Offshore - Eastern superpower eyes maritime might

CHINA: Offshore wind is about to explode in China. 2010 is to be the start of the sector's transition from research and pilot projects to operational wind farms.

In March, Shi Lishan, deputy director of the New Energy and Renewable Energy Department of the National Energy Bureau (NEB), told the annual meeting of the Chinese Renewable Energy Industry Association: "We will give top priority to developing offshore wind power projects in the course of boosting the flourishing wind power industry this year."

China believes it has phenomenal potential for offshore wind. The China Meteorological Administration has estimated it at more than 750GW - far higher than the 253GW potential for land-based wind.

China's eastern coastal areas, particularly Jiangsu Province, boast sound conditions to develop wind farms on beaches and in offshore areas. These coastal provinces are largely the economic engines of the country, raising great demands for electric power. But they run short of fossil energy sources.

Developing offshore wind farms in these areas will reduce local energy shortages and avoid the problem of long-distance transmission experienced by China's major land-based wind farms, according to Qin Haiyan, secretary general of the China Wind Energy Association.

"Compared with land-based wind farms, offshore wind farms are competitive in wind power resources, land and ecology," says Qin. "Therefore, we need to boost offshore wind power in the future."

In terms of capacity installed in the past year, China recently overtook Germany as the largest wind power developer after the US. Last year, it installed 13GW of wind power, more than doubling the 2008 capacity.

By the end of 2009, China's total installed wind capacity exceeded 25GW.

However, offshore wind development in China is still in the early stages, due to complex operating environments for offshore turbines, high technological requirements and construction difficulties, according to Qin. For example, offshore turbines will have to withstand typhoons, which regularly rampage the coasts of China.

In 2006, a typhoon blowing at 78m/s hit Cangnan County in east China's Zhejiang Province, damaging 20 of the Cangnan wind farm's 28 land-based turbines.

Europe is the unquestioned leader in offshore wind.

In 2009, 626MW was installed there, compared with 344MW in 2008, according to Danish consultancy BTM Consult. But China has not been sitting still. It has been piloting offshore wind since 2007, when the China National Offshore Oil Corporation (CNOOC) installed a 1.5MW direct-drive wind turbine developed by Chinese manufacturer Goldwind at the Suizhong Oilfield in north China's Bohai Sea. But it was not connected to power grids for commercial operation because of its isolated location.

The Donghai Bridge offshore wind farm is the only pilot offshore wind farm connected to the local power grid. It was officially approved as a pilot by the Energy Research Institute of National Development and Reform Commission. Construction began in 2008 and cost CNY2.36 billion ($346 million). It has a total capacity of 102MW and comprises 34 3MW turbines jointly developed by Sinovel, the country's largest wind turbine producer, and Austria's Windtec.

In addition to these two pilots, the NEB has asked the country's 11 coastal provinces to map out offshore wind farm programmes. Wind farms are now planned for multiple areas of China's coast (see map). The NEB expects to approve a number of sites for offshore wind farms, each with a capacity of 1GW or more.

Showcase regions

Jiangsu and Zhejiang provinces are priorities in the country's offshore wind power programme. Jiangsu has about 18GW of exploitable offshore wind power resources, according to an early-stage study. By 2020, the province expects to construct around 7GW of both inter-tidal and offshore wind farms. In inter-tidal zones, wind turbine foundations are exposed during low tide but submerged by up to five metres of water at high tide, explains consultancy Azure International.

Zhejiang has a target of constructing 100MW capacity of offshore wind farms before 2012, 1.05GW by 2015 and 2.7GW by 2020. When all the local offshore wind power programmes and pilots are completed, China intends to integrate them into a national offshore wind power plan.

Earlier this year, the NEB held two meetings with industry officials and experts to discuss offshore concession projects, and last month China requested proposals. Industry experts believe that since China has only just begun offshore development, the round of tenders will not involve a large number of projects. Furthermore, they forecast that the projects will come in at around 200-300MW. "Not every project reported by the 11 provinces and municipalities will be adopted this time. NEB will choose from among them and put forward the selected sites one by one for public tender," an unnamed official was quoted as saying in the Shanghai Securities News.

In January, the NEB and government agency State Oceanic Administration published an Interim Measure on the Management of Offshore Wind Farm Development.

The 38-article document regulates every aspect of offshore wind farm development across the country. It stipulates that offshore wind farms must be developed through public tender, whereby prices for sending power to grids, project plans, technical abilities and performance results will all be considered.

NEB's Shi says that by using public tender for concession projects, China will obtain reasonable prices and choose the most competitive enterprises to take on offshore wind farm construction. This should also support localised production of equipment for offshore wind farms and avoid redundant development, says Shi.

"When the market becomes mature with reasonable prices and sound management in the future, we will not have to rely solely on public tender for concession projects," says Shi. "We may simply proceed with official procedures to approve the projects."

China held five rounds of public tender for land-based wind power concession projects between 2003 and 2008. They are credited with keeping down power generation costs for wind farms, and promoted the development of Chinese wind turbine manufacturers.

The Interim Measure states that the developers of offshore wind farms must be Chinese-funded enterprises or Sino-foreign joint ventures with majority Chinese ownership. It also requires businesses to start construction within two years of winning the tender. Otherwise the NEB will revoke development rights.

