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Opinions on promoting renewable energy based heat supply (draft for comments)
Original title: 国家能源局综合司关于征求对《关于促进可再生能源供热的意见》的函
Links: Original source (in Chinese) (link).
Note: throughout this text, 供热 has been translated as heat supply, e.i., as referring to heat supplied for industrial processes or for heating of buildings. 供暖 has been translated as heating (supply), e.i., as referring to heating of buildings only.
Annex 1
Opinions on promoting renewable energy based heat supply
(Draft for comments)
Renewable energy based heat supply mainly includes geothermal heat supply, biomass energy based heat supply, solar thermal utilization, wind power based heat supply and other types。Actively promoting the use of renewable energy based heat supply, in line with China's strategic requirements for promoting structural reform of the supply side, is an important component of implementing livelihood improvement projects, controlling air pollution, and implementing a revolution in energy production and consumption, which is of great significance in realizing China's energy transition and the construction of an ecological civilization。Renewable energy heat supply has many types of technology, a wide range of applications, has centralized and distributed uses, and can play an important role in replacing distributed coal use in small-scale coal-fired boilers and household stoves。in order to accelerate and promote China's utilization of renewable energy heat supply, the following opinions have been drafted：
I. Overall requirements
(1) Guiding principles
Fully implement the spirit of the 18th National Congress and the third, fourth, fifth and sixth plenary sessions of the 18th Central Committee of the Communist Party of China. In accordance with the strategic thinking proposed by General Secretary Xi Jinping on promoting a revolution in energy production and consumption, and on the basis of the strategic plan for the promotion of clean energy heating put forward by the Central Committee of the Communist Party of China and the State Council, deepen the structural supply side reform, focusing on replacing direct-fired coal-fired urban heat supply and urban and rural residential coal stoves, and through the comprehensive promotion of renewable energy heating technology in urban and rural areas, reduce or avoid direct burning of coal in densely populated areas, reduce air pollution, slow the dependence on natural gas supply, effectively support the energy transition and industrial restructuring, and promote a smooth construction of the ecological civilization。
(2) Basic principles
—— Prioritized utilization, cost-effective。Establish a new concept of energy consumption prioritizing renewable energy use. Let renewable energy based heat supply become an important component of regional energy planning, in particular in urban planning of cities and towns and construction of 'new villages'. Properly assess renewable energy heat supply resources, and integrate renewable energy based heat supply into urban development planning。
—— In accordance with local conditions, overall optimization 。On the basis of regional resource conditions, economic development levels, infrastructure conditions, plan as a whole the various types of resources and technology for heat supply, and select the suitable routes to renewable energy based heating。Focus on centralized district heating in urban areas in the North, supplemented by decentralized, clean heating。In rural areas, in accordance with population density and resource conditions, and in accordance with local conditions, develop centralized or decentralized clean heating。
—— Complementary diversification, comprehensive integration。Fully utilize the advantages of various types of renewable energy, promote the integration of renewable energy and conventional energy systems, co-ordinate the planning of regional heat, electricity and other energy systems, and establish a comprehensive heat supply system that uses synergies and complementarity of renewable energy and traditional energy sources, with cascaded utilization。
——Link various levels, comprehensive promotion。Build a scientific and efficient governmental promotion system and working mechanisms, clarify national, provincial, city and county level government responsibilities。Comprehensively considering the urgency of air pollution control, economic affordability, the difficulty of promotion measures and other factors, comprehensively promote clean district heating mainly at the three levels of key urban districts, areas with urban and rural districts, and villages。
(iii) Targets
By 2020, total floor area receiving renewable energy based heating will be 3,500 million square meters, an increase of approximately 2,800 million square meters from 2015, and equal to about 150 million tons of standard coal。In the Beijing-Tianjin-Hebei region and surrounding areas, floor area receiving renewable energy based heating will be 1,000 million square meters; in the Yangtze River Delta area 500 million square meters will be receiving renewable energy based heating (cooling)。In urban and rural areas, achieve large-scale replacement of household coal use for heating with renewable energy alternatives。
Key indicators for 2020 development and utilization of renewable energy based heat supply
| Content | Scale of utilization | Standard coal eq. (kt/year) | |
| Value | Unit | ||
| 1. Geothermal heating and cooling | 1,600 | Mln m2 | 70,000 |
| 2. Biomass based heat supply | 1,000 | 30,000 | |
| 3. Renewable electricity based heating | 500 | 15,000 | |
| 4. Solar energy based heating | 400 | 12,000 | |
| 5. Air-source and water-source heat pumps, industrial heat supply, agricultural heat supply (crop cultivation and animal breeding) etc. | 23,000 | ||
