Strengthening PV businesses in China

Transcription

1 PHOTOVOLTAICS Strengthening PV businesses in China According to Anil Cabraal, the China Renewable Energy Development Project demonstrates that developing countries can not only compete internationally on the basis of quality, but can also usefully contribute to the establishment of global standards and practices for decentralized electrification. Strengthening PV businesses in China A World Bank renewable energy development project The China Renewable Energy Development Project (REDP) aims to build capacity in China s burgeoning PV sector, as well as safeguarding the reputation of PV by ensuring high-quality products and services at low cost. Drawing on lessons learned from implementing the REDP which is operated by the China National Development and Reform Commission (NDRC) and supported by the World Bank and the GEF this article focuses on quality and capacity building for photovoltaic systems or solar home systems (SHS) and offers lessons that may be applicable to other technology options. 1 Generally, SHS are used in World Bank-assisted projects where they are the least-cost rural electrification option or where it would take a long time (normally more than five years) for the grid to reach prospective consumers. Users of SHS are able to avoid or reduce the costs of charging batteries and purchasing candles or kerosene. They also enjoy the convenience and safety of electric lighting, improved access to communications and entertainment, as well as other benefits such as improved indoor air quality. Of wider importance are the global environmental benefits associated with reduced CO 2 emissions. Commercial market-based approaches are used in all projects where private sector enterprises, non-governmental organizations or co-operatives offer products for sale or services for a fee.the government plays a market-enabling role by providing policy guidance, setting and enforcing standards, protecting the consumer and promoting knowledge creation and dissemination. Financing is provided through microfinancing institutions or commercial banks. Grants towards start-up costs and business and market development are often available. RENEWABLE ENERGY IN CHINA Since the 1950s, China has been a major user of renewable energy, beginning with small hydro plants supplying power to rural towns and villages.today, there are more than 23,000 MW of small hydro power plants operating in China. Although originally used to power minigrids, many of these plants are now connected to the provincial network. In addition, China has around 400 MW of wind farms, 470 MW of bagasse cogeneration, and 40 MW of geothermal plants that feed the provincial or regional grids. Decentralized units comprise around 300,000 SHS, 170,000 small wind generators and 150,000 micro hydro units (under 10 kw each), along with 19 MW of PV- and wind-powered minigrids that serve an estimated 800 townships in the north-western provinces. The Government of China is accelerating the development of renewable electricity as part of its 10th Five-Year Plan ( ).This effort is expected to continue into the 11th Five-Year Plan. The programme places major emphasis on the development of mature grid-connected renewable energy technologies, such as wind, small hydro and biomass. It also supports the installation of decentralized systems to supply renewable electricity through minigrids and individual systems to benefit some 20,000 villages and up to 20 million people, who live mainly in the north-western provinces. The World Bank and GEF plan to continue supporting China s development plans under the proposed China Renewable Energy Scale-up Project. 2 THE RENEWABLE ENERGY DEVELOPMENT PROJECT The China REDP is one of the largest renewable energy 126 RENEWABLE ENERGY WORLD May June 2004

2 Instructing new customers on using their PV system projects approved to date by the World Bank, second only to the India Renewable Resources Development Project. Implementation of the REDP began in December 2001 and is due to end in The US$205 million project provides financing for 20 MW of wind farms in Shanghai Province, about 10 MWp of PV systems (approximately 350,000 units) for installation in the north-western provinces,and includes grants for technology improvement, capacity building and project management. The World Bank provides $13 million in loan financing, while the GEF provides $27 million for the duration of the project. 3 The project offers grant assistance to qualified, participating PV companies, to establish businesses to sell highquality PV systems on a commercial basis for rural customers scattered throughout the autonomous regions and provinces of Tibet, Qinghai, Xinjiang, Gansu, Sichuan and Inner Mongolia. The direct grant to support sales is $1.50 per Wp of capacity of the PV system sold.any PV system that meets quality standards and is sold by a qualified, participating company is eligible to receive the grant after sales are confirmed. In addition to providing $15 million in direct grants for PV sales, the REDP provides another $10.5 million in grants for management, capacity building, technology improvement, and piloting financing schemes related to PV. By mid-2003, the number of participating PV companies had grown from 17 to 25. Between December 2001 