Biomass power generation faces challenges in China; manufacturing firms seek breakthroughs overseas

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At the beginning of 2008, biomass power generation projects, which had always seemed to have bright prospects, also appeared to be affected by the severe snow and rain conditions that had caused significant disasters in our country recently; the \"freezing index\" rose sharply. Recently, data from the Energy Research Institute of the **National Development and Reform Commission showed that, based on financial figures provided by domestic biomass power generation plants that are already in operation, such as the Guoneng Shanxian Biomass Power Plant, the China Energy Conservation and Environmental Protection Suqian Biomass Power Plant, and the Hebei JianTou Jinzhou Biomass Power Plant, these pilot projects all incurred losses to varying degrees after receiving the electricity price subsidies stipulated by **, indicating a concerning outlook for their development. 　　Qin Shiping, a researcher at the Energy Research Institute of the National Development and Reform Commission, believes that the main reasons for the losses incurred by most of the existing biomass power generation projects are the increased investment resulting from research and development costs ； Modify duplicate equipment investment ； Increased financial costs due to high investment (interest during the construction period) ； Excessive scale leads to rising prices of raw materials ； Factors such as increased costs due to long debugging cycles. 　　Spring has arrived. In fact, in the face of global warming and the increasing level of carbon dioxide emissions in our country, over the past few years we have been making great efforts to develop the industry related to the utilization of renewable energy sources, with the goal of reaching a certain scale by 2020 in order to address the new challenges related to reducing carbon dioxide emissions on a global scale. According to China’s **Medium- and Long-Term Development Plan for Renewable Energy**, by 2020, renewable energy is expected to account for 15% of the country’s total energy consumption, with the amount of renewable energy used nationwide equivalent to 600 million tons of standard coal. Among them, the total installed capacity for biomass energy will reach 30 million kilowatts, the annual utilization of biogas will reach 44 billion cubic meters, and the annual consumption of biofuel ethanol and biodiesel will reach 12 million tons. Meanwhile, the Renewable Energy Law, which came into effect on January 1, 2006, along with related supporting policies, also made investing in biomass power plants a popular trend at that time. 　　Taking Guoneng Biomass Power Generation Co., Ltd., which was established on July 7, 2005 as a joint venture between the power grid company and Longji Power, as an example, to date this company has set up 14 biomass power generation companies in 14 counties and cities across 9 provinces, including Shanxian and Kenli in Shandong, Anqing and Wangkui in Heilongjiang, and Liaoyuan in Jilin. And 19 biomass power generation projects have been approved by the competent authorities. Cities in Shandong such as Binzhou, Dezhou, Heze, Zibo, and Zaozhuang have already introduced or are in the process of introducing biomass power generation projects. Projects have also begun to be launched in provinces such as Jiangsu, Heilongjiang, and Liaoning. Biomass power generation is gaining momentum across the country, with its market continuing to expand rapidly. 　　“Although there are significant issues with the economic viability of the power generation project, its operation has already generated additional cash income and job opportunities for local farmers. Since biomass power plants that use agricultural waste as raw material can increase farmers’ incomes without disrupting the local agricultural production system, the processes of collecting, storing, and transporting this waste also create numerous job opportunities for farmers. At the same time, areas with abundant crop straw resources are often economically underdeveloped or less developed, and their industries are primarily based on agriculture. The construction of a biomass power plant requires hundreds of millions of yuan in investment, and once it is operational, its sales revenue will also exceed 100 million yuan, making it a significant source of tax revenue for the local area. Moreover, the establishment of such a power plant creates job opportunities locally, and the daily spending of the plant’s staff boosts the local service industry. Therefore, the local authorities are positive about building biomass power plants in their region. ” Qin Shiping’s words explain the underlying reasons for the rapid development of biomass power plants in recent years. 　　Development is hindered. In fact, biomass power plants also serve as a \"lifesaver\" for small and medium-sized boiler manufacturers as well as power plants that need to be upgraded. **“The introduction of the \"prioritize large over small\" policy caused the once-prosperous boiler market to cool down gradually, with orders dropping significantly. The successful application of biomass power generation boiler technology has precisely provided the boiler industry with an opportunity to regroup and recover. Furthermore, the successful application of this power generation technology also provides new opportunities for the transformation and development of a large number of small thermal power units in our country that are facing shutdown. 　　According to statistics, China still has small thermal power plants with a total installed capacity of around 100 million kilowatts. Their average coal consumption for power generation is over 400 grams of standard coal, with some even exceeding 500 grams of standard coal – which is more than 30% higher than the coal consumption of large, advanced power generation units. Using agricultural waste to generate electricity undoubtedly opens up a new path for the technical upgrading and reuse of numerous small thermal power units in our country. 　　Ji Guo Group, the leading enterprise in China’s small and medium-sized boiler industry, has set a development strategy aimed at becoming the world’s largest manufacturing base for biomass energy boilers. It has planned to invest over 150 million yuan in technological upgrades for its manufacturing facilities during the 11th Five-Year Plan period, and it has also accelerated the pace and intensity of technological upgrades at its plant in Pinggu, Beijing. Ji Guo Group has also secured all the biomass power plant projects invested in by Guoneng Biomass Power Generation Co., Ltd. through its partnership with Longji Electric Power. In 2005, 7 130-ton water-cooled vibrating grate straw-direct combustion power generation boilers were introduced for production, and to date they have undertaken the boiler manufacturing tasks for over 30 projects in China. 　　 　　“Ji Guo certainly wants to reap greater benefits from the construction of biomass power plants. However, the high operating costs and investment expenses associated with these plants deter investors to some extent, as most of them operate at a loss and investors fail to make any profits. ”After more than a dozen projects were put into operation, Meng Xiangbin, head of the publicity department at Jiguo Group, issued a somewhat pessimistic assessment of the domestic biomass boiler market. 　　According to relevant data, by the end of 2007, China had approved 81 biomass power generation projects, with over 40 projects under construction; 17 of these projects had already been completed and put into operation. “It is the poor investment outcomes of these 17 operational power plants that have held back biomass power generation. ”An industry expert confirmed Meng Xiangbin’s assessment. The data provided by the Energy Research Institute of the National Development and Reform Commission presents in more detail the awkward situation faced by biomass power generation projects: the lack of proper resource assessment during the initial stages of these projects has led to potential supply crises for raw materials in the projects that have been completed ； The strong desire of local areas to attract investment often leads to an overestimation of the available amounts of local agricultural and forestry residues ； The key equipment, boilers, cannot be fully domestically produced, resulting in high project costs ； Factors such as the delayed provision of electricity price subsidies for renewable energy directly result in the \"inherent shortcomings\" of biomass power generation projects. 　　In response to these phenomena, Jiguo Group has also made corresponding adjustments to its development strategy. In response to customer needs, Jiguo Group has developed biomass boilers that can burn multiple types of fuel without restrictions, and these boilers have gained popularity among overseas customers. Ji Guo Group is also making rapid efforts to master the technology of water-cooled vibrating grate straw-direct combustion power generation boilers introduced from the Danish company BWE, and has now achieved full domestic production of such boilers. “Currently, biomass boilers account for 14% of Jiguo’s overall product portfolio, while our target for 2008 is 25%–30%. Ji Guo has established an Asian sales center for biomass boilers in Malaysia. The company is making every effort to obtain a manufacturing license for export to the EU by May this year, in order to gain a larger share of the overseas market. Overall, compared to the less favorable domestic market, we are more optimistic about the rapidly developing overseas markets. ” Meng Xiangbin said.