Page 244 - 2019 White Paper on the Business Environment in China
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9 White Paper on the Business Environment in China
poor site selection or geography (wind turbines being Holdings Co., Ltd. More importantly, China has complex
installed in locations with weak winds), a lack of adequate conditions of ocean currents and seabed geology, and is
transmission lines, and the distance electricity has to be prone to typhoons, Chen said. “Our technology that can
transmitted to population centers. Some factors such as handle these challenges is hopefully a cheaper option of
better grid connectivity can be solved for existing assets, clean energy for the world” (Xinhua, China Fuels Clean).
while others such as inferior technology or poor site
selection are locked in once steel is in the ground. China is China has been the driver of global market growth for
expected to remain a global straggler in capacity factors wind power since 2009. The country installed 19.7 GW
for the foreseeable future and may never match the US, of capacity in 2017, a huge amount that was more than
which benefits from better geography for wind and solar double any other market, but apparently much of that
installations. China’s inability to turn its renewable power power is wasted. China’s energy regulator has ordered
into renewable electricity also has major implications, local authorities to take heed of the grid capacity when
both good and bad, for energy investors (Chatsko). selecting new wind power projects in an attempt to
ensure that no more than five percent of the electricity
Wind Power they generate is wasted. China’s renewable energy law
compels grid firms to absorb the power generated by
Following a new high in 2015, China saw drops clean sources such as wind and solar. However, many
in installed capacity of wind power projects in both projects have been left with inadequate grid access, a
2016 and 2017. Installed capacity of wind power problem commonly known as “curtailment”. Regulators
projects is expected to regain momentum, spurred have sought to manage the pace of construction to give
by a combination of factors that include advances in grids more time to expand transmission capacity, but 12
technology, reductions in costs, expected declines percent of total generated wind power was still wasted in
in electricity prices, enhanced profitability of power 2017, as well as six percent of solar, according to official
stations, and development of offshore wind power figures. The new guidelines published by China’s National
projects. Industry consolidation has become increasingly Energy Administration (NEA) in May 2018 said priority
apparent in the wind power equipment manufacturing should now be given to cross-regional wind power bases
industry. The four largest manufacturers of onshore that can deliver electricity to different regional grids.
wind turbines—Denmark’s Vestas, Germany’s Siemens The projects should be backed by cross-regional power
Gamesa, China’s Goldwind and US-based GE—supplied supply agreements as well as commitments from the
53 percent of the global wind market in 2017. Vestas end-user provinces to build the required transmission
continued industry leadership, commissioning 7.7 GW of capacity. Projects on unused and untaxed land will also
new onshore capacity, a 16 percent share of the global be favored in 2018, the guidelines said, as well as those on
market. Goldwind commissioned 5.4 GW of the new established wind power bases, where weather conditions
capacity for a share of 11 percent. Riyghly 90 percent of are most favorable and subsidies are not required. From
Goldwind’s turbines were commissioned in China (Liu, 2019, all large-scale onshore and offshore wind power
Wind Power). plants must be subject to a competitive tender process,
with bids based on construction costs as well as power
The Global Wind Energy Council ranks China third in prices, the regulator said. The tariff for each project
terms of total installed capacity of offshore wind turbines, must not exceed the benchmark set by the government
accounting for 11 percent of the world’s total as of the end (Reuters, China Tightens).
of 2016, after Britain and Germany. Since 2017, several
coastal provinces have released their development plans Solar Power
for offshore wind power, with a total installed capacity
exceeding 100 million KW. In China, the capacity rating of The world’s largest operating utility-scale solar
an offshore wind turbine is 1.5 to 2 times that of those on projects are concentrated in China and India, according
land. The new-generation wind turbines being developed to IEEFA (Watanabe). Since China announced its plans
are expected to have a capacity quadruple that of a land- to support distributed solar power generation in 2012,
based turbine. The rapid development of China’s offshore solar panels have been mushrooming on residents’ roofs,
wind energy industry is expected to form an industrial with unused generated power integrated to the national
chain of high-end offshore equipment with a value of power grid. By selling the generated solar power, many
1 trillion yuan, said Chen Sui, chairman of CGN Energy farmers in less-developed regions have lifted themselves
244
poor site selection or geography (wind turbines being Holdings Co., Ltd. More importantly, China has complex
installed in locations with weak winds), a lack of adequate conditions of ocean currents and seabed geology, and is
transmission lines, and the distance electricity has to be prone to typhoons, Chen said. “Our technology that can
transmitted to population centers. Some factors such as handle these challenges is hopefully a cheaper option of
better grid connectivity can be solved for existing assets, clean energy for the world” (Xinhua, China Fuels Clean).