and November 2003, PV sales eligible to receive GEF grant support numbered about 100,000 PV systems, with aggregate sales of about 2 MWp. Sales are now approximately 6000 units per month, with the majority undertaken by some 13 companies. Average unit size is 24 Wp, although unit sizes may range from 10 Wp to 500 Wp. PV system retail prices range from $6 to $10 per Wp, depending on the type and number of end-use appliances provided. A typical small SHS, retailing for $140 in China, has a 20 Wp PV module that produces enough electricity to operate two lights and a radio for about three hours a day.the companies offer a range of small PV systems including a basic 10 Wp unit powering one to two fluorescent lamps and a radio, a 40 Wp system with two to three lamps, a radio-cassette, video/cd player and/or a television, and a 300 Wp system with a refrigerator plus lamps, radio and TV. Some customers, especially herders in Inner Mongolia, use PV wind hybrids comprising a Wp PV module with a wind generator of about W, that supplies AC power to operate a larger number of appliances.these are popular in Inner Mongolia as this province has good wind speeds in winter when solar radiation levels are low. May June 2004 RENEWABLE ENERGY WORLD 127

3 PHOTOVOLTAICS Strengthening PV businesses in China THE WORLD BANK GROUP SUPPORT FOR DECENTRALIZED, RENEWABLE-BASED ELECTRIFICATION PROJECTS The World Bank Group s experience with supporting decentralized, renewable energy-based electrification began in 1993 with the India Renewable Resources Development Project. Since then, the Group has financed or is preparing more than 30 projects, spread across more than 29 countries, that use solar PV and other decentralized technologies, such as micro hydro or hybrids, to provide rural electricity for lighting, communications, productive uses or other services (see Table A). These projects provide electricity services to an estimated 1.2 million rural households, enterprises and community facilities that lack access to grid electricity. Valued at around US$700 million, the projects benefit from World Bank Group loans and credits and from Global Environment Facility (GEF) grants. In addition to investments, considerable funds are provided for project management, capacity building and other technical assistance. These investments are a portion of the World Bank s sustainable energy portfolio that comprises renewable energy, energy efficiency and district heating. Since 1990, the World Bank Group has approved nearly US$4 billion as loans, credits and equity, along with about $1 billion in grants from the Global Environment Facility for sustainable energy. In addition, the World Bank Group s carbon finance business has about $400 million in funds under management and its affiliate, the Multilateral Investment Guarantee Agency, has issued gross coverage for $600 million in renewable energy investments. Since 1990, sustainable energy commitments comprise about 14% of the cumulative power sector investment commitments compared with 4% in TABLE A. World Bank Group support for decentralized electrification Country No. of consumers/householders to benefit a Argentina 66,000 Bangladesh 65,000 Bolivia 60,000 Burkina Faso 8000 Cambodia 10,000 Cape Verde 4500 China 350,000 Ecuador 2000 Ethiopia 6000 India 45,000 (multiple applications PV lanterns, minigrids, pumping etc.) and support to PV businesses under IFC PV market transformation initiative Indonesia 8000 Kenya Support to PV businesses under IFC PV market transformation initiative Laos 4000 Madagascar 15,000 Mali 10,000 Mexico 1000 (PV pumping for irrigation) Morocco Support to PV businesses under IFC PV market transformation initiative Mozambique 10,000 Nicaragua 6000 Papua New Guinea 2000 Philippines 185,000 Senegal 10,000 Sri Lanka 120,000 Swaziland 2000 Tanzania 140,000 Uganda 90,000 Vietnam 25,000 Zambia 20,000 a Includes projects under preparation or implementation, as well as completed Chinese customers are interested in the services that the PV system offers rather than the characteristics or features of its energy generation system or subsystems. They view PV systems as they would any other consumer product the more plug and play it is, the better. Ruggedness and reliability are important, as is the initial cost, since few rural customers in China have access to financing. Meeting the twin challenges of quality and low cost is a challenge. Chinese customers are interested in the services offered by PV rather than the characteristics of the system A principal goal of the PV market development component of the REDP is to strengthen the capacities of the PV companies to allow them to sell higher-quality products at lower unit costs, while functioning more effectively and efficiently as businesses, and providing their customers with good service. Establishing low-cost yet responsive sales and service operations is particularly difficult because the principal market for PV systems is in the sparsely populated and rugged north-western provinces, where population densities are less than 40 people per square kilometre. Sales are usually made through company-owned sales outlets and independent dealers. By the time the project ends in 2007, the rate of SHS sales must more than double if the target 10 MWp are to be installed.as noted previously ( Made in China see Renewable Energy World Jan Feb 2004), after 23 months of operation, by November 2003, sales of 100,000 units (28% of target) with an aggregate capacity of 2 MWp (20% of target) had been reported by the participating companies. QUALITY IN THE SUPPLY CHAIN There is no single PV systems business model. The approach must fit the country and market context.at the same time, one principle clearly holds true,regardless of the business model.if the operation is to be sustainable, all participants in the supply and service chain must make a profit or see an acceptable level of benefits.the supply and service chain includes component suppliers, system integrators, distributors and dealers, and sales, installation and service organizations, as well as customers. Financing is also a critical part of the system and affects every aspect of the supply chain. Product and service quality are central to the ability of any 128 RENEWABLE ENERGY WORLD May June 2004

4 PHOTOVOLTAICS Strengthening PV businesses in China Testing and certification, capacity strengthening Finance Of course,such problems are by no means unique to China; they are similar to those experienced in other countries.there is growing awareness that, if such problems persist, they could mar PV s reputation and seriously inhibit market growth. Testing and certification Suppliers Technology Improvement Program Integrators Design assistance services Product standards setting Dealers Manufacturing and supply quality training Information dissemination, feedback and surveys/audits Installation, service PV business development services Customers Installation, maintenance and customer service training FIGURE 1. Capacity building support along the supply chain in the China REDP participant along the chain to sustain success. Strengthening the capacities of providers to deliver consistently good-quality products and services is essential to ensuring a sustainable, long-term service to consumers. Quality is paramount in building confidence in PV and accelerating its widespread acceptance and commercial use. Experience in China offers a good example of typical quality problems, and some promising ways of addressing them. Dynamic rural PV system distribution businesses are emerging in China, and sales have expanded quickly. As this scale-up takes place, it is important that these small, usually entrepreneur-driven, often somewhat informal, businesses maintain high-quality systems and components, have a responsive after-sales service and generally become more business-like. Quality is paramount to building confidence in PV and accelerating its widespread use Before the project started, the World Bank Group noted that several quality-related problems occurred with sufficient frequency to cause concern. First, as a way of keeping costs down, many smaller SHS were being sold without controllers. This invariably shortens battery life and can considerably raise the life-cycle cost of the system to the user. Second, because of the lack of after-sales service, when components failed or needed routine replacement, the system was unusable for a long time until new or replacement parts were obtained from a supplier,often a considerable distance away.third,the quality of uncertified PV modules was uncertain, and their power ratings were not always accurate. This was also true of other components. Inaccurate or missing labels compounded the problem. CAPACITY BUILDING AND QUALITY IMPROVEMENT SUPPORT The REDP has focused on five areas of capacity building and quality improvement. First, the project is improving the commercial capability of the participating companies to expand and sustain their PV businesses. Second, the project assists in developing and enforcing standards. Third, it is improving the quality of products and services available to consumers. Fourth, it is enhancing the access of suppliers, dealers, and consumers to information. Fifth, it is improving access to financing. A variety of capacity building, training and technical assistance activities were conducted with the aim of bringing about these improvements, as represented in Figure 1, which shows the elements of the supply chain and the technical assistance and capacity building services that are being provided. Improving the commercial capability of PV enterprises During project preparation, business development assistance took the form of training and tailored assistance with business planning for participating PV companies. It covered planning for business expansion, including financial planning, financial controls, inventory management, extending sales and service networks, developing warranty documents and marketing materials, and setting up procedures for quality assurance.the project also conducted a market survey in four of the north-western provinces to give companies better information about their potential customers; 5 this gathered information about the characteristics of PV purchasers and their preferred payment patterns. The results have helped PV companies design appropriate and effective marketing strategies. During project implementation, a Market Development Support Facility (MDSF) provides matching grant assistance to participating PV companies, to improve their business and market development capabilities. Experience in