Market Analysis丨China's Natural Gas Distributed Energy in 2016

Distributed energy refers to a system in which the energy system is arranged on the user side in a small-scale, small-capacity, modular, and decentralized manner, and can independently transmit cold, heat, and electricity. Distributed energy includes solar energy utilization, wind energy utilization, fuel cells and natural gas cooling, heating and power trigeneration, among which natural gas cooling, heating and power trigeneration has the advantages of efficient use of traditional energy and promoting energy saving and emission reduction. The range has been widely used. The "Natural Gas Era" is promoting the development of some distributed energy technologies. The widespread use of natural gas and the continuous expansion of natural gas network density have created excellent opportunities for natural gas distributed energy systems.

In 2000, global investment in distributed energy installations reached $30 billion, and distributed energy capacity increased at a rate of 47GW per year, accounting for 21% of the global increase in power generation. By 2012, the annual increase in distributed energy power generation capacity had risen to 142GW, accounting for 39% of the global power generation capacity increase; the investment in distributed energy had increased to $150 billion. The strong growth of distributed energy is expected to continue. General Electric predicts that by 2020, the increase in distributed energy generation capacity will increase to 200 GW per year, and investment in distributed energy technology will also reach $205 billion.

Distributed energy technology originated in the United States. In 1978, the United States began to develop small-scale combined heat and power, and gradually moved towards combined cooling, heating and power. As of 2010, there were more than 6,000 distributed energy stations in the United States, with a total installed capacity of 92 million kW, accounting for 14% of the national power generation. The distributed energy projects in the United States are mainly distributed with natural gas. The installed capacity of combined heat and power using natural gas as raw material accounts for 73% of the total installed capacity of combined heat and power. In order to increase the development and utilization of distributed energy stations, the U.S. government has set up supportive policies such as investment tax reductions, simplified approvals, and support for grid connection, and proposed the "Distributed Energy Ideas" and "Distributed Energy 2020 Guidelines" in 1999 ", it is clearly proposed that 50% of new commercial buildings and 15% of existing commercial buildings adopt "distributed combined heat and power" by 2020.

In 2013, Germany's distributed natural gas power generation capacity was close to 80TWh, ranking first among the 27 EU countries. German distributed energy occupies a leading position in Europe, among which small combined heat and power equipment (mCHP) using natural gas as fuel occupies a considerable proportion. Germany's policy support for mCHP is embodied in many aspects: 1) mCHP implements the "priority price method" for selling electricity to the public grid: mCHP will receive a subsidy of 5.11 Euro cents per kilowatt-hour of electricity within 10 years after it is put into operation. In addition, because mCHP saves transmission costs, each kilowatt-hour of electricity is awarded 0.15~0.55 Euro cents; 2) If mCHP's annual energy efficiency exceeds 70%, you can enjoy tax rebates, 0.55 Euro cents per kilowatt-hour; 3) Introduce 50kW to accelerate the market For mCHP equipment, the Ministry of Environment will provide 4 million euros of financial support over a 10-year period, namely, a subsidy of 1550 euros/kW for the initial 4kW power generation, and a subsidy of 50 euros/kW for the range of 25kW~50kW. As of the end of 2012, the capacity of small-scale cogeneration projects in Germany exceeded 2.4 million kilowatts. The government will invest in 30,000 projects by 2020, with a total installed capacity of 2,768MW. The government expects to double the gas-fired distributed power generation capacity by 2020 under the new policy to reach 25% of the country's total power generation capacity.

In 2013, Danish natural gas distributed energy accounted for 51% of the country's total power generation. Since 1990, the capacity of large-scale condensing power plants in Denmark has not increased, and the newly added power mainly relies on distributed energy power stations (thermal power stations) and renewable energy projects. Denmark has adopted a series of clear encouragement policies for distributed energy. It has successively formulated the Heat Supply Law, the Electricity Supply Law, and the National Natural Gas Supply Law, which clearly defined the protection and support positions in the law. The Electricity Supply Law stipulates that power grid companies must give priority to the purchase of electricity generated by combined heat and power, and consumers are obliged to give priority to the use of electricity generated by combined heat and power.

As of the end of 2014, the installed capacity of natural gas distributed energy projects in my country has reached 3.8GW (including 82 completed projects, 22 projects under construction, and 53 projects under construction), which is compared with the total installed capacity of 1360.2GW in China The ratio of only 0.28% is far lower than that of European and American countries, but because of this, the market space is huge. China’s natural gas distributed energy projects are mainly distributed in large and medium-sized cities such as Beijing, Shanghai, and Guangzhou. The typical regional distributed energy system is the Guangzhou University Town project. The building distributed energy system includes Shanghai Pudong International Airport Energy Center and Shanghai Huangpu District. Central hospitals, etc.