| Total | 3,500 | 150,000 | |
2. Main tasks
(iv) Establish the concept of prioritizing renewable energy sources, good comprehensive planning of heat supply
Establish the concept of prioritized utilization of renewable energy, let renewable energy based heat supply be an important component of urban and rural energy planning and the prioritized method of heat supply. In the process of planning the replacement of coal-fired stoves in rural areas, the construction of new urban districts, the transformation of old urban districts, the construction of 'new villages', relocation of population, and the construction of industrial parks (districts), properly assess resources for renewable energy based heat supply, and establish a comprehensive heat supply system that uses synergies and complementarity of renewable energy and traditional energy sources, with cascaded utilization。In the key air pollution control areas of the "2+26" cities, in the areas in the "Three Norths" region which have surplus renewable energy, and in the regional energy transition comprehensive demonstration districts, comprehensively promote renewable energy based heating supply, and actively promote the renewable energy based industrial heat supply。
(v) Actively promote the use of geothermal energy based heat
Encourage geothermal energy resource-rich regions to establish geothermal heat utilization systems。In geothermal resource-rich regions, vigorously promote medium and deep geothermal energy based heating supply. In central cities and towns with good resource conditions, let geothermal energy become the first choice in centralized heating supply sources。In central eastern and southern regions, with hot summers and cold winters, and where both heating and cooling demand are strong, develop the utilization of shallow geothermal energy。
(vi) Actively develop biomass based heat supply
In accordance with to local conditions, promote the comprehensive development of biomass energy from agricultural and forestry residues, municipal solid urban waste and other biomass sources. Promote advanced, low-emission, compacted biomass fuel based heating. In areas with substantial amounts of agricultural crop residue resources, promote biomass cogeneration based centralized district heating or industrial heat supply。
(vii) Integrate renewable energy consumption with the promotion of heat supply based on clean electricity
In the "Three Norths" region, which has rich wind and solar energy resources, high heat supply demand, and a surplus of electricity supply, focusing on addressing the issue of wind and PV curtailment, combine renewable energy consumption with the implementation of clean electricity based heat supply, and use the surplus renewable electricity to replace coal-fired heat supply sources. At the same time, in accordance with local conditions, promote a comprehensive green heat supply system based on renewable electricity, geothermal energy, and low temperature heat sources, and increase the localized consumption of clean electricity。
(viii) Vigorously promote the diversified development of solar thermal energy utilization
On the basis of continued promotion of building-integrated solar energy, accelerate the application of various types of medium and high temperature solar thermal technologies in industry, to meet the demand for hot water, heating, steam, refrigeration and other types of heating/cooling needs。In appropriate areas, promote heat supply projects using inter-seasonal solar thermal storage。
(ix) Vigorously promote the utilization of renewable energy based heat supply in urban areas
In areas with traditional centralized district heating, in combination with efforts to replace coal-based heat supply in urban areas, promote electric boilers with heat storage, medium and deep geothermal energy based heating, biomass cogeneration and compacted fuel based heating, and other renewable energy technologies。In areas with traditional non-centralized heating supply, focus on popularizing geothermal heating and cooling, solar energy, distributed renewable energy heating and other technologies。In pharmaceutical, ceramics, paper, clothing and textile and other manufacturing fields, make full use of geothermal, biomass, solar energy and other renewable energy sources to make these a basic source of heat in conventional energy systems。Utilize heat pumps and other technologies to realize the utilization of industrial waste and waste heat as an energy source。
(x) Comprehensive promotion of renewable energy as alternative to household use of coal in rural areas
In densely populated central cities and towns, rural districts of cities, areas with urban and rural districts and other areas, focus on expansion and extension of the scope of centralized district heating through the urban heating supply network。In rural areas that are relatively far from urban centers, focus on the use of small-scale centralized or decentralized heating supply, and in accordance with local conditions, adopt clean electric heating, solar heating, geothermal heating, biogas heating, compacted biomass fuel based heating as well as heating with a combination of sources, etc.。
(xi) Innovative heat supply demonstration models
Through coupling of renewable and fossil energy sources, renewable energy system integration and other models, establish a batch of distributed energy plant demonstration projects, and use "Internet + energy" to establish energy supply side and demand side response mechanisms。Through inter-regional clean power consumption, explore the coordinated development of renewable energy in the Beijing-Tianjin-Hebei region and surrounding areas。In cogeneration plants, district power plants and other heat supply systems, pilot and promote various types of thermal energy storage technology, including short-term heat storage and inter-seasonal heat storage, in order to provide flexibility to electric power and heat supply systems, and optimize the production and supply of electricity and heat。