other countries has shown that business and market development support for companies should be provided not only at start-up, but also during implementation of a project. Such support should be demand-driven. Put differently, it should meet priority needs that the companies have identified and for which they are willing to share fully in the costs. The MDSF offers a 50% cost-shared grant and up to $10,000 per year per company for eligible market development support activities. The eligible services include the following: Market development activities such as market and customer surveys, marketing staff or sales agents training, design and production of promotional materials, marketing and advertising, participation in promotional events. Business improvement activities such as staff training, business plan preparation, financial or other systems development. Product development and production/business 130 RENEWABLE ENERGY WORLD May June 2004

5 PHOTOVOLTAICS Strengthening PV businesses in China Selection of PV-powered products available in north-western China the costs of services of independent consultants or consulting firms, including their travel and travel-related costs and direct expenses in providing services under their terms of reference the costs of services for the design of materials (for example, for training or promotions) and manuals fees for inspections for ISO certification fees and other costs of participating in marketing events costs associated with training activities, as well as customer and market surveys. development process improvement such as inspection and ISO certification. The following are eligible expenditures for the use of grant funds: In order to ensure that grant funds do not substitute for the normal operating expenses of the companies, they cannot be used to pay for the salaries and expenses of staff or long-term consultants of the PV company, including honoraria for attending training courses, exhibitions, and so forth. Also ineligible are the salaries and expenses of government employees, including provincial government officials. The project recognizes that some of the companies may not know how to adequately determine their weaknesses or how to overcome them. For such companies, the Project 132 RENEWABLE ENERGY WORLD May June 2004

6 Strengthening PV businesses in China PHOTOVOLTAICS Management Office (PMO) provides the services of experienced national and international business consultants to advise the companies. This is an important service because many of the smaller and less sophisticated companies often look towards engineering solutions and overlook the main problems that relate to financial and business management. To date, participating companies have received 44 cost-shared grants for business development support, valued at almost $200,000. The activities supported range from ISO 9000:2000 certification to financial control systems, sales and service network strengthening, advertising and promotion, market surveys and training. SETTING AND ENFORCING STANDARDS In order to establish a sustainable market, customers must be satisfied with the product they purchase only then will they recommend it to family and friends. A key factor in ensuring customer satisfaction is the quality of the product.to guarantee To establish a sustainable market, customers must be satisfied with the products quality, the REDP has supported the development of national technical product standards. 6 During project preparation, technical standards and testing procedures for PV components were prepared through a participatory, consensus-building process that involved key Chinese research and testing organizations, along with PV module and balance-of-systems manufacturers, as well as some assistance from international experts. These standards built upon those prepared for other World Bank and GEF-sponsored projects, such as the Indonesia Solar Home Systems and Sri Lanka Energy Services Delivery Projects.The draft specifications underwent review at both the national and international levels. 7 The resulting technical standards were then disseminated to local and international companies about a year before the project became effective. It is noteworthy that two of the technical standards and test procedures for inverters and controllers have since been accepted by the Global Approval Program for Photovoltaics (PV GAP) as recommended specifications for PV. Since PV GAP Transporting PV systems in remote parts of north-western Chinese provinces May June 2004 RENEWABLE ENERGY WORLD 133

