Chinese firms see profit in weak winds

CHINA: Chinese wind companies are increasingly looking towards areas with weaker wind speeds to further their expansion.

Longyuan Power Group and United Power, subsidiaries of state-owned electric power business China Guodian Corporation, have both made moves in these so-called fourth-type wind-resource areas.

In July 2009, China's National Development and Reform Commission separated the country's wind resources into four types according to wind speeds. Benchmark prices were set at CNY 0.51, 0.54. 0.58 and 0.61 ($0.076, $0.080, $0.086 and $0.091) per kilowatt hour.

The first three types, with stronger winds, are largely located in the north, north-east and north-west of the country. The fourth type is mainly located in the inland areas between these zones - a vast, unexplored region.

Type-four areas include the provinces of Anhui in the east, Hunan and Hubei in the centre, Fujian in the south-east, and Yunnan in the south-west.

Longyuan Power Group, China's largest wind developer, has signed a framework agreement with Chuzhou City in Anhui province. Under the agreement, Longyuan is developing four wind farms in Chuzhou, totalling 600MW.

The project will use 1.5MW turbines, with the first due to be connected to the local grid at the end of the year.

"Investing in construction of wind farms in weak wind speed areas is only about 5% more expensive than in rich wind resources areas," says Xie Changjun, general manager of Longyuan. "We can offset this extra investment through improving internal efficiency. Therefore, we will have similar economic returns as from investing in wind farms in rich wind resources areas."

Weak wind speed areas are much more densely populated than the rich wind speed areas and have a large electricity demand.

This means there is no need to send the power over long distances, as is the case with wind generation in northern areas, which will save on grid construction. "We will set up a group of wind farms in the weak wind speed areas of Anhui, Liaoning and Shandong over the next two to three years," says Xie.

Turbine maker United Power also has plans to build wind farms in areas with low wind speeds. The company says it has signed a co-operation agreement with Tianchang, a city under the administration of Chuzhou, to invest in building wind farms with a total capacity of 150MW.

Tianchang has about 1,800 hours of wind resources available annually. Since the region runs short of power supply, the wind farms will be able to run at their full capacity. The project's internal return on investment (ROI) may be at least 12%, a very satisfactory figure, according to United Power.

In Inner Mongolia, wind farms may effectively operate for 3,000 hours a year. But grid restrictions mean the turbines cannot connect to the grid for about half this time. So wind projects in these rich wind resource areas will actually run for less than 2,000 hours a year - not much better than wind farms at full capacity in type-four areas.

United Power has also signed an exclusive co-operation agreement with Siyang in Jiangsu province to construct 150MW near Hongze Lake. And electric power company China Huadian Corporation has started to invest in wind farms in Chenzhou, Hunan province.

Turbines for weak wind speed areas need longer blades than turbines in high wind speed areas. They also need to be installed at higher hubs - on average at a height of 70 meters, compared to 65 meters on normal turbines. Other systems need adjustment too, making weak wind speed turbines around 10% more expensive than normal turbines.

In early May, United Power rolled off the production line 42-metre-long blades for 1.5MW doubly fed turbines for high altitude and weak wind speed areas, the first of their kind in China. Longyuan Power Group will use some of these turbines for its Chuzhou project.

Shi Pengfei, vice-president of the China Wind Energy Association, predicts that though building in weak wind speed areas is in its early stages, it will be a growing trend in China's wind industry.

"But with quality inland wind resources fully occupied and offshore wind power resources grabbed in growingly fierce competitions, China's major electric power companies will naturally set their eyes on building wind farms in weak wind speed areas," Shi says.

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