Author: Wang Tao Source: Pure Science (ID: chunkexue)
This article discusses another crucial aspect of China’s future economic development – new energy power generation, especially photovoltaic.
1? Photovoltaic milestone breakthrough
Recently, when attending the 2022 shareholders’ meeting of Yunnan Aluminum Corporation, there was a very surprising discovery: solar energy has been used in large-scale electrolytic aluminum production. As far as I know, this is not only the first time in the industry, but also the first application of its DC technology solution in the industry. This solution directly uses direct solar energy through simple voltage transformation, eliminating the process of converting direct solar energy into standard 220V AC through an inverter and then into direct current during use. Because the output voltage of solar cell modules is generally between 18 volts and 48 volts, while the voltage demand of electrolytic cells for producing electrolytic aluminum is between 3.6 and 4.2 volts. This direct matching is not only easier to implement, but also has lower cost, smaller volume, and lower losses in intermediate matching conversion compared to the current scheme of converting DC into 220V AC and then rectifying it into DC.
From the information provided on the on-site project introduction board, it can be seen that until the second phase of the demonstration project, ordinary AC connected distributed photovoltaic power generation product technology was still used. But later on, they switched to direct access technology. This technology was formed during the development of Yunnan Aluminum Photovoltaics.
The construction site of the Yunnan Aluminum Yangzonghai Photovoltaic Project is still underway
Photovoltaic devices installed in the open space of Yunnan Aluminum Plant, which are still under construction on site
Roof photovoltaic panels in the factory area
The project was designed by the National Nuclear Power Planning and Design Institute
The entire photovoltaic project was launched in 2021. The DC access scheme was successfully tested in October 2022.
Refer to: “The first domestic distributed photovoltaic integration into the electrolytic aluminum DC system test demonstration project has been successfully put into operation” 2022-10-08 08:28 Sunlight Craftsman Photovoltaic Network. The core technology of the project is jointly developed and implemented by Academia Sinica of State Power Investment Group, Yunnan International and Yunnan Aluminium Corporation. After six months of operation, this technology has become very mature and is currently being promoted to all factories of Yunnan Aluminum Corporation.
Chairman Zhang Zhengji of Yunnan Aluminum Corporation told me that when the initial communication scheme was adopted for construction, there was a huge amount of photovoltaic construction in China, and the waiting time for inverters was very slow. He told the relevant personnel that electrolytic aluminum is originally a DC application, why do we need to use inverters to directly use the DC of photovoltaic power for electrolytic aluminum? This idea has also existed in the industry in the past, but it needs to be specifically proposed by the actual demand side in order to develop. The breakthrough in this technology achieved by Yunaluminum is indeed supported by various favorable conditions.
Yunnan Aluminum has a huge demand for electricity every year, mainly for DC applications, with strong traction in demand. What is the specific electricity consumption? According to Yunnan Aluminum’s public annual report for 2022, the electrolytic aluminum production of Yunnan Aluminum in 2022 was 2.5967 million tons. The power consumption of electrolytic aluminum is generally between 13000 to 14000 kilowatt hours per ton, according to publicly available information on the internet. Because Yunnan Aluminum not only produces electrolytic aluminum, but also consumes electricity for many other products, it is reasonable to use 14000 kWh/ton as a reference for estimation. Based on this calculation, the annual electricity consumption is 36.4 billion kilowatt hours (special reminder, this is a conservative estimate based on completely public information, not an actual number, for reference only. The actual number belongs to the company’s trade secret information). In 2022, the total power generation in Yunnan Province was 374.794 billion kilowatts, an increase of 9.13% year-on-year; Among them, hydroelectric power generation reached 303.882 billion kilowatts, a year-on-year increase of 11.87%, accounting for 81.08%; The thermal power generation reached 45.914 billion kilowatts, a year-on-year increase of 1.54%, which is basically the same as the 45.217 billion kilowatts in 2021, accounting for 12.25%. The electricity consumption of a company in Yunnan Aluminum Corporation actually accounts for about 10% of the entire power generation in Yunnan Province, which really scared me. Because Yunnan has a large amount of hydroelectric power generation, the proportion of Yunnan Aluminum’s use of hydropower is highly correlated with the proportion of hydropower in the province, and even a higher proportion. Therefore, Yunnan Aluminum is known as the benchmark of the green aluminum industry in the industry.