7 PHOTOVOLTAICS Strengthening PV businesses in China has liaison status with the International Electrotechnical Commission (IEC), it will submit these recommended specifications to the IEC for consideration as new global standards in April This is an excellent example of how national and international standards for PV can be harmonized. The project standards are now being adopted as Chinese national standards. In addition, reciprocity arrangements are in place in order to minimize the cost and complexity of meeting the quality requirements of the project. Re-testing and certification are not required if products are already certified according to internationally recognized standards or requirements (such as those of IEC and PV GAP), or products have been certified and accepted for use in other World Bank Group-assisted projects (such as those in Sri Lanka, Indonesia and the Philippines) with comparable standards. Similarly, World Bank and GEF-assisted projects in other countries will accept components that meet Chinese standards as long as the standards are comparable.this reciprocity arrangement has helped in making a wider range of cost-competitive and quality-assured products available to projects in a number of countries. The project has drawn attention to the importance of PV product certification in China. Four Chinese testing institutes now provide product testing services to manufacturers, and the REDP has given a grant to the manufacturers covering 50% of the cost of testing, but only for those products that are Using REDP certification as a quality mark successfully qualified (to discourage companies from irresponsibly submitting products for testing). When the REDP began, a number of commercially available products were tested and found to comply with the standards. Presently REDP-compliant products are available from 10 manufacturers of DC fluorescent lights, 20 inverter manufacturers, 22 controller manufacturers and 37 battery manufacturers. Most Chinese PV modules presently comply only with the national standard GB which is not equivalent to IEC However,the REDP is currently helping to upgrade module quality to meet international standards. The quality requirements of the project have been recognized by the industry as a potentially valuable marketing tool, to help consumers distinguish which products are of good quality. Several companies are now advertising their REDP product certification on package labels, as well as in print advertisements. This places an extra burden on the project to ensure that this certification mark is not misused. The PMO is investigating the feasibility of copyrighting an REDP quality mark. As an extension of the above, the project is strengthening the capabilities of Chinese institutions to test and certify PV products.the need for domestic testing facilities is determined on a country-by-country basis. In the case of China, with its 134 RENEWABLE ENERGY WORLD May June 2004

8 Strengthening PV businesses in China PHOTOVOLTAICS strong manufacturing base and large potential domestic and export market for PV components, there is adequate justification for accredited national testing centres. The REDP supports the use of existing test facilities to test PV components rather than the establishment of new centres. In order to maintain product quality, the PMO will conduct random and unannounced quality checks on products certified for use in the project. In addition, it is undertaking a series of comparative tests of key components. Randomly selected DC fluorescent lamps from 12 manufacturers are presently undergoing testing to determine their relative performance against key indicators such as luminous efficacy, switching cycles and tube lifetime.the results so far reveal that a number of DC lights exceed the REDP specifications of switching cycles and lifetime by significant margins. Comparative tests of batteries will begin in mid-2004 to determine what charge discharge cycles they can withstand, and their charge retention performance. The project is also assisting 10 Chinese PV module manufacturers to undergo comparative testing at an internationally recognized module testing centre, to check how well they fare when tested against IEC requirements. The feedback from these tests will give the participating module manufacturers an opportunity to improve their modules, as necessary, prior to submitting them for either international certification, according to IEC requirements, or for certification according to the new Chinese module standard, GB , which is equivalent to IEC Given the extent to which other end-use equipment such as video/cd players, televisions and radios are being integrated into PV systems, the PMO is also considering comparative performance testing of such equipment to provide consumers with information on energy efficiency and other performance features. Improving the quality of products and services Setting and enforcing standards in itself is not enough. Companies are also helped to improve their products and services. The project offers design assistance services, manufacturing and service quality improvement training, plus cost-shared grant assistance for product development. Design assistance services A PV testing and research agency from the Netherlands has trained technicians and experts at the Hefei University of Technology to provide design assistance services to engineers working in Chinese PV manufacturing companies.the aim was to improve PV product quality without increasing the cost to the manufacturer. Indeed, in some cases, manufacturing costs actually decreased. Manufacturing quality Attention has been given to providing training in quality improvement for manufacturing. Two Chinese experts attended a training programme in India supported under another World Bank-assisted project.the training addressed the key elements of quality manufacturing: implementing an ISO 9000 compliant quality management system adhering to appropriate standards May June 2004 RENEWABLE ENERGY WORLD 135

