A new report released jointly by the Chinese Renewable Energy Industries Association (CREIA), Greenpeace and the Global Wind Energy Council (GWEC) argues that China’s current wind power pricing mechanism must be overhauled.
The report reviews the development of wind power and its pricing system in China, looking closely at state-sponsored wind concession projects. The report says the tendering system used for wind power pricing is unclear and has had a negative impact on investment.
China’s Renewable Energy Law, which states that the grid feed-in rates of wind-sourced power should be determined by tender, came into effect early this year. The Law, says the report, has drawn a barrage of criticism from industry players, who fear that the practice will lead to low prices that deny investors a reasonable profit.
The report calls on the Chinese government to change the tender mechanism for a fixed tariff system.
CREIA secretary general Li Junfeng commented: “Wind power is a new industry which needs support. The current pricing policy does not support wind power development, and must be changed.” Steve Sawyer, the Climate and Energy Policy Advisor of Greenpeace International, added: “China has a superb opportunity to develop wind power, but the development relies heavily on an enabling pricing system.”
By the end of 2005, China had built 61 wind farms with an installed capacity of 1,260 MW, ranking seventh in the world, and has announced plans to install 30,000 MW by 2020.
Meanwhile, Vestas has received orders for a total of 50 units of its V80-2.0 MW turbine and 53 units of its V52-850 kW turbine for two wind power projects in China.
The total of 145 MW in orders have been placed by Longyuan Pingtan Wind Power Co and Huaneng Shantou Wind Power Co, respectively.
Delivery of the turbines will start in the last quarter of 2006 and commissioning of the is planned to take place during 2007.
The projects are located on the Islands Pingtan and Nanao, located in the south-eastern province of Fujian.
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