How can China's northeast overcome its renewable challenges? Report

Insight 30 January 2018

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Report summary

China’s northeast region has been struggling from a slowdown in its economy, a shrinking population and a decline in consumption. Similarly, the power sector has not been immune from this crisis. Suffering from weak demand, excess capacity and an unbalanced power mix, the Northeast faces extremely high renewable curtailment. To better understand the power industry in this region, Wood Mackenzie recently travelled to Jilin, where we visited the State Grid company and several independent power producers. The challenges Jilin has faced are a good representation of renewables development in China as a whole, with many provinces coming up against similar hurdles. Through learning Jilin’s lessons, we hope to shed some light on the region’s future energy layout and rationalisation, and on the implications for China.

The northeast – China's struggling old rustbelt
Excess capacity and the supply mix imbalance set to linger
Renewable curtailment differentiates but generally remains high
How to reduce renewable curtailment?
- Rationalising
- Adding peak-shaving resources
- Building peak-shaving power plants
- Retrofitting coal-fired power plants
- Decoupling heating and power generation
- Encouraging household electric heating
- Penetrating wind electricity to the end-use markets
- Finding new customers outside the region
Conclusion

Tables and charts

This report includes the following images and tables:

Comparison of industrial enterprise profits
Northeast China industrial economy indicators

Northeast power generation capacity, peak and off-peak demand, and grid reserve margin
Comparison of wind generation curtailment rates
Comparison of wind power capacity utilisation
Time-of-use household electric heating prices
Cost comparison of space heating options