9 Strengthening PV businesses in China PHOTOVOLTAICS submitting products for quality testing and securing recognized certification. This training was part of the World Bank s Quality Program for Photovoltaics, which promotes quality in four areas, so as to build confidence in solar technology.the four areas are quality design, quality manufacturing, quality testing laboratories, and quality installation and maintenance. Under this project, four sets of training manuals and programmes were prepared and field-tested in India. Subsequently, training was delivered in China, the Philippines, South Africa and Sri Lanka. Later, portions of the training manual were upgraded in response to the recently issued ISO 9000:2000 standard. The manuals are available on CD-ROM and on the World Bank s website. 9 The Chinese experts translated the documents into Mandarin, and trained 42 PV companies in establishing ISO 9000-based quality systems in their companies. Installation and service infrastructure quality It is widely known that the life of PV systems can be reduced by years as a result of poor installation and maintenance. In another example of useful cross-fertilization with the Quality Program for Photovoltaics Project, the REDP supported training and accreditation for installation and maintenance service companies. The China National Institute of Standardization and Jike Energy New Technology Development Company carried out a pilot training programme involving over 40 Chinese PV technicians from 32 installation and maintenance companies. This work is now being expanded with support from international and national agencies under the guidance of the NDRC. 10 Accreditation and certification will ensure PV s reputation Under the auspices of the NDRC Song Dian Dao Xiang (township electrification programme [see the article Sending electricity to townships in Renewable Energy World Sept Oct 2003] 10 ), the Jikedian Renewable Energy Development Center and Yunnan Normal University, with support from the US National Renewable Energy Laboratory, are training and accrediting more PV technicians in quality installation and maintenance services. The accreditation and certification infrastructure being established in China will help ensure that PV s reputation is upheld and that users needs and expectations are met. It is expected that approximately 55,000 installation technicians required for the Song Dian Dao Xiang and the Song Dian Dao Cun (village electrification programme) will be accredited over the next few years. Technology Improvement Program The Technology Improvement Program is an important part of the project. It supports cost-shared development of new and improved PV products. The project offers US$3.5 million in cost-shared assistance through three instruments: The Competitive Grant Facility to share up to 50% of the PV on sale in the marketplace cost of improvements. Beneficiaries are selected competitively based on proposals submitted by companies or institutions in response to invitations that are issued annually by the PMO. The Quick Response Facility offers small grants for companies or institutions on a minimum cost-sharing basis of 50% for urgent small projects. The Program Support Facility is available for activities that are not company-specific. The cost-share grant facilities of the Technology Improvement Program support the following: labour and consultancy services for research and development of lower-cost and/or improved quality PV component and systems production and field testing of prototypes testing and certification depreciation (or rental) of equipment used for research and development over the period, to the extent that the equipment is used for technology improvement of PV components or systems training, purchase of software and materials, and travel related to technology improvement of PV components or systems market assessment and other studies for new or improved products identification of potential local and foreign partners for the production of PV components and systems studies for the assessment of the feasibility of co-operation with local or foreign partners (joint ventures). To ensure that bidders gain from international best practice, the PMO uses international experts to advise both them and the companies. In 2003, the project awarded an estimated $620,000 to 45 winning proposals. The 45 projects represent a total investment in technology improvement of $2.7 million. These proposals cover a broad range of development topics ranging from batteries to inverters, hybrids, LED and fluorescent lamps, and controllers. The benefits from the Technology Improvement Program will begin to be felt in 2004 as these innovations enter the marketplace. A third feature of the Technology Improvement Program is May June 2004 RENEWABLE ENERGY WORLD 137

