Analysis - Chinese wind curtailments double in 2012

CHINA: Wind farm owners lost out on revenues of $1.6 billion last year as the amount of wind-generated electricity that was prevented from feeding into the grid nearly doubled, according to figures released by the Chinese Wind Energy Association (CWEA).

Yunnan province: Wind power curtailments hit southern parts of China for the first time in 2012 (photo:treasuresthouhast)

Curtailment forced Chinese wind farms to give up the opportunity to generate 20 billion kWh of electricity in 2012, almost twice the curtailed output in 2011 of 12.3 billion kWh. The wind curtailments in 2012 equate to a financial loss of CNY 10 billion ($1.6 billion).

CWEA secretary-general Qin Haiyan said the curtailment forced 20% to 30% of turbines to lie idle in wind farms in 2012. In some areas, such as the eastern part of Inner Mongolia, the curtailment left more than 50% of turbines idle.

More worryingly, in 2012 the curtailment was not confined to the northern regions. Southern areas that have never previously suffered from curtailment joined in by making way for hydropower following abundant rainfall. In Dali, southwest China's Yunnan province, around 10% of turbines were at a standstill in 2012.

As a result,wind farms were largely unprofitable in the restricted areas. Yang Xiaosheng, chief engineer of Longyuan Power, China's largest wind power developer, said: "Even if judged with the average 16% curtailment in 2011, most wind farms in northern China are difficult to bear. Making profits is an extravagant hope and could be realised only by a tiny minority."

In 2012, Longyuan Power generated 16,817 billion kWh (16,816,914MWh) of wind power, an increase of 25.95% on 2011 figures. However, it lost the opportunity to generate 2.6 billion kWh of electricity, to the value of CNY 1.3 billion.

Years of struggle

Large scale curtailment first began in 2009 in Inner Mongolia, and spread nationwide in 2010. In 2011, Chinese wind farms abandoned the opportunity to generate 12.3 billion kWh electricity. The curtailment ratio reached 16% in the northern areas.

China's record-breaking curtailment figures for 2012 follow promises from the State Grid and the National Energy Bureau (NEB) that the situation would improve.

In mid November, NEB vice-minister Liu Qi vowed to "break away systematic obstacles" to promote healthy development of wind power. Later that month, State Grid spokesman Zhang Zhengling pledged that State Grid would invest more to expand grid utilities and facilitate trans-province power transmission to ensure the full consumption of wind power.

Lack of grid infrastructure to transfer electricity over the long distances from China's wind-rich north to its main centres of consumption in the south and east is blamed as one of the key reasons for curtailments.

Another issue is the small level of peaking power plants - such as wind farms - currently allowed into the overall electricity mix by the State Grid.

The peak regulation capacity with other power sources, such as fuel oil and pumped storage, is less than 2%, compared with 34% in Spain and 47% in the US.

Finally, China's existing planned electric quantity mode is another major element leading to the curtailment.

Hou Youhua, deputy director of the information centre of utility Inner Mongolia Power Company, said China's grid companies follow a pattern of dispatching electric power generation set one day in advance. In other words, today's electric energy production was decided in the afternoon of yesterday.

Once it is decided, the output will not be altered. But it is often inaccurate to forecast wind power generation one day earlier. As a result, the grid has to make curtailments or suffer from fluctuating load flow from wind.

"If we could change the electric power dispatching system to a real-time-based operation, we would markedly solve the aforesaid problems," said Hou.

Giving way

Under the planned electric quantity mode, thermal and hydropower power plants have their fixed quotas. Wind farms have to give way for both kinds of plants to allow them to meet their quotas first.

Gao Hu, a senior researcher at energy research institute the National Development and Reform Commission, said China has finished a quota system for power generation from renewable energy sources. The State Council, the central government, is expected to approve it this year.

Gao said the new quota system makes mandatory provisions on the duties of grid companies, power companies and local governments for receiving power from renewable energy sources, including wind.

In the meantime, developers are readjusting their strategies to avoid curtailments. Longyuan Power has shifted its focus to the non-curtailment regions, looking to develop projects in high altitude and low wind speed areas, and offshore to meet local demands, said Yang.