3. Improve support policies and safeguard measures
(xii) Strengthen the guidance of planning
The energy department of the State Council, in conjunction with the Ministry of land and resources, the ministry of housing and urban and rural construction etc., will improve urban and rural heat supply planning and administrative management systems and the relevant technical standards, and formulate the basic rationale and overall direction of development of renewable energy based heat supply, to guide the nationwide scientific, orderly, large-scale promotion of renewable energy。Local energy authorities shall, in conjunction with departments for land and resources, housing and construction and others, on the basis of national planning requirements, properly carry out feasibility studies for renewable energy development and utilization, and incorporate renewable energy heat supply into local special sectoral plans for infrastructure construction, and co-ordinate the development of renewable energy heat supply and utilization。Regional energy transition comprehensive demonstration projects (districts) should establish development goals for renewable energy heat supply, incorporate renewable energy heat supply into overall district planning, and include it in local 'ecological civilization construction' indicators assessment system, as a sub-item of the energy-saving and emission reduction assessment。
(xiii) Perfect the electricity price support policies
Establish an electricity price mechanism that promotes heating supply based on wind power and other renewable power sources. Those wind power project that participate in heating supply shall utilize a predetermined share of their power output for heating supply purposes. Power grid enterprises shall reduce the valley period electricity transmission and distribution price for wind power projects participating in heating supply, so that the heat supply price for heat from wind and coal-fired heating supply sources are basically at the same level。Residential electricity prices, and their peak and valley electricity prices, shall be applicable to electricity consumption by medium and deep geothermal energy based heating and heat pump based heating (cooling) [China energy portal note: residential rates are lower than normal industrial and commercial rates]。Establish an electricity trading platform for electric heating users, so that a united group of electric heating users, under the centralized organization of the government, can obtain low-cost electricity through market based transactions with wind power enterprises。
(xiv) Intensify the support for geothermal energy
Strengthen geothermal resources exploration efforts, support capable enterprises to actively participate in geothermal exploration and assessment, and support those enterprises involved in the exploration and assessment with prioritized granting of business licences for the exploitation of geothermal resources, and integrate exploration and assessment data into national data management platforms。Adopt administrative management measures for the development and utilization of geothermal energy, coordinate collection and administrative management methods for fees for geothermal exploration rights, geothermal brine mining, geothermal water resource use compensation and other fees, and strengthen the administrative management of construction of major projects for the development and utilization of geothermal energy。Implement free or reduced water resources and mineral resources fees etc. for geothermal heating projects that carry out complete re-injection and comply with environmental protection standards。
(xv) Optimize biomass support policies
Encourage and support retrofitting for cogeneration by biomass power generation enterprises; the government will provide certain investment support to enterprises that retrofit。Construction of heat supply pipe networks will be included in the scope for investment support from the central budget。Feed-in tariff subsidy funds for biomass cogeneration enterprises are prioritized and guaranteed to be dispensed without delay。Research the establishment and operating mechanisms of specialized biomass feedstock collection systems; areas where biomass feedstock is collected and piled up will be treated in accordance with land use policies for enterprises with public benefits。
(xvi) Improve the administrative management system for renewable energy heat supply
Accelerate the opening up of access into the urban heat supply market, guiding various types of development enterprises to enter the urban heat supply market。Promote tenders and other market-based methods to select heat supply market actors。Guide the combination of various market actors in centralized heat supply concession districts through mergers, acquisitions, reorganization, etc., and expand the scope of heat supply concession areas。Strengthen the interconnection of different sources of heat supply in heat supply districts, to realize optimal scheduling of the heat supply system。Support and encourage the development of integrated business management of energy sources, networks, power plants and heat users of cogeneration enterprises, reduce intermediate management links, and reduce heat supply costs。Heat supply enterprises that have integrated fees for heat sources, pipe networks, and heat generation may, through concession rights or other ways, receive government support in the form of guaranteed heat supply districts and corresponding heat supply subsidies etc；Heat supply enterprises that, through heat markets, sell their heat to heating supply enterprises can, under the coordination of the government, sign a long-term heat supply agreement with the heating supply enterprises, guaranteeing the long-term stable operation of renewable energy heat supply enterprises；For users not covered by centralized heat supply, promote decentralized renewable heat supply, by combining user investment and government subsidies。
