With strong focus on solar and wind, China (excluding Hong Kong, Macao and Taiwan) continues its leadership in renewable energy adoption. After achieving a cumulative installed capacity at 91.4 GW, China also maintains its world leadership in terms of installed wind power capacity.
The National Development and Reform Commission (NDRC) has set a target for renewable energy sources to account for 30 percent of China’s electricity generation by 2020, with wind contributing 200 GW of energy by 2020.
In 2013 alone, China added 16.1 GW. Continuing this momentum, by the end of 2014, total installed wind capacity in China is likely to reach 100 GW, which is a record figure as no single market would have achieved wind power installations of that scale by then, says Global Wind Energy Council (GWEC).
According to GWEC’s updated wind energy scenario in China, annual wind installations are likely to increase from last year’s 16 GW to 19 GW by 2020. By 2016, total installed capacity would rise to 143 GW and this would grow to 217 GW by 2020 and 414 GW by 2030.
However, the IEA’s New Policy predicts rather a pessimistic scenario, which states the annual installation rate will rise from almost 92 GW of new capacity added by 2013 to a total installed capacity of 208 GW by 2020.
Majority of China’s wind energy comes from large Wind Base programs. The 12th Five- Year plan for renewable energy target of 100 GW of wind by 2015 includes 70 GW from the large Wind Base program, 30 GW from smaller projects, and an additional 5 GW from offshore wind.
Encouraged by the success of its offshore projects, China has also set offshore target of 30 GW by 2030. By 2013, the cumulative offshore installed capacity in China was 428.6 MW, which placed it in the fifth spot behind the U.K., Denmark, Belgium and Germany, says GWEC report.
Currently China has seven offshore projects under construction totalling 1,566 MW and another 3.5 GW that will start construction in 2015.
Wind Power Tariff Controversy in China
China has four different tariffs for regions with different wind resources. They range from CNY 0.51/kWh to CNY 0.61/kWh as per the latest data from GWEC.
NDRC is now planning to lower China’s feed-in-tariff for wind power. The decision is driven by lower equipment costs, lower overall wind system costs and perhaps most importantly, a reduction in the price of coal- fired electricity, which will reduce the amount of money available for the Renewable Energy Fund which finances the premium.
The latest draft now in consultation with stakeholders proposes reducing the existing tariffs by CNY 0.04 for the three lower tariffs and CNY 0.02 for the highest. This amounts to a 7-8 percent reduction for the windier sites, and a 3% reduction in the lowest wind zone. However, this move is faced with strong opposition from wind energy developers.
GWEC assumes that the controversy over the price will force the government to postpone the decision until it announces the 13th five year plans which has large plans for wind power and a goal for 200 GW by 2020. The proposed new tariffs may otherwise put those targets in jeopardy, warns GWEC.
Meanwhile, NEA and NDRC have finalized the FIT for offshore wind. As per the new tariff policy, the inter-tidal projects will receive a tariff of CNY 0.75 per kWh while the near- shore tariff was set at CNY 0.85 per kWh.
In the beginning of May 2014, the Shanghai Municipal Government announced additional RE subsidies on top of the FIT given by the central government: onshore wind is given an additional subsidy of CNY 0.1/kWh, while offshore wind a boost of CNY 0.2/kWh.
These measures are likely to boost the offshore projects in China.
Impact of Wind Energy in Chinese Economy
China, which is ranked no. 2 in carbon emission, would gain significantly from renewable energy investments. By generating 357 TWh of clean electricity in 2016, wind power would start to make up a significant share of China’s overall power demand, and this would grow to 564 TWh by 2020 and as much as 1,307 TWh by 2030, GWEC report says.
If the current momentum continues, China wind sector is likely to attract close to €37 billion of investment every year by 2030. The wind sector will also provide more employment opportunities: from the current estimates of 256,000 to more than double the jobs at 548,000 by 2030.
The growing wind energy sector will help China raise its carbon emission standard to a new level. By 2015, wind power would help save 173 million tons of CO2 every year, and this figure would grow to 784 million tons by 2030.
To realize the benefits of wind energy investments, China has to focus largely on the infrastructure, says GWEC. Some of the immediate goals to be achieved include building up of grid infrastructure; long-term and stable policy and incentives for wind power developments; and an end to the delay in premium payments which has caused cash flow problems for the entire supply chain.