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China Electric Power News:equipment localization rate to be improved-interview with General Manager Qiu Gengshen of Dalian Energ

8.3%-10% is the proportion of natural gas in 2020 to primary energy consumption specified in the 13th Five-year Plan for Natural Gas Development. In order to realize this objective of “protect eight for ten”, development for natural-gas-distributed energy is regarded by the industry as the important way to expand natural gas consumption. In this context, reporters exclusively interviewed General Manager Qiu Gengshen of well-known service provider, Dalian Energas New Energy Development Co., Ltd. (hereinafter referred to as “Dalian Energas) in domestic distributed energy field recently, asking him to express his own opinions about focus issues such as opportunity and challenge etc. at present of natural-gas-distributed energy in the development process.

Opportunity: growth of natural gas consumption will drive distributed industry development

China Electric Power News: it is known that distributed energy has characteristics for reasonable energy efficiency utilization, small loss, less pollution and flexible operation etc., and is one kind of new energy supply form. So specific to natural-gas-distributed energy, how is the development of this industry in China?

Qiu Gengshen: it should be said that distributed energy originated from America, developed in Europe, and matured in Japan. Specific to China, the concept of distribution was introduced to China during 2005-2008, but development for natural-gas-distributed energy was not ideal at that time. Therefore, in the next stage of 2008-2013, it was the coolness and learning period of the whole industry, and more and more experts and media started to research and concern distribution at the same time.

As of 2013, policy in our country was gradually loosened, and various ministries including National Development and Reform Commission etc. introduced policies to advocate developing natural-gas-distributed energy. However, when policy tended to be perfect and enterprises confidently started to develop natural-gas-distributed energy, it was started to distinguish stock gas and incremental gas in case of natural gas price, which had hit the whole industry hard relatively. Industry development for natural-gas-distributed energy in China was also met with certain resistance due to this.

As of April 2015, price of stock gas and incremental gas were combined; in November in the same year, price of natural gas was reduced by 0.7 yuan per cubic meter. With the introduction of these two policies, development of natural-gas-distributed energy had ushered in the spring, and many new equipment manufacturers, gas suppliers, and investors started to pay attention to this industry for natural gas distribution. Therefore, 2016 was one ready year for natural-gas -distributed energy system. Everyone saw the spring atmosphere from the cold winter, and started to plan one after another. But I predict that the real flourishing date for natural-gas-distributed market will be around 2020.

China Electric Power News: a few days ago, it was proposed in Instruction on Energy Work In 2017 researched and formulated by National Energy Administration that natural gas utilization should be expanded, and development for natural-gas-distributed energy should be vigorously promoted. So what development opportunities ushered by natural-gas-distributed energy industry in China will be this year and during “the 13th five-year plan”? Do you think how to develop to promote industrial progress in the perspective of enterprise?

Qiu Gengshen: firstly, one important task for natural gas industry during the 13th Five-year plan is to expand consumption proportion of natural gas. But demand growth of natural gas is about to drive development for natural-gas-distributed energy, which means a huge opportunity for the whole industry; secondly, at present, large-scale support for development for natural- gas-distributed energy equipment is started at home. After there are equipment for more self-owned brands in the industry, equipment cost for natural-gas-distributed energy will be greatly lowered. Payback period of investors will be correspondingly shortened, which means a good opportunity for development of natural-gas-distributed energy.

In addition, seen from the perspective of enterprises, enterprises of natural gas can be probably divided into several kinds, including traditional power generation enterprises, gas company, design institute, the general contracting company and equipment manufacturer etc.. At present, what is needed to be recognized is that one main problem faced by natural-gas-distributed energy industry is main equipment totally relying on export on the whole with low localization rate. But market positioning for Dalian Energas is one-stop supplier for natural-gas-distributed service relying on equipment. Therefore, in the perspective of enterprises, making core equipment for the whole industry including extended industrial chain and improving technical level for natural-gas-distributed energy industry are the great contribution made by the enterprises to the whole industry of natural-gas-distributed energy.

Prospect: natural-gas-distributed energy is one vast blue sea

China Electric Power News: so far as you know, what are the problems impeding its development in terms of natural-gas-distributed energy at present? How do enterprises deal with these problems?

Qiu Gengshen: firstly, it is the relatively low localization rate of equipment mentioned above. For most equipment needs to be imported, core technologies are controlled by people, and import equipment makes yield rate of investors lowered greatly. Therefore, enterprises shall increase research and development for core technical equipment, and improve localization rate of key equipment; on the other hand, natural gas price in China is relatively high at present. But the final objective for marketization reform of natural gas in the future is to realize “focus on the middle and let go the two ends”, and it is predicted that natural gas price will be rationalized with the promotion for marketization progress.

China Electric Power News: Dalian Energas has been in the natural-gas-distributed energy industry for many years, what do you think about future development prospect of natural-gas-distributed energy?

Qiu Gengshen: I think that market of natural-gas-distributed energy is one vast blue sea. Because there are many enterprises using natural gas extensively at present. In addition, there are many enterprises realizing supply for cold and thermal energy through electric energy, and these fields can actually develop natural-gas-distributed energy to replace. Moreover, as the recognition degree of energy industry to this field is gradually improved, after several years, customers will firstly consider whether energy supply can be realized through natural-gas-distributed mode when they buy boiler. At that time, development for natural gas distribution will be limitless, but this time is predicted to come around 2020.