According to the national installed capacity plan for 2020, the investment scale of natural gas distributed energy in the next five years is about 225 billion yuan: as of the end of 2014, the total installed capacity of natural gas distributed energy projects in the country is about 3.8 GW, and the government plans to The installed capacity is 50GW, and the gap is about 45GW. The current unit price of natural gas distributed energy projects is about 5 million yuan/MW. Therefore, the total investment scale of natural gas distributed energy projects from 2016 to 2020 will reach 225 billion yuan. The "China Gas Clean Energy Development Report 2015" compiled by the Development Research Center of the State Council's Resource and Environmental Policy Research Institute predicts that China's natural gas consumption will reach 400 billion cubic meters by 2020, accounting for more than 10% of primary energy consumption. Among them, city gas is 104 billion cubic meters (26%), industrial fuel uses 156 billion cubic meters (39%), power generation gas uses 92 billion cubic meters (23%), and chemical gas uses 48 billion cubic meters (20%). Assuming that 60% of the 92 billion cubic meters of gas used for power generation are distributed natural gas projects and the annual gas consumption of natural gas units is 2 million cubic meters/MW, the installed capacity of natural gas distributed energy in 2020 is 27.6GW, and the capacity to be installed in the next 5 years is 23.8GW . Assuming the unit price of natural gas distributed energy project investment is about 5 million yuan/MW, the estimated investment of natural gas distributed energy in 2016-2020 is 119 billion yuan.

At the beginning of the 21st century, my country's economic level has risen rapidly, and the demand for natural gas in the market has continued to increase. Driven by supply and price, the national natural gas consumption increased from 30.2 billion cubic meters in 2002 to 188.4 billion cubic meters in 2013, with an average annual growth rate of 16.10%.

Since 2014, the growth rate of the domestic natural gas market has dropped significantly. It dropped to 9.58% in 2014 and fell further to 4.5% in 2015, which is far from the average annual growth rate of 16% in 2002-13. The slowdown in the growth rate of the natural gas industry development is mainly caused by the slowdown in demand and the deterioration of the price ratio relationship. The specific reasons include: 1) my country's economic growth rate has slowed since 2014, the economic structure is undergoing transformation, and the growth of industrial and power generation gas consumption has decelerated sharply. As a result, the growth of natural gas demand has slowed sharply; 2) As an alternative energy source, the relationship between price ratios is crucial to the development of natural gas. From July 2013 to the end of last year before the price cut, the price of natural gas city gates increased by 36% on average. During the same period, the spot price of Brent crude oil dropped from USD 103/barrel to USD 48/barrel, a decrease of more than 53%; the market price of Qinhuangdao Port thermal coal (Q5500) dropped from RMB 600/ton to RMB 375/ton, a decrease of 37.5% . Due to the drop in the cost of alternative energy, the economic advantage of natural gas has been weakened, leading to a decline in the willingness of enterprises to use gas; 3) Due to the long period of my country’s price adjustment of natural gas, the price of natural gas and alternative energy cannot be linked in time, and it is difficult to truly respond to substitution. The price fluctuation of energy and the market supply and demand of natural gas itself and the ability to balance prices.

my country's energy structure has long been dominated by coal, and the proportion of natural gas consumption is far below the world average. In 2014, the proportion was less than 6.3%, it is expected to reach 10% in 2020, and it is expected to reach 13% in 2030, which is still far from the current global average of 24%. As the world's third largest natural gas consumer, my country's per capita natural gas consumption is only 123 cubic meters per person, which is far below the global average of 452 cubic meters per person, and even less than the 1,265 cubic meters per person in OECD countries. In the next 10 to 20 years, as the most realistic, economical, and large-scale clean energy that can be promoted, the natural gas market has huge room for development.

For a long time, "price, supply and monopoly" have been the three major bottlenecks restricting the development of natural gas in my country. In the future (1) With the advancement of natural gas price reform, natural gas prices enter a downward channel, and the relationship between prices will gradually improve; (2) With the increase of imported gas, the natural gas market will shift from short supply to loose supply and demand, and supply restraint on demand will disappear; (3) ) With the advancement of market-oriented reforms and the opening of the middle and upper reaches of the industry chain to private enterprises, the main body of natural gas market supply will become more diversified, stimulating the development of the industry.

Looking ahead, the International Energy Agency (IEA) is optimistic about the growth of domestic natural gas demand. Although subject to the slowdown in economic growth, the IEA in the "2015 Natural Gas Market Report" believes that the downward adjustment of natural gas prices and stricter environmental protection will still enable China's natural gas demand to maintain a compound annual growth rate of about 10% in the next five years. It is estimated that China's natural gas demand will reach 315 billion cubic meters in 2020.