China

China

First round tender hit by bureaucratic delays

CHINA: Conflict between China's National Energy Bureau (NEB) and the State Oceanic Administration (SOA) has delayed the progress of the country's first round of offshore wind projects and threatens to hold up the second round due to take place in the first half of this year.

At the heart of the dispute is the marine zoning allocated by the SOA, which designates what is and what is not permitted in marine areas. The SOA did not consider the ramifications for offshore wind development when creating its marine zones.

In 2010 the NEB did not invite the SOA to participate when it organised the public tender for the first four offshore concessions, which are all in Jiangsu province — Dongtai (200MW inter-tidal), Dafeng (200MW inter-tidal), Sheyang (300MW offshore) and Binhai (300MW offshore).

But one month after the NEB announced the tender the SOA readjusted its zoning bringing it into conflict with the NEB.

Yang Xiaosheng, chief engineer of Longyuan Power, said his company has postponed the Dafeng project because the site now partially overlaps with the Jiangsu reclamation zones and rare-bird protection areas. This was despite Longyuan changing its proposed wind-farm site three times.

The Dongtai project, developed by Shandong Luneng, has met a similar problem. The developer said that proposed readjustments to the site location, moving it from 21 kilometres offshore to 32 kilometres offshore make it less like an inter-tidal project and more like a true offshore scheme.

Datang Renewables, developer of the Binhai wind farm, said that although the location of its scheme is not affected, the site has been squeezed in area by one third, lowering the turbine unit utilisation and affecting wind power output. And China Power Corporation's Sheyang scheme has hit a problem with the beach landing site for its 220kV cables, which will now have to be buried underground to avoid a national nature reserve.

Disincentive

Changes to the site locations for the four projects will increase the infrastructure costs and may prove to be a deterrent to investors. In the face of the project delays, Shi Lishan, deputy director of the new energy and renewables department of the NEB said China will encourage tender-winning companies to start building all four concession projects later this year. Industry insiders believe the projects will take five years to complete, with the earliest possible start being Longyuan's Dafeng project, which could conceivably get SOA approval by the end of this year.

But the China Renewable Energy Industries Association fears the tender and concession delays could threaten the country's objective to develop 5GW of offshore wind by 2015 and 30GW by 2020. Secretary general Zhang Ping says: "I do not think we can fulfil the 5GW offshore wind power objective." He also expressed concern about the financial support available for the revised schemes. "The tender-winning feed-in tariffs are too low. Considering construction costs, the offshore concession project developers will lose money".

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