(xvii) Improve the fiscal and financial policy system for renewable energy based heating
Land used for renewable energy based heating projects shall be treated in accordance with accordance with land use policies for enterprises with public benefits。Regarding taxation, public infrastructure projects and residential heating supply enterprises will enjoy the relevant tax benefits。At the same time, incorporate renewable energy based heat supply for prioritized support in the national policy developmental funds, and encourage the issuance of green bonds。Introduce a price difference based compensation policy, and increase financial support for local projects that actively work to meet the heating needs of the local residents, that have substantial retro-fitting tasks, that have effective retro-fitting results, and that strictly abide by environmental standards。
(xviii) Strengthen environmental supervision
Establish strict environmental and emission standards, and coordinate the environmental protection bureau and other relevant departments in strengthening the whole process of environmental regulation of renewable energy heat supply projects。Establish and improve the market and environmental monitoring systems for geothermal energy development and utilization, implement real-time monitoring and dynamic evaluation of geothermal energy resources exploration, development and utilization, and environmental effects。Fully implementation of geothermal tail water re-injection, to achieve extraction and re-injection balance, and to avoid damage to groundwater and the environment。Formulate biomass boiler pollutant emission standards, and obligatory emission reduction equipment for biomass based heating boilers. At the same time, install online monitoring systems, in order to meet emission standards。
Annex 2
Explanation on preparation of the "Opinions on promoting renewable energy based heat supply (Draft for comments)"
1. Background
(i) Development status of renewable energy heating supply
1. Current situation
Renewable energy heating supply includes geothermal, biomass, solar thermal, clean electricity based heating, etc。Heat supply is a basic energy need for people's livelihood and many industrial production activities. Heat supply accounted for circa 50% of the global final energy consumption, and renewable energy based heat supply is an important source for heat consumption。
Currently, China's residential heating supply is predominately coal based。At the end of 2016, Shanxi, Shandong, Henan and other provinces had centralized urban district heating rates of about 80%. Of this, about 90% was coal-fired cogeneration and district heating boilers; renewable and other clean energy based heating accounted for 10%。At the same time, heating in rural areas is predominantly based on coal stoves. Rural areas are the most difficult areas for promoting clean heating and air pollution prevention and control。Taking Shandong Province as an example, apart from some areas with better conditions and new rural districts which use natural gas, electricity, biomass, biogas and other clean energy based heating, more than 85% is heating based on small (household) scale coal stoves, with an annual coal consumption of about 30 million tons, leading to increased of pollutant emissions by 30% during the winter heating period。
Renewable energy based heat supply is clean and low-carbon, can be used in centralized or decentralized heating, and can play an important role in providing clean heating and replacing coal stoves for heating in the North, in urban areas, but especially in rural areas。
2. Development status
China's potential for renewable energy based heat supply is very large。Studies estimate that the potential of renewable energy based heat supply is upwards of 3,000 million tons of standard coal equivalent。The potential of geothermal energy resources are the largest. According to results of a 2015 resource survey by the Ministry of Land and Resources, the exploitable shallow geothermal energy resources in the country's 336 cities at prefecture-level or above is equivalent to 700 million tons of standard coal, whilst the country's exploitable deep geothermal resources are equivalent to 1.9 billion tons of standard coal。Nation-wide crop straw, agricultural processing residues, forestry residues, energy crops, municipal waste, organic waste and other biomass resources that can be used for energy purposes, have an annual heat supply potential equivalent to 460 million tons of standard coal. Of this, crop stalks and other agricultural and forestry residues have an annual heat supply potential equivalent to 400 million tons of standard coal。Assuming 10% of electricity produced from wind power and other renewable electricity generation is utilized for heat supply purposes, it can supply heating to 500 million square meters by 2020, equivalent to 15 million tons of standard coal。In recent years, China's renewable energy development has had good momentum。Various regions, through the launch of pilot demonstration, financial subsidies, etc. have promoted clean heating, and renewable energy based heating already has a certain footing。Renewable energy heating area is used for a floor area of more than 72 million square meters in Hebei, close to 100 million square meters in Shandong, about 26 million square meters in Henan, and about 12 million square meters in Shanxi。