while others such as inferior technology or poor site
selection are locked in once steel is in the ground. China is China has been the driver of global market growth for
expected to remain a global straggler in capacity factors wind power since 2009. The country installed 19.7 GW
for the foreseeable future and may never match the US, of capacity in 2017, a huge amount that was more than
which benefits from better geography for wind and solar double any other market, but apparently much of that
installations. China’s inability to turn its renewable power power is wasted. China’s energy regulator has ordered
into renewable electricity also has major implications, local authorities to take heed of the grid capacity when
both good and bad, for energy investors (Chatsko). selecting new wind power projects in an attempt to
ensure that no more than five percent of the electricity
Wind Power they generate is wasted. China’s renewable energy law
compels grid firms to absorb the power generated by
Following a new high in 2015, China saw drops clean sources such as wind and solar. However, many
in installed capacity of wind power projects in both projects have been left with inadequate grid access, a
2016 and 2017. Installed capacity of wind power problem commonly known as “curtailment”. Regulators
projects is expected to regain momentum, spurred have sought to manage the pace of construction to give
by a combination of factors that include advances in grids more time to expand transmission capacity, but 12
technology, reductions in costs, expected declines percent of total generated wind power was still wasted in
in electricity prices, enhanced profitability of power 2017, as well as six percent of solar, according to official
stations, and development of offshore wind power figures. The new guidelines published by China’s National
projects. Industry consolidation has become increasingly Energy Administration (NEA) in May 2018 said priority
apparent in the wind power equipment manufacturing should now be given to cross-regional wind power bases
industry. The four largest manufacturers of onshore that can deliver electricity to different regional grids.
wind turbines—Denmark’s Vestas, Germany’s Siemens The projects should be backed by cross-regional power
Gamesa, China’s Goldwind and US-based GE—supplied supply agreements as well as commitments from the
53 percent of the global wind market in 2017. Vestas end-user provinces to build the required transmission
continued industry leadership, commissioning 7.7 GW of capacity. Projects on unused and untaxed land will also
new onshore capacity, a 16 percent share of the global be favored in 2018, the guidelines said, as well as those on
market. Goldwind commissioned 5.4 GW of the new established wind power bases, where weather conditions
capacity for a share of 11 percent. Riyghly 90 percent of are most favorable and subsidies are not required. From
Goldwind’s turbines were commissioned in China (Liu, 2019, all large-scale onshore and offshore wind power
Wind Power). plants must be subject to a competitive tender process,
with bids based on construction costs as well as power
The Global Wind Energy Council ranks China third in prices, the regulator said. The tariff for each project
terms of total installed capacity of offshore wind turbines, must not exceed the benchmark set by the government
accounting for 11 percent of the world’s total as of the end (Reuters, China Tightens).
of 2016, after Britain and Germany. Since 2017, several
coastal provinces have released their development plans Solar Power
for offshore wind power, with a total installed capacity
exceeding 100 million KW. In China, the capacity rating of The world’s largest operating utility-scale solar
an offshore wind turbine is 1.5 to 2 times that of those on projects are concentrated in China and India, according
land. The new-generation wind turbines being developed to IEEFA (Watanabe). Since China announced its plans
are expected to have a capacity quadruple that of a land- to support distributed solar power generation in 2012,
based turbine. The rapid development of China’s offshore solar panels have been mushrooming on residents’ roofs,
wind energy industry is expected to form an industrial with unused generated power integrated to the national
chain of high-end offshore equipment with a value of power grid. By selling the generated solar power, many
1 trillion yuan, said Chen Sui, chairman of CGN Energy farmers in less-developed regions have lifted themselves
244
