Zhong Baoshen Interviewed by China Electric Power: Deepening Our Understanding of the Necessity and Value of Clean Energy
Time:2018-11-20 01:49:00
Zhong Baoshen, Board Chairman of LONGi Green Energy Technology Co., Ltd.,  is the President of China New Energy Chamber of Commerce under All-China Federation of Industry and Commerce. He pointed out on the 12th China New Energy International Forum themed “Multi-energy Complementarity”, the power generated by new energy would dominate the future power field, and the multi-energy complementarity could be an important breakthrough point for China to advance the modernization of energy and construction of clean energy, low-carbon, safe and efficient energy system.
▲ Zhong Baoshen spoke on China New Energy International Forum
He emphasized that in the future development, it already became a trend for energy transitions to build the integrated energy system with organic integration and complementarity of multiple energy resources. PV, a primary clean energy industry, could be the important support for accelerating energy transformation and constructing the modern energy system. The rapid development of new energy technologies made it visible to us that we had the basic conditions for change our environment while energy cost kept stable. In other words, we could obtain cheap, sufficient and sustainable clean energy without sacrificing our quality of life.
The following dialogues are excerpted from the interview of Zhong Baoshen by China Electric Power:
1. What should we do to establish a new energy system with organic integration and complementarity of multiple energy sources? How about its development now? For better development in future, which areas of weakness should be overcome?
Zhong Baoshen: The energy structure of China in the past is vividly summarized as rich in coal, lack of oil and shortage of gas. In such case, we take into account the establishment of a huge system of energy development and utilization dominated by fossil fuels. This is the very large fossil energy system that has already been formed and lays the industrial foundation of our country. In the process of new energy transformation, we need to build a new system, but Rome wasn’t built in a day. We can learn from the experience of some countries, especially in Europe, including Germany, Denmark and other countries and regions which are well developed in the field of renewable energy. Earlier, the National Energy Administration of China held the International Forum on Energy Transitions in Suzhou. The government leaders at all levels of this country show high concern for the energy transitions. On the Suzhou Forum, the data shown that, in the past five years, the proportion of coal-fired power generation decreased by 7.5%, which meant that the proportion of renewable energy increased by 7.5%. After development according to local circumstances, the decrease will exceed 7.5% in the next five years. 10 years later, I believe that the renewable energy will dominate the whole energy system. By constant efforts, the renewable energy can reach 100% in the majority of regions. California in the United States of America has set a plan with the goal of 100% renewable energy in 2040. For future energy development, a comprehensive energy system with organic integration and complementarity of multiple energy sources has already become the trend for energy transitions. This system needs to couple, coordinate and control the renewable or clean energy sources such as natural gas, geothermal energy, wind power, solar energy, etc., to adapt to changes on the resource side, grid demand or changes in user load. The biggest advantage of this system is that the multiple energy sources can be integrated and complemented according to their own characteristics, so as to ensure the balance between the power generation side and the user side and overcome the areas of weakness. Although the solar and wind energy are sometimes intermittent, currently their costs have been reduced to a level that can compete with coal and fossil fuels, and even their power generation cost is significantly lower than that of natural gas and oil. If we superimpose energy storage and achieve the complementarity of multiple energy sources, then they can completely meet our need .
2. What will China New Energy Chamber of Commerce focus on in the future?
Zhong Baoshen: The New Energy Chamber of Commerce will first focus on the internal communications of members and the exchanges of industry associations and organizations at home and abroad. Chinese member companies are organized to study in different countries and communicate with renewable energy organizations for facilitating their development. On the other hand, it is one of the most important directions and objectives of the Chamber of Commerce to promote the healthy development of the industry. We also pay attention to regulate the orderly development of this industry, so that some irregular behaviors or events that affect its development can be controlled and constrained to help the industry to develop in an orderly manner. We have a variety of different energy situations. In order to better serve our members, the Chamber of Commerce has established eight special committees, which can provide precise support to the development of our member companies. Moreover, several public think tanks are established, similar to the policy special committee and the financial special committee, for providing member companies with public support services such as policy consulting and financial solutions. Third, we must promote the formation of social consensus in the industry. Because a single company has limited strength, I hope that member companies can make suggestions for the development of the industry, and the Chamber of Commerce encourages them to give more valuable advice. As an industry association, we can offer suggestions to the ministries and governmental bodies by means of CPPCC proposals and through the platform of the Chamber of Commerce. I hope that all of us can push forward our ideas to the public so that they can recognize the social value and benefits of our industry, turn attention to and support new energy and boost the development of this industry. Also, we hope to present more accurate and valuable industry reports that wield influence on the whole society. Thus, the social contribution and development of the industry can be visible to the public and achieve consensus in a broader scope of the society. Fourth, the Chamber of Commerce will guide its member companies to continuously innovate, promote advanced experiences to the whole industry and facilitate the development of member companies. Fifth, an important work of the Chamber of Commerce is that we will summarize some opinions and problems of the industry and submit them to the relevant departments of the government for communication and feedback. In this way, the state and the government will have a deeper understanding of this industry and our needs. I hope that with the support of our member companies and the efforts of the work staff in the Secretariat, the Chamber of Commerce can continuously contribute to the development of new energy.