The various types of renewable energy based heat supply are growing rapidly; solar thermal utilization continued to grow; clean heat supply with wind power and biomass energy heat supply have, on the basis of demonstration projects, begun to enter scaled-up development stage; the development and utilization of geothermal energy is showing a more rapid growth; different cities are, in accordance with local conditions, putting renewable energy based heat supply into practice。For example, medium and deep geothermal heat is used for centralized heating for a total of 3.3 million square meters in Xiong county in Hebei Province, providing geothermal heating for almost all of the county seat, and the heating costs are also slightly lower than they were with coal-fired heating in the past。In Qixia City, Shandong, biomass cogeneration supplies centralized heating to 2.5 million square meters of floor area, basically realizing biomass based heating for the districts of the county seat。The Tibetan area in Yunnan uses small hydropower for heating supply, with phase 1 already completed in Shangri-La City, providing heating to a floor area of 4.27 million square meters。By the end of 2015, various types of renewable energy based heat supply, including wind power based clean heat supply, biomass heat supply, geothermal heat supply, and other types, are used for heating for about 700 million square meters of floor area, equivalent to about 20 million tons of standard coal。
From field research, renewable energy based heating is already proven feasible (see Annex)。Currently, annual household heating costs are 2000-3000 RMB, standard charges are generally 20 RMB/square meter。The costs of heating with air source heat pumps, when applying industrial and commercial electricity prices (using 0.75 RMB/kWh to calculate), are about 34 RMB/square meter. When applying the residential valley electricity prices, heating costs can be reduced to 20 about RMB/square meter。The heating costs with medium and deep geothermal based heating, when applying residential electricity prices (using 0.5 RMB/kWh to calculate) are about 20 RMB/square meter, close to the currently realized residential heating charges。If transmission and distribution fees are significantly reduced, and if wind power enterprises provide a predetermined share of electricity at low cost, wind power based heating costs can be kept at 25 RMB/square meter。If electricity prices for clean heating are further reduced, medium and deep geothermal energy and heat pump based heating costs can be basically the same with the current coal-fired heating costs。
Renewable energy that is suited for distributed use can play an important role in providing clean heating and replacing coal stoves in rural areas。Therefore, under the same support policy conditions, renewable energy based heating has more advantages. When considering a variety of clean energy heating methods, priority should be given to renewable energy sources。
(ii) Existing problems
Currently, there are some common problems in China's institutional mechanisms for heat supply：First, the marketization of urban heat supply is low, urban heat supply markets are not open to private investment, heat supply enterprises rely on government subsidies to survive, and it is difficult for renewable energy based heat supply enterprises, which have new technologies and cost advantages, to enter the urban heat supply market。Second, heat metering and charges are unscientific. The heating supply enterprises charge the user according to floor area have obtained a monopoly position under the protection of government policy. The heat price charged per GJ by clean heat supply enterprises that sell to heating supply enterprises has come under pressure; and the difference in return on investment between these two links is relatively large。Third, the supporting infrastructure for heat supply is outdated, and there is a large construction investment gap. The investment for construction of district heating and pipe networks for new districts can be solved by urban construction supporting fees (such as the district heating and pipe network charge of 55 RMB/square meter in Zhengzhou City), but there are no funding sources for construction and retro-fitting of district heating and pipe networks in old districts, and there is a lack of reliable funding channels for investment in district heating and pipe networks in rural areas。
At the same time, there are some specific problems and difficulties in the field of renewable energy heat supply, mainly in：
1. There is a lack of unified planning for clean heating
First, local governments, in the development of heat supply planning, still give less consideration to renewable energy based heat supply, and heat supply districts have already long been assigned to coal-fired heat supply enterprises. Apart from individual large-scale central enterprises having the capability to enter the local heat supply market (development of geothermal research projects is usually by Sinopec Star Company, and investment and development in biomass power generation projects by Everbright International, CECEP, and other central enterprises), it is very difficult for private capital to enter the market。Second, not enough importance is attached to renewable energy heating. Apart from some provinces (autonomous regions, municipalities) that have prepared geothermal energy development and utilization plans, and a small number of cities (counties) that have developed a clean energy development plan (such as Lankao County, Yongcheng City in Henan, which developed a renewable energy-based rural energy transition demonstration area construction plan), most areas do not consider prioritizing the use of local renewable energy in the preparation of heating plans。
