China Energy Administration to fast track geothermal development
Operation Center for Sinopec Green Energy Geothermal Co, China (source: Orka Energy)
Alexander Richter
10 Mar 2014
China's National Energy Administration plans a new policy package and will seek financial support fo facilitate geothermal exploration and utilization in China to fast track development mostly for geothermal district heating.
Reported this morning from Beijing, the Head of the National Energy Administration (NEA) Wu Xinxiong said at a recent meeting in Hebei’s Xiong County, “that the administration will issue a policy package and seek support from fiscal and financial departments to facilitate geothermal energy exploration and utilization. There is strong trust that the geothermal energy sector will grow faster after subsidy details have been settled.
China is rich in geothermal energy resources; the east-central sedimentary basin alone is found to have 49.17 billion cubic meters of underground hot water, which contains energy reaching 1.854 billion tons of coal equivalent (TCE). It also provides an energy option independent of weather and seasons, which effects output from wind and solar projects.
Geothermal energy is mainly used for heat supply and power generation. The goals set by NEA are to reach 500 million square meters of heat supply, 100,000 kW of installed capacity, and 20 million TCE of geothermal usage per year by 2015.
One of the handful of completed projects, the thermal power station in Tibet’s Yangbajain, has an installed capacity of 25,000 kW and is capable of generate 7 million to 8 million kWh of electricity annually.
According to an informed source from the station, if drilling expenses are excluded, it cost about 0.7 yuan to generate a kWh of electricity, while the installation cost was about 12,000 yuan per kW. The station charges an on-grid price of 0.9 yuan per kWh, higher than the 0.5 yuan per kWh for wind power while lower than the 1 yuan per kWh for PV power.
A securities analyst said geothermal energy has proven to be more economical than wind and solar energy and attracted much interest in recent years. The current tactic is to develop shallow geothermal resources first, which promises exciting prospects for geothermal heat pump producers.
China now has over 140 million square meters of buildings in which geothermal heat pumps are installed. To reach 500 million square meters in 2015, the investment in this area would be 70 billion to 105 billion yuan, supposing the cost is 200 to 300 yuan per square meter.”
Sources: China Securities Journal