10 Strengthening PV businesses in China PHOTOVOLTAICS the Program Support Facility. This element supports activities for the common good, including comparative tests, specific technology improvement-related studies, workshops, exhibitions and trade fairs. In the comparative tests, the PMO generates reliable information on the relative performance of different PV system components to enable consumers to judge which projects provide best value for money (see the earlier discussion of testing of lights, batteries, and modules). Information dissemination Information sharing between companies and the PMO, communication with the international PV community, training users and feedback from users are critical to the success of the REDP. The project maintains a website to disseminate information internationally, as well as within China, on project requirements, technical standards and test procedures, qualified products and participating dealers. Public outreach through trade fairs, newsletters and meetings are regular events. All products are accompanied by user manuals in the local languages, and the sales agents are also required to instruct their customers in the proper use of the PV system. The PMO conducts sample verification surveys of installations to confirm that product quality is being maintained, consumers are trained, and changes in user lifestyles are monitored to assess the development impacts of using PV systems. Financing Access to financing is particularly difficult both for PV companies and for their customers in China. The smaller private or shareholder companies have little or no access to investment or working capital credit. They depend mainly on equity investments from family and friends, or on retained earnings for much of their capital. Some supplier financing is available. Credit, especially for consumer goods such as PV systems, is effectively non-existent in rural areas of the country. Access to financing is essential for the market to grow and for the sector to become stronger As we have seen, in World Bank projects in Bangladesh, India and Sri Lanka, access to financing is essential for the market to grow and for the sector to become stronger. The REDP has committed $3 million to pilot innovative financing mechanisms, in partnership with local banks, to enhance credit access to companies for both working capital and financing consumer sales. CONCLUSION The REDP has focused on PV business development, as well as on product and service quality. It offers a unique opportunity for the World Bank, and for those interested in removing barriers to the widespread and accelerated dissemination of decentralized energy systems, to observe the effects of such an approach on customer satisfaction, supplier profitability, and market and business development. Judging by the results to date, and feedback from participating companies and customers, ensuring high-quality products and services all along the supply and service chain seems to be effective.the project demonstrates how an investment in capacity building of less than 15% of total project costs can have a far-reaching positive impact on PV market development that extends beyond the immediate project. The World Bank, along with the NDRC, hopes and expects that China s experience will demonstrate that developing countries can not only compete internationally on the basis of quality, but can also be active contributors to ever-evolving global standards and practices for decentralized electrification as electricity services extend to remote communities. Dr Anil Cabraal is a Senior Energy Specialist in the Energy and Water Department of the World Bank in Washington, DC. acabraal@worldbank.org web: DISCLAIMER The findings, interpretations and conclusions expressed in this article are entirely those of the author and should not be attributed in any manner to the World Bank, to its affiliated organizations, or to members of its Board of Executive Directors or the countries they represent. The World Bank does not guarantee the accuracy of the data included in this article and accepts no responsibility whatsoever for any consequences of their use. REFERENCES 1. Cabraal, A. Decentralized electrification, experiences and lessons learned. Presentation at Future of Environmentally Responsible Energy Systems in the Developing Nations. Pocantico, New York, US. October ( 2. World Bank. China Renewable Energy Scale-up Program. Public Information Document, Report No. PID9463. August World Bank. China Renewable Energy Development Project. Project Appraisal Report, No CHA. May World Bank Energy and Water Department. Renewable energy and energy efficiency: World Bank Group support. Draft Paper. Washington DC, USA. March Voravate, T., Barnes, D. F. and Bogach, V. S. Assessing Markets for Renewable Energy in Rural Areas of Northwestern China. World Bank Technical Paper No ( 6. Project Management Office. China Renewable Energy Development Project, Solar Photovoltaic Systems and Photovoltaic/Wind Hybrid Systems Specifications and Qualifying Requirements. State Economic and Trade Commission. Beijing, China. December Powermark Corporation. Chinese Photovoltaic Technical Documents and Standards Review. Prepared for the World Bank. Washington, DC, US. February Varadi, P. and Bergmann, A. Establishing PV quality systems. In Renewable Energy World, September October (See also and 9. World Bank. Quality Program for Photovoltaics. Prepared in collaboration with PV GAP and the Institute for Sustainable Power ( 2nd edition Available at and CD-ROMs may be obtained at no cost by sending an request to Ms Teri Velilla, tvelilla@worldbank.org 10. Ku, J., Lew, D. and Shenghong, M. Sending electricity to townships China s large-scale renewables programme brings power to a million people.in Renewable Energy World, September October May June 2004 RENEWABLE ENERGY WORLD 139