2. There is a lack of support policy for renewable energy based heat supply
With respect to wind power based clean heating。First, wind power companies sell their electricity through the grid to electric heating enterprises, but face constraints from current practices in electricity trading and electricity prices。Wind power companies can utilize the electricity outside of the guaranteed purchased number of hours for heating at low power costs, but in many areas the amount of electricity dispatched does not meet the minimum number of hours of guaranteed purchased electricity. Further, the transmission and distribution price mechanism is not flexible, so the cost of electric heating cannot be comparable to the cost of coal-fired heating。For example, in the Zhangjiakou area, when utilizing the valley electricity to power heat storage heating, and considering only the electricity component in operating costs, the break-even point for electric heating supply enterprises would be at an electricity price of circa 0.20 RMB/kWh. Taking into account the return on investment in fixed assets, equipment maintenance and other factors, only a valley electricity price of 0.15 RMB/kWh would make large-scale widespread applications valuable。Wind power enterprises can supply electricity at a price of 0,05 RMB/kWh, but this will still require the power grid enterprises to reduce transmission and distribution costs to 0.1 RMB/kWh or below。Second, the large-scale use of wind power for heating supply requires expansion of the distribution network, which needs national government investment policy support。
With respect to geothermal based heat supply。First, the extent of geothermal resources surveying is generally low. For example, in Henan Province, only 11 prefecture-level cities evaluated their shallow geothermal energy resources; other cities and counties do not have data on geothermal energy resources, and geothermal energy utilization plans lack resource information basis。Second, government departments lack coordination mechanisms, with administrative management functions scattered in departments of the ministry of land and resources, housing and urban rural development, the energy administration and other departments. There is no coordination of relevant policies, limiting the development and utilization of geothermal energy。Third, geothermal heating projects are charged electricity prices for large industry (about 0.75 RMB/kWh), resulting in a longer payback period for project investments。Fourth, technical standards for geothermal resources development are not complete, and do not suit the needs of geothermal energy development and utilization。
With respect to biomass based heat supply。First, fuel costs are high. Plant-gate prices for biomass feedstock for the Qixia biomass cogeneration project in Shandong are close to 400 RMB/ton, and there are difficulties with feedstock collection. The enterprises' production costs for heating supply remain high, at 28.18 RMB/square meter in 2016, whilst government departments approved residential heating charges of 23 RMB/square meter。Second, there is no agricultural and forestry biomass collection subsidy policy。At present, waste incineration power generation enterprises receive waste disposal subsidies of 60 to 100 RMB/ton of residential waste. Biomass power generation utilizes agricultural and forestry residues, equivalent to disposing of agricultural waste, but there is no subsidy policy for waste disposal of agricultural and forestry residues。Third, there is a lack of specific air pollutant emission standards that suit the special environmentally friendly characteristics of compacted biomass fuel boilers。Fourth, a complete professionalized system for biomass feedstock collection, transportation, storage and supply is lacking. The efficiency of storage and transportation is low, and has difficulties meeting the needs of large-scale utilization。
(iii) Tasks already carried out
in the past two years, the General Office of the NEA organized research on policies for renewable energy heat supply, and promoted pilot areas in a number of areas。The NEA has commissioned the National Renewable Energy Center, in conjunction with the Energy Conservation Consulting Co., Ltd., the National Geothermal Energy Research Center and other units and experts in related fields, to carry out research on feasibility, technical measures, financial feasibility, investment and operational mechanisms, and other aspects of renewable energy based heat supply, and achieved certain results。
In December 2016, General Secretary Xi Jinping, in the fourteenth meeting of the Leading Group for Financial and Economic Affairs, provided important instructions on tasks for clean heating in the Northern regions. We have seriously studied the the spirit of the instructions of General Secretary Xi, and on the basis of research and other preparatory work, put forward tentative plans for promoting renewable energy based heat supply, and sped up the formulation of the "Opinions on promoting renewable energy based heat supply (draft for comments)" (hereinafter referred to the "Opinions (draft for comments)")。
Over February 16-22, 2017, in accordance with the NEA's integrated carrying out of tasks on clean heating in northern China, the General Office and the Department of Electric Power of the NEA, the department of Air of the Ministry of Environmental Protection and relevant research institutions formed a research group, and led by Comrade Liang Zhipeng, visited Hebei, Shanxi, Shandong, Henan and other areas to carry out research on renewable energy based heating supply, focusing on understanding the development of renewable energy sources and existing problems, studying support policy measures, and incorporated relevant content into these "Opinions"