However, due to climate reasons, Yunnan has had more dry weather in recent years, resulting in less water inflow from reservoirs and insufficient power generation. In addition, due to the sufficient development of hydropower in Yunnan, the potential for increasing hydropower in the future is also limited. Therefore, the vigorous development of new green energy sources such as solar energy by Yunnan Aluminum is a natural internal driving demand. Of course, the current construction plan is to be carried out on the respective sites of each factory area of Yunnan Aluminum. After all construction is completed, the annual photovoltaic power generation will be around 300 million kilowatt hours. This quantity is quite large for general community life applications, but for Yunaluminum, the proportion may be less than 1%. There is too much room for future development. I asked Chairman Zhang what the business model he adopted, and he said it was a third-party investment, with Yunnan Aluminum buying electricity from the operating party. Since 2020, the cost of photovoltaic power generation has been lower than that of thermal power. Distributed photovoltaic local consumption is the lowest cost in photovoltaic operation. Generally speaking, the power grid has a tolerance of over 10% for energy sources with significant fluctuations such as photovoltaics. Currently, the proportion of photovoltaic power generation in Yunaluminum is very small. Therefore, even if Yunaluminum’s distributed photovoltaic capacity is increased by an order of magnitude on the basis of the current plan to be fully completed, reaching an annual power generation level of over 3 billion kilowatt hours, there is no need to build energy storage devices. This is the lowest cost model for photovoltaic applications.
2? The significant strategic significance of photovoltaic DC industrial applications
Many years ago, there was news that Buffett was cautious about technologies such as solar energy, as it had not yet been shown that such new energy could be used for industrial applications such as steelmaking. There are also many online analyses on why Buffett did not have a heavy stake in photovoltaic energy. To be precise, Buffett’s Berkshire company has long been focused on and invested in new energy, and has invested in multiple photovoltaic power generation projects. For example, in 2019, more than $1 billion was invested in the construction of a 579 megawatt photovoltaic power plant in Nevada. In January 2022, Berkshire’s Sino American Energy Company announced an investment of $3.9 billion to build a 2042 megawatt wind and 50 megawatt solar power project, Wind Prime, in Iowa, which may become one of the largest projects in the US renewable energy industry.
In the past, photovoltaic technology was mainly used in non industrial applications such as street lamps, household lighting, and household appliances. But the biggest drivers of energy consumption and carbon emissions are industrial applications, especially in the metallurgical industry. Obviously, from low to medium energy consumption in daily life to large-scale energy consumption in the metallurgical industry, new energy sources such as photovoltaics will enter a new level. There have been discussions and studies on this application prospect for a long time. For example, as early as 2010, it was reported that Li Shiqi, Song Jianxin, and others from Beijing University of Science and Technology conducted solar photovoltaic steelmaking experiments. The principle is also very simple, which is to use a battery to simulate solar energy and use it as a power source for electric arc furnace steelmaking.
There are many large-scale energy applications for electricity in the metallurgical industry. In addition to electrolytic aluminum, the production of monocrystalline silicon and polycrystalline silicon, the raw materials of photovoltaic itself, is also a major power consumer and its main cost. In addition, copper production also uses electricity. At present, in the steelmaking industry, the main method of smelting scrap steel is to use electric arc furnace steelmaking technology. In 2022, China’s electric arc furnace steelmaking accounted for 9.7% of the total crude steel production, far below the world average of 30%. China plans to increase the proportion of electric arc furnace steelmaking to 30% of the world average by 2035. Even if the current proportion is 9.7%, it is still hundreds of millions of tons per year. All of these electrical energy applications in the metallurgical industry are mostly direct current. Therefore, the successful application of Yunnan Aluminum’s DC connection to electrolytic aluminum is of great significance. The following table summarizes the potential applications of direct access to photovoltaics in relevant industries.
industry
Production in 2022 (10000 tons)
Electricity consumption per ton (kWh)
Total power consumption (100 million kWh)
Crystalline silicon
eighty-one point one
fifty-four thousand
four hundred and thirty-seven point nine four
Electrolytic aluminum
four thousand and twenty-one point four
fourteen thousand
five thousand six hundred and twenty-nine point nine six
Electrolytic copper
one thousand and twenty-eight
four hundred
forty-one point one two
Electric arc furnace steelmaking
nine thousand eight hundred and seventy-four
four hundred
three hundred and ninety-four point nine six
Total of the above
_
_
six thousand five hundred and three point nine eight
Throughout 2022, the total photovoltaic power generation in China was 427.27 billion kilowatt hours, and even if all of it was used in the above-mentioned metallurgical industry, there was still a significant gap. In the eastern region, due to the constraints of arable land and other construction land, the space for large-scale development of solar energy is limited. But in the northwest region, this constraint basically does not exist. How can China lead the world? (1) – Western Development with Solar Energy as the Trigger Point“
In articles such as “Supplement to the Great Strategy of Rebuilding a China with Solar Energy”, it is systematically proposed to use solar energy as a breakthrough point, comprehensively develop the northwest, and rebuild a China’s great strategy. The breakthrough of Yunnan Aluminum Photovoltaic Project can be said to showcase good prospects in technology and application for this strategy.
