China Economic Review
Charting China’s changing economic terrain · Since 1990
Wind power in China blows in at different prices
September 6, 2009
China has instituted a new system of differentiated wind energy tariffs based on four wind energy zones. And no, this is not the first time that the wind has been given different values. South Korea did it in 2005.The amount of planned feed-in pay lies between RMB 0.51 and RMB 0.61 per kilowatt hour and depends on the region where a project goes on grid.
First the wind and then the sun.
China is expected to announce feed-in tariffs for solar power sometime later this year. One suggestion is that suggesting the tariff for large-scale solar plants could be equivalent to $0.22/kWh. (Note that Australia already has a similar system in place.)
China is the fourth-largest wind power producer, behind the US, Germany and Spain but is moving rapidly up the scale. In the first half of 2009 the People’s Republic installed 4,440 MW of new capacity, an increase of around 120%. The average price of Chinese made wind turbines has fallen by about 15% in the last year.
The price drop has made wind power farms more profitable. The average internal rate of return of wind farms has risen by about 2.5 percentage points over the last year because of lower turbine prices.Sinovel Wind seems to be the biggest manufacturer with a capacity of 1,000 1.5 MW wind turbines a year. Now it is moving up to 3 MW and 5 MW wind turbines.
In 2007, the country’s objective was to have enough wind plants built to generate 5 gigawatts (GW) of energy by 2010. By the end of 2008, it had already achieved 12.2 GW, and revised forecasts say that China could reach 150 GW by 2020.
China’s renewable energy installed capacity is predicted to reach 290 million kilowatts by 2020, accounting for 17% of the total power used.
Reve, the magazine of wind power, reported that Washington is trying to persuade Beijing to accept a set of binding targets for GHG emission cuts. Though China has not committed to any, it has made huge efforts to cut emissions.