Let a thousand wind farms bloom

In wind energy, as in everything else, China is set to become a global giant. But the development of wind farms and a domestic turbine manufacturing base are far from plain sailing, as Michael Rank reports

China has ambitious plans to quadruple its wind generating capacity to 5,000MW by 2010. That target looked unrealistic just a year or two ago but, after a sluggish start, the industry is now beginning to take off. The country’s installed capacity shot up to 1,260MW last year when it brought nearly 500MW onstream, more than double the 2004 figure, and it looks set to climb steeply.

However, the Chinese wind energy industry remains hampered by high costs and low investment. And the wind generating capacity of the world’s fastest-growing economy accounts for only about 2% of the global total.

China needs to commit itself seriously to renewable energy if it is to play its part in cutting global greenhouse gas emissions: China is the world’s biggest emitter of energy-related carbon dioxide (CO2) after the US and its emissions are increasing fast. As China attempts to tackle rising emissions, wind power is likely to play a significant role.

Wind power with Chinese characteristics

But Chinese wind energy executives say they are frustrated by the high cost of imported technology, which means that they often have to rely on inefficient and outdated turbines. Domestically produced turbines have a capacity of less than 1MW, much lower than foreign models, and have ‘fixed pitch, constant speed’ control systems, rather than the more sophisticated ‘variable pitch, variable speed’ designs.

Expansion of wind power capacity has been based largely on government tendering but this has resulted in firms sometimes underbidding to win contracts, often at the expense of project quality. And, as the Global Wind Energy Council (GWEC) has noted, “the feed-in tariffs offered by winning concessions have been extremely low, providing little incentive for further investment”.

Experts say a national feed-in tariff is necessary to promote wind power, under which local transmission companies would buy fixed amounts of power at government-negotiated rates. A report by the China Sustainable Energy Forum – a San Francisco-based think tank – noted that such tariffs helped to make Germany the world leader in installed wind capacity. It said that transmission companies tend to be opposed to such tariffs as they forced to pass the associated costs on to the consumer, and suggested the burden of increased rates could be shared through a surcharge that goes into a “public benefits fund”.The report noted that there are many examples of such surcharges being used in China, including for the giant Three Gorges Dam project.

The problems facing the Chinese wind energy industry were highlighted in August when only state-owned companies took part in a government-run tender to develop three wind farms with total capacity of 700MW. The bids offered – to deliver power for between 0.4 and 0.6 yuan ($0.05–0.075)/kWh – were widely seen as too low to be economically viable but, despite the Communist Party’s quasi-capitalist policies, state companies remain less concerned about profitability than private firms.

But while foreign companies continue to be reluctant to operate wind farms in China, they are increasingly willing to open up factories there. Denmark’s Vestas decided this year to double the capacity of its factory in the northern city of Tianjin to about 1,200 blades a year, making the announcement before the factory had even opened. It also announced plans to build a generator factory with an initial annual capacity of 350 one megawatt units. And GE Energy of the US opened a factory in the northeastern city of Shenyang which this year will produce 100 1.5MW wind turbines. GE reports orders for 700MW of turbines for China.

Undoubtedly, the country has enormous ambitions for wind power and is planning what would become the world’s biggest wind farm, near Shanghai, China’s biggest industrial centre. If the giant third stage of the project is completed, the Rudong farm will have an installed capacity of 1,050MW, with investment totalling 8 billion yuan ($1 billion).

Wind farms in China can only compete with coal-fired power generation by obtaining additional income via the CDM

The Chinese government seems determined for wind energy to play its part in combatting global warming, and a wind farm in Inner Mongolia has become the first in the world to be registered as a Clean Development Mechanism (CDM) project. The 25.8MW Huitengxile wind plant will lead to a reduction in CO2 emissions of about 500,000 tonnes a year – for which it can generate carbon credits to be sold to Western buyers for use against Kyoto Protocol emissions targets. Those behind the project say wind farms in China can only compete with cheap, largescale coal-fired power generation by obtaining additional income via the CDM.

As well as onshore wind plants, China is also planning to build offshore wind generating capacity. Construction of the country’s first offshore wind farm, with a capacity of 100MW, will begin next year off the northern province of Hebei. A similar-sized plant is planned off Shanghai, and Hu Chuanyu, a senior engineer at domestic wind turbine manufacturer and project developer Shanghai Wind Power Co, said Shanghai alone has a potential offshore wind power capacity of at least 3,000MW.

China aims to boost its renewable energy capacity to 15% of total electricity supply by 2010 and to invest $180 billion in renewables between now and 2020. At present, wind energy accounts for just 0.14% of supply, even lower than the US (0.6%). But the GWEC estimates that China could reach as much as 170GW of installed wind power capacity by 2020, given the political will, and with China’s vaunted world-beating ambitions, it would be foolhardy to dismiss this ambitious target out of hand.