2. Key content of the "Opinions (draft for comments)"
The main content of the "Opinions (draft for comments)" includes three parts of overall requirements, main tasks, and improvements of support policies and measures, with a total of 18 sections, that cover the guiding ideology, basic principles, objectives, main tasks, policy measures and other aspects of promoting the development of renewable energy based heat supply
(i) On guiding ideology and basic principles
The "Opinions (draft for comments)" focuses on replacing direct-fired coal-fired urban heat supply and residential coal stoves, and in accordance with the principles of "prioritized use, cost-effectiveness, complementary diversification, comprehensive integration", establishes the concept of prioritized development of renewable energy. With renewable energy supply in regional energy planning and solving distributed coal use as the primary content, and through the comprehensive promotion of renewable energy heating technology in urban and rural areas, reduce or avoid direct burning of coal in densely populated areas, reduce air pollution, slow the dependence on natural gas supply, effectively support the energy transition and industrial restructuring, and lay a solid foundation for the construction of the ecological civilization。
(ii) On objectives
The "Opinions (draft for comments)" proposes that by 2020, through the vigorous development of renewable energy as an alternative to coal-fired heat supply, the nationwide floor area supplied with heating from renewable energy sources reaches 3.5 billion square meters, an increase of about 2.8 billion square meters from 2015, with various types of renewable energy heating substituting circa 150 million tons of standard coal。In the Beijing-Tianjin-Hebei region and surrounding areas, a floor area of 1 billion square meters will receive renewable energy heating; in the Yangtze River Delta region 500 million square meters will receive renewable energy heating。This can in particular achieve replacement of a large number of residential coal stoves for heating in urban and rural areas。
(iii) On key tasks
First, establish the concept of prioritizing renewable energy, and do a good job of comprehensive heat supply planning。Second, actively promote the use of geothermal energy。Third, actively develop biomass energy based heat supply。Fourth, combine renewable energy consumption with the promotion of clean electric heat supply。Fifth, vigorously promote the diversified development of solar thermal utilization。In addition, main tasks include the strong promotion of urban renewable energy based heating supply development, the comprehensive promotion of renewable energy in rural areas for the replacement of distributed coal use in small-scale stoves and boilers, and innovative heat supply applications through inter-provincial and inter-regional consumption of clean electricity, etc.。
(iv) Policy measures
In order to fully mobilize local governments' and corporate enthusiasm, and to guarantee achieving the large-scale promotion that renewable energy based heat supply, the "Opinions (draft for comments)" also proposed five supporting policy measures, mainly to strengthen the planning guidance, for the establishment and promotion of electricity pricing mechanisms for heating supply based on wind power and other renewable electricity, for improving the administrative management system of renewable energy based heat supply, for improving the financial and taxation policy system for renewable energy based heating supply, and for the establishment of strict environmental and emission standards, etc。
3. Request for comments
During the drafting process, we included policy suggestions on the contents of the "Opinions (draft for comments)" from the Dept. of Electric Power of the NEA, the Pricing department of the NDRC, and other relevant departments, and had timely communication over the process of signing of related documents on clean heating with these departments. During field research on renewable energy heating in the four provinces in the North, reactions to the views in this "Opinions (draft for comments)" were also gathered from local governments and relevant departments, businesses, research institutions and other organizations, most of which have been fully or partially incorporated embodied in the "Opinions (draft for comments)"。
Annex：Economic comparison of various types of heating supply technologies
Economic comparison of various types of heating supply technologies
| Heat supply method | Investment | Heating supply production costs* | Utilization conditions | Advantages | Problems or barriers |
| Coal-fired boilers | 45 RMB/m2 | 25 RMB/m2
(St. coal price of 660 RMB/tce) |
1. Almost no limitations from climate or geological conditions；
2. Can be used in distributed and centralized heat supply。 |
Low production cost；mature technology；output is easily regulated；not affected by season, region, etc. | Large emissions of pollutants；need for the transport of large volumes of coal；subject to a national phase-out target；large number of old, inefficient boilers |
| Gas-fired boilers | 50 RMB/m2 | 30 RMB/m2
(natural gas price of 3.22 RMB/N.m3) |
1. Almost no limitations from climate or geological conditions；
2. Can be used in distributed and centralized heat supply。 |
