components; best practice experiences in solving institutional problems associated with cost recovery, business development, O&M, servicing etc.; and computer training on the latest hybrid system design tools. In addition, the meeting served to promote sharing of experiences between local design groups and to build links between local and international component suppliers and system integrators for information exchange and business development.

The workshop received a favorable evaluation by participants, who also provided some helpful suggestions for future events. These will include focused technical training and more detailed consideration of planning, business, and institutional issues.

Full workshop proceedings are available from the PMO

Standards for Solar Water Heaters Orientation Workshop,
Beijing September 14th -15th 2000

The Solar Water Heater Standards Orientation Workshop, organized by the Chinese Standard Research Center and supported by the SETC UNDP/GEF Project, was held in Beijing on September 14-15, 2000. The workshop was devised by a project working group (consisting of China National Institute of Standardization, Beijing Solar Energy Research Institute, Profession Committee of the Exploitation of Solar Energy of Chinese Society for Energy Sources of the Countryside) set up to ensure effective implementation of activities in this arena. The meeting attracted 34 attendees, including domestic experts and entrepreneurs, and also drew on the experiences of two leading international experts, Graham L Morrison (New South Wales University, Australia) and Dr. Bart Van Der Ree (Ecofys Company, Holland).

1. Status of SWH standards in China and Framework of a Future standards system

Although China has developed certain number of standards on solar water heaters In the past 20 years, these standards were not developed systematically. A standard system at the national level is urgently in need. In consultation with technical experts, enterprise representatives, research institute and universities, the project group will prepare a proposed solar water heaters standard system which will guide standards development and revision work in the coming years.

2. National standard list urgently needed to be developed in the near future

According to the presentations made by experts at the workshop, a rough list was made of the standards needed to be developed:

- Technical specifications for the design, installation, checking and accepting for solar water heating system;

- Technical specifications for flat type solar water heaters;

- Testing method for the performance of flat type solar water heaters;

- Testing method for the reliable and enduring ability of vacuum tube solar water heaters;

- Testing method for the performance of vacuum tube solar water heaters;

- Technical specifications for vacuum tube solar water heaters;

- Testing method for quality and safety requirements of the component (mainly water tank) of solar water heaters.

3. The establishment of a national quality testing and inspection center

Participants of the workshop unanimously suggested that quality testing and inspection center of national level be established as quickly as possible. They also emphasized that the quality-testing and inspection center should be fair, impartial, and independent. Participants agreed that the location of the centre should be decided by a public bidding process and several bodies expressed their interest in participating in such a centre.

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Annual Chinese Solar Industry Meeting Kunming, October 15-17, 2000

Over 200 companies attended the Chinese Solar Industry annual meeting in Kunming, Yunnan province, from October 15-17, 2000. The meeting was co-sponsored by the Solar PV branch of the China Solar Energy Association (CSEA) and by the Chinese Renewable Energy Industries Association (CREIA). CREIA organized several sessions on Market Development Strategies for the Chinese PV Industry, which were integrated in the meeting's agenda in cooperation with CSEA.

   This CREIA sponsored event addressed current financial and institutional barriers to PV industry development in China, and contributed to devising strategies for PV market expansion. The workshop addressed PV market development including the building-integrated PV market, PV marketing, grid-connected PV applications, and current technology trends, covering notably new materials and new trends in manufacturing.

    This meeting played a key role in promoting CREIA and in expanding the association's membership base among the Chinese solar industry.

Full workshop proceedings are available from the PMO

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China International Energy Efficiency, Renewable Energy, and Environment Exhibition and Conference

November 28th -1st December 2000

Between November 28th -1st December 2000 around over 50 thousand people visited the stands of 200 companies in the first China International Energy Efficiency, Renewable Energy, and Environment Exhibition and Conference in Beijing. Wan Guo Quan, Vice Chairman of the NPPCC, and Wang Wanbin, Vice-Chairman of SETC, lent high level Government support to the event, helping to stimulate significant media coverage, including coverage on national TV and articles in the national press.

   National and international experts and professionals presented papers and exchanged views throughout the four day conference sessions on Renewable Energy, Energy Efficiency, and the Environment. Individual sessions in the Renewable Energy track were dedicated to Wind Power Business Development, Solar Thermal Development, Renewable Energy and the Western Regions Development Initiative, and Biomass.

     The atmosphere in the exhibition hall was very much one of a business hungry trade fair, not of an inward looking clique. As well as Chinese companies, there was a strong international presence at the exhibition, with stands representing companies from Canada, Denmark, Italy, the Netherlands, UK, and USA.

The event was widely heralded as a success, and a broad consensus of delegates expressed their desire to see such an event held on a regular basis in future.

Full proceedings from the exhibition and conference are available form the China International Science Centre

Email cisc@midwest.com.cn

Fax + 86 10 6515 8442

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February 26th - 28th

First Biogas Regional Development Workshop (for livestock farms), Hangzhou

   The Industrial Scale Biogas Energy Project Development Workshop was held in Hangzhou during February 26-28, 2001. Over 130 representatives of livestock farms, biogas project developers, local and national government key decision makers, and international experts attended the first workshop in China that was designed to create a specific forum to promote business development between livestock farm owners and managers and biogas project developers.

     A major focus of the workshop was to disseminate technical and financial information for anaerobic biogas digestion systems for wastewater treatment to large and medium scale livestock farmers in the mid-eastern and southern region of China. Enforcement of wastewater discharge standards by national and local regulators and opportunities for profitable investment projects are two driving forces for biogas technology dissemination. The regional focus of the workshop ensured that local resources and participants were mobilized to leverage business opportunities and take advantage of local benefits and support offered by municipal and regional governments.

