China has regained the title of the world’s top wind power player in terms of total installed capacity. But more output inevitably means that more electricity is wasted as the national grid struggles to absorb wild fluctuations in wind farm production. This paradox hinders the growth of the wind power industry but there could be a change in the air with the expectation of more official support.
The National Energy Administration said earlier this week that the State Council, China’s cabinet, is reviewing a basket of measures to foster the wind energy sector. The Shanghai Securities News quoted an unnamed expert as saying that the package will be comparable with that launched earlier for solar power generation. That suggests that wind energy’s access to the grid and the full acquisition of the power generated by wind farms are on the table.
About 10 billion yuan (US$1.63 billion) in wind power was lost last year because of grid issues, Xinhua reported. The figure is bound to surge this year with the rapid expansion of installations nationwide. If the grid connection is substantially improved and full acquisition is in place, the lost power can be turned into instant profit for wind farm operators such as China Longyuan Power Group (00916.HK).
The National Development and Reform Commission also announced this week that on-grid tariffs will be cut for coal-fired power plants for the first time in four years while household electricity rates will stay unchanged, helping to enlarge the size of the state’s renewable energy development fund. So now, Beijing should have more financial muscle to promote wind power.
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