This type of high power consuming enterprise is extremely sensitive to the price of electricity bills. Taking Yunnan Aluminum as an example, due to the annual electricity consumption of 30 to 40 billion kilowatt hours, a decrease of only 1 cent in electricity price per kilowatt hour will bring a net profit of 300 to 400 billion yuan, which is very considerable. For the entire electrolytic aluminum industry, if the electricity price can be reduced by one point, it can increase the net profit by 5.6 billion yuan. Therefore, it can be foreseen that various high power consuming enterprises will have an increasing enthusiasm for adopting this DC method of photovoltaic technology in the future. And the enthusiasm for transferring high energy consuming industries to the northwest region will also increase. The grand strategy of using solar energy as a breakthrough to create a new China in the northwest is now within reach.
3? Macro Development of Photovoltaics
For macro data on photovoltaic development, people can obtain it from authoritative websites such as the National Energy Administration.
However, as an attitude towards scientific research, it is important to understand the source of data when looking at it. At present, not only online, but also when some experts speak up, they simply say how much installed capacity China currently has in photovoltaic, thermal power, wind power, hydropower, and other fields. At first glance, the surface data shows that in 2022, China’s new installed capacity of wind and solar power exceeded 120 million kilowatts. But you should know that what really matters is the amount of electricity generated in the end, not the surface installed capacity. We analyzed and calculated the data of different installed power generation and actual power generation in 2022, indicating that the proportion of installed power generation and actual power generation varies greatly among different power generation technologies, and cannot be simply compared. The last column of the table below compares different power generation technologies using thermal power as the normalized equivalent base.
_
Power generation (100 million kWh)
Installed capacity (100 million kilowatts)
Power generation/installed capacity
Equivalent coefficient
Thermal power
fifty-eight thousand eight hundred and eighty-seven point nine
thirteen point three two
four thousand four hundred and twenty-one point zero one
one
hydropower
thirteen thousand five hundred and twenty-two
four point one three five
three thousand two hundred and seventy point one three
one point three five
Wind power
seven thousand six hundred and twenty-six point seven
three point six five four
two thousand and eighty-seven point two two
two point one two
photovoltaic
four thousand two hundred and seventy-two point seven
three point nine two six
one thousand and eighty-eight point three one
four point zero six
nuclear power
four thousand one hundred and seventy-seven point eight
zero point five five five three
seven thousand five hundred and twenty-three point five zero
zero point five nine
From the table, it can be seen that the equivalent coefficient of hydropower is 1.35, which means the installed capacity of 1.35 kilowatts of hydropower. The actual power generation is the same as the installed capacity of 1 kilowatt of thermal power. The photovoltaic capacity is 4.06, indicating that approximately 4 kW of photovoltaic installed capacity actually generates electricity, which is the same as the electricity generated by 1 kW of thermal power installed capacity. This means that in order to replace the installed capacity of 100 million kilowatts of thermal power, an additional photovoltaic installed capacity of approximately 400 million kilowatts is needed.
_
Power generation (100 million kWh)
Installed capacity (100 million kilowatts)
Equivalent installed capacity (100 million kilowatts)
Equivalent proportion (%)
Published percentage (%)
Thermal power
fifty-eight thousand eight hundred and eighty-seven point nine
thirteen point three two
thirteen point three two
66.55%
fifty-two
hydropower
thirteen thousand five hundred and twenty-two
four point one three five
three point zero six
15.28%
sixteen point one
Wind power
seven thousand six hundred and twenty-six point seven
three point six five four
one point seven three
8.62%
fourteen point three
photovoltaic
four thousand two hundred and seventy-two point seven
three point nine two six
zero point nine seven
4.83%
fifteen point three
nuclear power
four thousand one hundred and seventy-seven point eight
zero point five five five three
zero point nine four
4.72%
two point two
After adjusting for the above equivalent coefficients, the announced installed capacity of photovoltaics at the end of 2022 is 392.6 million kilowatts, but the equivalent installed capacity should be 97 million kilowatts. The announced installed capacity accounts for 15.3%, but the equivalent installed capacity should account for 4.83%. The proportion of equivalent installed capacity is the same as the proportion of actual power generation.