Reduced emissions of pollutants to air compared with coal；reduced traffic problems caused by coal and slag transport；small footprint；high thermal efficiency, long lifetime, easy equipment maintenance。 | Fluctuations in natural gas supply and prices；high initial investment and operating costs compared with coal-fired boilers。 |
| Biomass based cogeneration | (ca. 10,000 RMB/kW of electricity generation capacity) | 25 RMB/m2 | 1. Almost no limitations on climatic, and less demanding on geological conditions；
2. Must be built in areas rich in biomass fuels；3. Suitable for district heating。 |
When supported by electricity feed-in tariffs, relatively good economic performance of larger capacity units。 | Collection of biomass feedstock is difficult in some areas；high fuel costs |
| Biomass-fired boilers | 50 RMB/m2 | 25 RMB/m2 | 1. Almost no limitations from climate or geological conditions；
2. Direct-fired biomass combustion boiler must be built in areas rich in biomass fuels；Biomass boilers utilizing compacted biomass fuels must have sufficient market supply of compacted biomass fuels。 |
Output can be better regulated than similar coal-fired boilers。 | Poorer economic performance from high fuel costs；Lack of specific air pollutant discharge standards compatible with the clean environmental characteristics of biomass-fired boilers。 |
| Air-source heat pumps | 125 RMB/m2 | 30 RMB/m2
(Residential electricity price of 0.48 RMB/kWh) |
1. Almost no limitations from geological conditions；
2. Relatively strongly affected by ambient air temperature, lower heating coefficient with lower ambient air temperature, operational limit of -25 ℃, need for the use of auxiliary electric heating in cold areas, promotion of its use from southern to more northern areas in recent years。 |
1. Easy installation, compact, clean；
2. Wide applicability, limited geographical constraints； 3. Year-round heating and cooling。 |
1. High initial investment and operating costs (mainly electricity costs)；
2. Requires improvements to equipment reliability and ease of maintenance of household systems |
| Ground-source heat pumps | 150 RMB/m2 | 25 RMB/m2
(Residential electricity price of 0.48 RMB/kWh) |
1. Installation subject to site requirements and drilling licenses；
2. In general not suitable in areas with relatively soft or rocky soil； 3. More suitable for humid climates。 |
1. Stable and highly efficient operation；
2. Suitable for centralized and distributed heating supply, can also meet summer cooling demand。 |
Relatively high initial investment and operating costs (mainly electricity costs) |
| Medium and deep geothermal heating supply | 180 RMB/m2 | 20 RMB/m2
(Residential electricity price of 0.48 RMB/kWh) |
1. Rich medium and deep geothermal resources；
2. Areas with good geological and mining conditions。 |
1. The technology is mature and reliable；
2. Good heating effect, high stability； 3. Some areas provide retro-fitting investment subsidies。 |
1. Government departments lack a coordination mechanism
2. Relatively high operating costs (mainly electricity costs) 3. The development of technical standards has not been completed, re-injection of fluids in sandstone areas remains difficult, affecting the long-term sustainable utilization of geothermal resources。 |
| Wastewater-source heat pumps | 70 RMB/m2 | 30 RMB/m2
(Industrial and commercial electricity price of 0.8 RMB/kWh) 25 RMB/m2 (Residential electricity price of 0.48 RMB/kWh) |
1. Requires a nearby water source (urban wastewater, rivers, lakes or sea water, industrial wastewater, etc.), and a stable waterflow；
2. Water temperature：urban wastewater at a temperature of 12℃ or above; water quality：PH of 6-8。 |
1. Energy efficient, significant environmental benefits；
2. Stable and reliable operation, several uses for a single machine, wide range of applications。 |
Operation prone to technical problems such as blockage, corrosion, pollution, etc.。 |
| Solar energy based heat supply | Solar thermal collectors：350 RMB/m2 (passive house heating cost of 3000-3500 RMB/m2) | 10 RMB/m2
(indoor temperature of 10°C) 40 RMB/m2 (auxiliary electric heating, indoor temperature of 20℃) |
1. Area requires a certain total amount of annual radiation, for example ≥1750kWh /m2a in very rich resource areas；
2. Not affected by geological conditions。 |
1. Clean and pollution free；
2. More common in individual household application, divided into active and passive types。 |
Issues with winter and summer heat balancing；Lack of uniform standards, and industry has relatively low barriers to entry, affecting construction quality。 |
| Heating supply with electric boilers with heat storage | 100 RMB/m2 | 50 RMB/m2
(Residential electricity prices of 0.3 RMB/kWh in valley and 0.48 RMB/kWh off-peak) |
1. Almost no limitations from climate or geological conditions；
2. Can be used for distributed and centralized heating supply, completed projects in China most commonly used for centralized heating。 |
1. Clean and pollution free on the user side, efficiency of >95%; the entire process is pollution free when using renewable electricity supply；
2. Simple system, easy to operate, flexible output, small footprint, strongly resistant to environmental factors。 |
1. Relatively low overall thermal efficiency and large emission of pollutants when the source of electricity is coal-fired power；
2. Electric boilers using renewable electricity supply are subject to current electricity transactions and price constraints, have relatively high operating costs, and production cost for heat from electric boilers cannot compare with heat supply from coal-fired boilers；The large-scale utilization of wind power for heating supply requires substantial investment for the expansion of electricity distribution networks。 |
* Calculated on the basis of heat consumption in heating supply, electricity prices, fuel prices and other estimates as applicable in the Beijing area
