Energy Insider: China’s Revised Draft Energy Law, Solar Installations Poised for Another Record Year

This week's Caixin energy wrap addresses significant developments in China’s climate and energy sector, including policy updates, industry advancements, and new projects. Key highlights include the release of a revised energy law draft, record-breaking solar installations, the expansion of green electricity trading, the launch of 'flywheel' energy storage, and a successful green hydrogen experiment by a steelmaker. [para. 1]

**China’s Draft Energy Law and Renewable Updates:**

China has released an updated draft of its energy law for public commentary, almost two decades in the making. The draft, published on Sept. 13, stipulates new guidelines for the development and use of renewable energy sources like solar and biomass. It emphasizes the need to upgrade the power grid to support renewable energy, especially clean energy. The law is described as foundational and critical for promoting the high-quality growth of China’s energy sector and ensuring national energy safety. [para. 3][para. 5]

**Record-Breaking Solar Installations:**

China is set to break its annual solar installation record again in 2024, with an anticipated increase of 278 gigawatts (GW), surpassing last year's 217 GW. According to the National Energy Administration, China installed 123.5 GW of solar panels from January to July 2023, bringing the total to 735.6 GW by the end of July. Analysts from Ember predict a 28% higher growth than previously estimated, highlighting the rapid expansion and the global need to adapt energy systems for higher solar power levels. [para. 9][para. 11]

**Flywheel Energy Storage in Shanxi:**

Shanxi province has connected a new energy storage station using advanced 'flywheel' technology to the grid. Developed by China Energy Engineering Group Co. Ltd., the project has a capacity of 30 megawatts, consisting of 12 units with high-speed magnetic levitation rotors. The flywheel technology stores energy in the form of kinetic energy and can reclaim it through deceleration. This project underscores China's pursuit of innovative renewable energy storage solutions, alongside other technologies like compressed air storage and sodium-ion batteries. [para. 15][para. 17]

**Green Electricity Trading Expansion:**

From October 1, distributed renewable power generators, including small-scale stations and rooftop solar farms, will be able to participate in green electricity trading. This move is facilitated through intermediate agencies that aggregate and sell the electricity as a bundle. This change comes amid increasing demand for green electricity by businesses and aims to stabilize the contribution of small power generators to the grid. Distributed solar, particularly rooftop installations, now constitutes 41% of China’s total solar capacity, accelerated by strong government campaigns over the last three years. [para. 21][para. 23]

**Green Hydrogen in Steel Production:**

Hesteel Group, a state-owned firm, has successfully experimented with using green hydrogen instead of coal in steel production. On Sept. 9, hydrogen produced from wind and solar power replaced traditional coal-based coke in the steel-making process, sharply reducing carbon emissions. This successful test is significant as the iron and steel industry is responsible for about 15% of China’s total carbon emissions, the highest among its manufacturing sectors. Green hydrogen could thus play a crucial role in decarbonizing the industry, benefiting downstream sectors like automotive manufacturing by lowering overall carbon footprints. [para. 27][para. 29]