The above equivalent coefficients are not absolute and are related to many factors. However, thermal power, nuclear power, and others can continuously and stably generate electricity, while photovoltaic is destined to be essentially limited by solar radiation. From the table above, it can be seen that the 1.3 billion kilowatts installed capacity of thermal power is assumed to be completely replaced by photovoltaic power, which roughly requires an increase of 5.2 billion kilowatts of photovoltaic installed capacity.
From January to April 2023, China’s thermal power installed capacity increased by 12.66 million kilowatts, while the photovoltaic installed capacity increased by 48.31 million kilowatts, equivalent to 11.9 million kilowatts, which is not as large as the thermal power installed capacity. Of course, the growth rate of photovoltaic installation is extremely high, with a year-on-year increase of 186.21%. The estimated annual output is 100 million kilowatts, with an equivalent installed capacity of around 25 million kilowatts. The global photovoltaic installed capacity is expected to be 350 million kilowatts. By 2024, China’s thermal power is expected to enter a stable decline channel. Of course, the investment in thermal power is not always traditional coal-fired power, but more new is natural gas power generation. Cao Renxian, Chairman of the China Photovoltaic Industry Association and Chairman of Sunshine Power, stated at the 16th (2023) International Solar Photovoltaics and Smart Energy (Shanghai) Conference of SNEC on May 23 that it is expected that in 2023, China’s cumulative installed capacity of photovoltaics will surpass that of hydropower for the first time, becoming the first non fossil energy source of power generation. Of course, this excess is only a superficial number of installed capacity, and the equivalent installed capacity, which means that the actual power generation exceeds that of hydropower, requires an increase of at least four times the photovoltaic installed capacity. This may seem like a big deal, but with the current triple digit growth momentum of photovoltaic technology, it will only take two to three years to achieve.
In 2022, China’s polysilicon production reached 811000 tons, a year-on-year increase of 60%.
China’s polysilicon production capacity accounts for over 80% of the global production capacity, and the actual production proportion is also around this proportion. Possessing an absolute monopoly position globally.
Because photovoltaic power generation is subject to sunlight, energy storage has a great impact. The traditional energy storage mainly focuses on pumped storage. But this technology is deeply constrained by geographical conditions. As photovoltaic is a highly flexible and decentralized energy form, the most suitable matching energy storage is chemical energy storage. As of the end of 2022, the total installed capacity of energy storage in China reached 59.4 million kilowatts, a year-on-year increase of 37.2%, and a new increase of 16.1 million kilowatts, a year-on-year increase of 109.1%, with a growth rate significantly ahead of the global average. The installed capacity of new energy storage has exploded, exceeding the total of the previous decade, and the proportion of traditional pumped storage installed capacity is already below 80%. Among the new energy storage, lithium-ion battery energy storage accounts for 94.2%, which is absolutely dominant. The newly added compressed air energy storage technology and liquid flow battery energy storage account for 3.4% and 2.3% respectively. In addition, flywheel, gravity, sodium ion and other energy storage have also entered the engineering demonstration stage. In addition, on March 20th of this year, the National Energy Administration issued a notice on matters related to promoting the large-scale development of solar thermal power generation, proposing to implement a batch of solar thermal power generation projects as soon as possible in conjunction with the construction of new energy bases in desert, Gobi, and desert areas. Strive to increase the annual construction scale of solar thermal power generation nationwide to around 3 million kilowatts during the 14th Five Year Plan period. Photothermal power generation has dual functions of peak shaving power supply and energy storage. Now various photovoltaic technologies and supporting energy storage have entered the stage of large-scale development. This once again demonstrates the power of the Chinese style “exhaustive innovation” model: the biggest challenge of innovation was originally to judge the direction of technology, but China is “quite clumsy” and unable to make such judgments, so it simply does not make such judgments. Based on its massive market size, it exhausts all possible technological directions and allows the final results of actual market operation to speak. All of these technologies will be tried and not every one will be successfully applied on a large scale. But what does that matter? As long as one or two practical technologies can be successfully commercialized on a large scale, it is enough.
Proportion change of various energy storage
New energy storage development
In actual operation, some fire accidents occurred in lithium-ion energy storage batteries. From 2011 to 2022, there were a total of 36 electrochemical energy storage accidents worldwide, including 26 from ternary lithium batteries and 6 from lithium batteries. Therefore, the industry tends to gradually stop using lithium-ion batteries as energy storage. A large number of product technologies that replace lithium-ion batteries have also rapidly entered the stage of large-scale commercialization. Such as all vanadium liquid flow, iron chromium liquid flow, sodium ion batteries, etc., have all entered the market in the past two years and have shown a trend of explosive growth. Among the new energy storage other than lithium ion batteries, one or a few mainstream technologies will soon emerge. From the perspective of any industrial development, it takes some time to form a scale, and 3 to 5 years is normal. I personally believe that liquid flow and sodium ions have more development prospects. Because their compatibility with photovoltaics is the best.