Developers are already lining up to be in pole position when the race to construct offshore wind farms begins. CNOOC is beginning preparatory work this year on an offshore wind farm in Weihai, in east China's Shandong Province. Installed capacity is scheduled to reach 1.1GW in ten years. The first stage will have 30 1.5MW turbines.

In February, Shenhua Group Corporation announced it would start early-phase works for the third stage of the Dongtai Wind Farm, a 300MW offshore project, with 84 3.6MW turbines from Shanghai Electric. It has also started planning for the fourth stage 300MW offshore project, scheduled to have 84 Shanghai Electric 3.6MW turbines.

Production boosted

Leading Chinese turbine manufacturers have also been scaling up production and investing heavily in the offshore turbine business to meet forecast demand.

Sinovel, an early starter, began to develop offshore turbines in 2006. It has focused on developing 3MW turbines, which were launched in December 2008. Chen Danghui, technical director of Sinovel, says that they are a third cheaper than models by foreign counterparts.

In January, Sinovel began construction on a plant for 5MW offshore turbines in Yancheng, Jiangsu Province. The project, which cost CNY1.5 billion ($220 million), is expected to be finished at the end of the year. Han Junliang, Sinovel board chairman, says that the design of the 5MW turbines is complete and that the first sample turbine will be produced at the end of the year.

Also in January, the NEB approved Sinovel's China National Energy Offshore Wind Power Technology and Equipment R&D Centre, the only state-level research and development facility dedicated to studying offshore wind power equipment.

Goldwind, Sinovel's main rival in China, has established its offshore wind power industrial base in Jiangsu Province. The company is expected to invest as much as CNY300-500 million ($44-73 million) in the first stage of the project, whose completion is scheduled for October. Planned annual capacity is 300 mega-watt class turbines, rising to as high as 1,000 within five years. Goldwind produced its first prototype 1.5MW turbine in 2007, and is now developing 2.5MW and 3MW turbines.

Not to be outdone

Dongfang Electric and Shanghai Electric are developing 3.6MW wind turbines. Construction of the Shanghai Electric base for these turbines is expected to be completed in Dongtai, Jiangsu Province, in October.

And in August, XEMC, in central China's Hunan Province, bought Darwind, an offshore wind turbine producer based in the Netherlands, to obtain its 5MW direct-drive wind turbine technology and 2MW wind turbine production line. Meanwhile, Huayi Electric, Changzhen Electric, Yinhe Avantis, Chongqing Haizhuang and Guodian United Power have also mapped out plans to tap the offshore wind turbine market.

Foreign wind turbine producers are also eager to get a slice of the pie. Denmark's Vestas has intensified its market research and exploration of the Chinese offshore wind power market and last summer announced a plan to set up a dedicated office. It aims to build 2MW and 3MW offshore wind turbines at its production base in north China's Tianjin city.

Elsewhere, senior officials at Siemens in Germany are considering setting up an offshore turbine plant in Weihai, Shandong Province.


China is set to help boost global offshore wind industry growth by expanding its technology worldwide and tapping foreign expertise, a report by Beijing-based consultancy Azure International has found.

China, Norway and Offshore Wind Development, commissioned by the Norwegian arm of green lobby group WWF, finds that Chinese government policies, offshore wind energy resources and market development are likely to result in the installation of an estimated 30GW of offshore wind power capacity in China over the next decade. Azure expects this market to reach EUR74 billion.

But the report says that the Chinese could find new markets for their offshore expertise and technology, particularly from energy firms in Norway, which has only modest wind power capacity but many years' experience exploiting offshore oil and gas reserves. While Norway can provide expertise in offshore research and development, boat design and deep-sea installation and service, China may find a market in Norway for its turbine design, foundations, boats, blades, generators, gearboxes and its huge pool of engineering students, the study says.

Meanwhile, Chinese firms are not idly awaiting the development of domestic support mechanisms - although these are on the way (see main story). "The onshore industry started to develop two years before the official policies were put into place," says Azure. "Once the national policies were in place, the industry had already reached 100% year-on-year growth."

The same trend appears to be occurring in offshore: the long-term pipeline of projects now totals 13.7GW, of which 514MW is to be developed within four years, according to the report. Several Chinese offshore turbines are being developed to meet demand both at home and - presumably - overseas.

"The same Chinese manufacturers who are interested in exporting onshore turbines are also committed to developing turbines appropriate for offshore wind applications," says Azure. "They will likely export these turbines once the technology is prototyped and in serial production."

Sinovel, the world's third-largest wind turbine supplier in 2009, is jointly developing a 3MW offshore turbine with Massachusetts-based American Superconductor (AMSC), while Goldwind, ranked fifth globally, and domestic rival Shanghai Electric are both developing models using proprietary technology.

Company Turbine Design Serial
company production
Sinovel 3MW AMSC and Sinovel 2010
Sinovel 5MW AMSC and Sinovel na
Dongfang 2.5MW AMSC 2012
Dongfang 5MW AMSC and Dongfang 2013
Goldwind 2.5MW Vensys and Goldwind 2010
Goldwind 3.0MW Independent 2010
XEMC 5MW XEMC Darwind 2011
Shanghai Elec 2MW Aerodyn na
Shanghai Elec 3.6MW Independent na
Source: Azure International

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