3. How long will it take to achieve the dominance of clean energy in China?
Zhong Baoshen: China once undertook when signing the Paris Agreement that the use of fossil fuels in our country would rise to a peak in 2030. Considering the achievements of clean energy in recent years, the peak of fossil fuel use in China will arrive in five years and the clean energy is likely to have a dominant role in the energy system of China within 10 years. The speed is beyond our imagination. PV, as a main clean energy industry, provides an important support for accelerating energy transitions and building the modern energy system. In recent years, considering the continuous reduction of costs and the characteristics of convenience and cleanliness, PV power generation is being “distributed everywhere”.
4. LONGi products was price reduction for ten times this year. When can the grid parity be achieved after reduction of wafer price? How long will it take?
Zhong Baoshen: Our new energy companies always has a firm belief that the clean energy can benefit every family and the whole society. The economy of clean energy is the goal pursued by all companies in this field. LONGi establishes the innovation as its goal to continuously drive the technological progress of the industry, reduce the cost of use and finally promote PV as the main energy source of the whole society. Therefore, the price reduction of silicon wafers as you mentioned just now is an inevitable trend in the development of the industry, which is anticipated by our companies. The industry has upstream and downstream and there is also the relationship between supply and demand, so the tempo of price cuts is determined by market changes. It is difficult to measure the grid parity because it may be compared with the benchmark price of coal-fired power using desulphurization, nuclear power or that generated by natural gas. If compared with the nuclear power, whose price is now within the range from RMB0.4 to RMB0.42, the price of PV power is RMB0.31 in the tender of Qinghai, which is much lower than that of nuclear power. Now we temporarily compare the price of PV power with the benchmark price of coal-fired power using desulphurization, which is RMB0.32, and find that in Qinghai the former one is lower than the latter. Therefore, in my opinion, the current PV technology can support the grid parity, but now we still have a lot of non-technology costs, resulting in uncontrolled electricity prices such as power cuts. We believe that these costs can be reduced with the decrease of non-technology costs and the support of the whole society. PV has become the cheapest source of energy in most parts of the world. The PV raw material is sand (silicon), the production process consumes energy, and we need the human labor power. These are only three types of costs for our industry. Sand is inexhaustible and unlimited. And as technology makes progress, the energy consumption of our PV production is constantly decreasing. The labor efficiency of human beings is increasing. In respect of the three factors, the continuous cost reduction of PV products can be anticipated. Therefore, I believe that our society needs consensus and truly recognize the necessity and value of clean energy. A leader in the nuclear power industry ever introduced that after the investment recovery, the nuclear power only had the cost of RMB0.1. I told him that the cost of PV power was only RMB0.02 after the investment recovery, which meant the expenses for cleaning the cells. In fact, the maintenance cost is two cents for one kilowatt-hour of power. The sunlight is entirely clean and has a stable lifecycle. After everyone realizes its value, I believe that with the reduction of non-technology costs, the vast deserts in the western China will also create value. If the directional sunshine is reduced, grasses may grow under the solar cells in the desert. These advantages need to be promoted jointly so that the whole society can recognize its benefits.
5. You mentioned in the morning that the new energy industry encountered some challenges due to the overall economic situation of China, but you also believed that the challenges could usher in new opportunities for development. What are these challenges and opportunities in your opinion?
Zhong Baoshen: The PV policy formulated in the middle of this year has caused the domestic market to shrink sharply, and the price of the PV industry chain falls rapidly. It can be said that the policy greatly affects the industry. The shrinking market size for terminal applications definitely has a direct impact on manufacturing companies in the entire industry chain. The risk of business operation occurs in the second half of the year. In view of the reducing user demand and product price, how can you sell out the products and earn profits after price cuts? When talking about opportunities, LONGi is an innovation enterprise which defines its mission as a technology-oriented solar energy company with the goal of being the most valuable solar energy technology company. In the past few years, in the fields of solar energy, solar power generation and PV power generation, LONGi is basically the key advocate of widely applied technologies. With regard to the crystal material manufacturing, PERC is a mono-crystalline technology named by LONGi, but already widely adopted by the industry. The diamond wire sawing technology can lead to the cost saving of 20 billion to the whole industry every year. Its popularity means that LONGi fostered the domestic industry chain, including manufacturers of equipment and auxiliary materials. Now PERC cells become the industry mainstream. It is the production capacity released by LONGi in large scale in China three years ago, thus triggering the pursuit of efficient products. At the beginning of last year, LONGi began to launch the double-sided power generation module, which is the best seller on the market and the product with the best profitable points. To achieve its goals, LONGi had largely invested in R&D. In 2017, LONGi made the most investment in the solar energy field and exceeded the two companies in the USA. In the first half of this year, LONGi’s R&D investment was 740 million yuan, far more than that of other enterprises in the industry. In difficult times, the industry needs new products that can attract and deeply move customers, so that our company can achieve further development in this difficult process and drive the industry to make progress. LONGi is always steadfast for maintaining substantial investment in R&D, innovation and technology and committed to become the industry leader. The most difficult times of the industry place heavy pressure on cost reduction, but also create opportunities for LONGi. We must accelerate on the road of innovation to allow for quicker launch of highly efficient products of LONGi to the market and meet the customer needs. This may be faster than our launch of products when the industry runs smoothly. For LONGi, both the risks and opportunities are faced in such an environment.
Reproduced from: China Electric Power