The price of polycrystalline silicon, the raw material for photovoltaic, has experienced a significant fluctuation in the past two years. At the end of 2019, the lowest price reached around $5 per kilogram. Because the cost of kilowatt hours of photovoltaic power generation in 2020 was already lower than that of coal-fired power, photovoltaic installation began to explode, stimulating a sharp rebound in polycrystalline silicon prices, reaching a maximum of $40 per kilogram by the end of 2022. However, during this process, the price of silicon wafers has risen minimally. This indicates the increasing ability of photovoltaics to absorb raw material costs due to technological advancements and other factors.
In 2023, due to the increase and release of polycrystalline silicon production capacity stimulated by high prices and the photovoltaic explosion, the price has dropped by half from a high of $40 per kilogram to around $20. This is still achieved on the premise of the doubling of photovoltaic installed capacity in 2023.
4? Suggestions
Although the government and industry often talk about dual carbon, I have always reminded Chinese people on various occasions to pay special attention to one thing: for China, dual carbon is purely an international political slogan, and we must not take it too seriously. There are two reasons for this. One is that the real fatal impact of global temperature rise is mainly in Europe, which I have discussed on many occasions and in articles, and I will not delve into further details here. More importantly, the second reason is that no matter how to understand the dual carbon itself, because of the rapid development of China’s new energy industry, it does not need to be considered to solve the problem. The dual carbon goals that China wants to achieve – carbon peak in 2030, carbon neutrality in 2060, in fact, carbon neutrality will be achieved before 2040. And it is possible that by this time point, the world could be carbon neutrality. Due to the sharp decrease in the cost of photovoltaic technology in the future, the installed capacity of thermal power generation will begin to significantly decrease in 2024. Within a maximum of 10 years from now (2033), China’s coal-fired power generation will basically be completely phased out. By 2035, fuel powered vehicles will also basically return to zero. More than 30% of the steel making industry that consumes a large amount of coal will be converted to electric arc furnace steelmaking. These will greatly advance the achievement of China’s dual carbon goals at a very fast pace.
In order to accelerate the growth of new energy sources such as photovoltaics in China, efforts should be made to build a new energy base and a new energy special zone in the northwest. From the current technological situation of the entire industry chain, starting with the complementary efforts of photovoltaic, wind power, and natural gas, the northwest region is already a concentrated coal producing area with a large number of pithead power plants. Therefore, we should vigorously develop photovoltaic industry through the existing foundation, and first concentrate the photovoltaic related industry chain such as crystalline silicon to the northwest energy production area, and then transfer the industries such as electric arc furnace steelmaking, electrolytic aluminum, electrolytic refining copper to the northwest, so as to consume massive new energy such as scenery. After the high energy consuming industries in the central and eastern regions move westward, the demand for power generation will decrease, and old thermal power plants can be shut down in sequence. This process also takes 3-5 years. During this process, electrochemical energy storage can develop rapidly, and when it matures, it can enable the northwest region to obtain a massive amount of stable wind and solar power supply. Considering the large-scale construction of ultra-high voltage power transmission and transformation, further increasing the amount of scenery in the northwest region will be sent to the central and eastern regions. Within a maximum of five years, China will add over 400 million kilowatts of photovoltaic installed capacity each year, with an equivalent installed capacity of 100 million kilowatts. Thereafter, there will be a significant increase, with more and more coal power generation being replaced each year. Thus, the dual carbon target can be greatly achieved in advance.
We cannot rely solely on abstract suggestions from pure economists as development policies. For example, double loop, what is the specific double loop method? There must be practical and concrete measures, otherwise this policy is just an empty imagination. In fact, pure electric vehicles and new energy represented by photovoltaic are the best dual cycle grippers. At the same time, fuel powered vehicles and coal-fired power generation need to enter a dead cycle and exit the market as soon as possible. By developing solar energy to create a new China in the northwest, an extremely large increase in internal circulation can be formed. At the same time, the entire new energy industry has strong competitiveness globally, and no one can resist the external circulation of ultra-high growth outward. The successful development of the Greater Northwest can further reduce the overall cost of China’s metallurgical industry by a huge step, fundamentally enhancing the global competitiveness of the entire metallurgical industry. This is the clear and clear grand strategy for China to overcome its current difficulties.