    International experts from the Netherlands, Denmark, and the U.K. highlighted differences in European and Chinese approaches and offered recommendations for improving the investment potential for biogas plants in China. A number of policy recommendations emerged from the workshop related to development of a general grid interconnection policy in China, development of a standard power purchase agreement, land use policies, and financing incentives.

   The workshop produced several signed contracts and initiated numerous business discussions that are in the process of being followed up. One example of a follow up event is a tour being organized by the Hangzhou Energy and Environment Engineering Design Institute in Zhejiang for large-scale livestock farm representatives from Guangdong to Denmark for business development purposes.

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   22^nd – 25^th March 2001
Renewable Energy Finance Workshop, Shanghai

    Over 75 representatives of domestic and international institutional and private investment firms, domestic renewable energy companies, and local government officials attended the first workshop in China that specifically offered a forum for introductions between investment institutions and the Chinese renewable energy industry. Prior to this event, most attention in China has been focused on engaging the domestic banking industry in renewable energy project financing. The workshop was very productive as an information exchange forum, a clear exposition of the needs and expectations of the investment and renewable industry sectors, and as a development forum for next steps for increasing business cooperation between both sectors.

Challenges identified include lack of investment-grade feasibility studies and project proposals, uncertainties associated with the business environment in China, lack of an expert pool of professional project developers, and lack of financial and managerial transparency in many renewable energy companies. In addition, strong trends identified include increasing interest among renewable energy companies in being listed on stock exchanges, strong interest from institutional and private investors in making “green” investments in China’s renewable markets, and a gradual trend toward larger project scale and more sophisticated and standard international financing practices. One important opportunity as an outcome of the workshop was strong interest from specific NGOs for creating one or more renewable energy investment funds in China. 　





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March 26th - April 2nd

Business Training and Village Power Rural Electrification Workshop, Xining

CREIA and the PMO conducted the Business Training and Village Power Rural Electrification Workshop in Xining in Qinghai Province during March 26 through April 2. The event was held in conjunction with a PV Entrepreneurial Business Training Event, supported by WWF and the W.A.Jones Foundation which took place from 26^th to 29^th March.   Over 80 representatives from solar companies, hybrid system integrators, village communities, local and national government decision makers, and international business and investment companies attended the first forum in China that assembled end users and developers of hybrid village power systems for a common discussion. Major findings of the workshop are summarized below

   Solar Home Systems Market

The PV home system market in Western China is growing slowly relative to rural renewable energy markets in many other developing countries. One of the reasons for this is because of intense price competition in the marketplace, which has driven profit margins to below 4%. A low-level of familiarity with PV products in the marketplace means that good products must compete directly on price with poor products. As a result, companies struggle to provide adequate after-sales service, and have little capital to invest in business expansion. Dealer networks, the engine of market expansion in many other developing countries, are relatively under-developed in Western China. New product development, brand marketing, and maintenance contracts are three strategies companies could use to increase sales and profits. A consumer education program on the use, benefits, and standards of performance for renewable energy would be extremely useful in promoting the use of renewables and setting standards for product performance. There is also a need for targeted and professionally delivered financing and business development services in this region.

Village Power Commercialization

The high upfront investment cost of village systems is the first challenge faced by project developers and communities alike. Project financing packages are usually assembled from several sources, and include a large portion of grant support. While improvements in cost recovery mean that future projects should have less reliance on grant support, complicated mixed finance arrangements will continue to be required.   One element currently missing is a mechanism through which villages can access credit for community projects. In combination with other finance, such a credit mechanism would provide a stepping-stone to the next stage of commercialization of villages hybrid power systems. Ownership and management issues have also limited the success of many technically sound systems installed to date.   A further difficulty lies in uncertainty in legal rights and obligations of private individuals or enterprizes supplying energy services to off-grid consumers. Regulation is needed here and liberalization to allow new players to participate in a historically monopoly market.

Generally, the workshop accepted that in specific circumstances it should be possible to fully commercialize village power systems in China (in terms of generating a return on an investment). However, many delegates felt that for the majority of villages, some support for the initial investment will continue to be required. All agreed that the operation and maintenance of these systems can already be placed on a commercial footing. The Project’s three technology application projects will make a valuable contribution by demonstrating commercial viability in this area.

     As a result of the workshop, the Poverty Alleviation Office in Beijing will support two community power systems in Hebei and is developing six additional projects in Xinjiang with a system integrator in Beijing. Another important outcome of the workshop was a conceptual draft plan for supporting business models for village power commercialization using the vehicle of a multiple-village development project, including enterprise development a

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Workshop on Solar Water Heaters (Devices) Standardization

14^th-15^th of September in 2000, SETC and UNDP/GEF Capacity building for the rapid commercialization of renewable energy in China project management office (PMO) committed to China National Institute of Standard to convene Workshop on Solar Water Heaters (Devices) Standardization. Relevant official leaders from SETC, Ministry of Since and Technology, Ministry of Agriculture, and some experts from institutions such as China National Institute of Standard, Beijing Solar Institute, China Solar Energy Utilization Committee, Tsinghua University, National Institute of Metrology, Chinese Academy of Sciences etc., representatives from enterprises such as Shangdong Himin group, Beijing Tianpu Solar company, and also international experts from Australia and Netherlands.

The Workshop is one of the main activities in Capacity building for the rapid commercialization of renewable energy in China Project Management Office and SETC supported “National Solar Water Heater Standard, test and certificate project”. The major purpose is to give an assessment on the present solar water heater accessory and national standard, base on the international standard of Solar energy utilization, suggest the mechanism for Solar Water Heater standard and the standard project needs to be established in near term, at the mean while, collect the attitudes and suggestions from different parties for the establishment of National testing center.

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Updated 6/6/2002