Longyuan Power, China’s largest wind power developer, is committed to offshore wind power in the long term, but considers it "impractical" to develop large-scale projects at present due to poor returns.
Speaking after a share issue on the Hong Kong stock exchange, Jia Nansong, secretary of the board of directors, said Longyuan Power had the technological and construction capabilities needed to develop large-scale offshore wind, but was being held back by its high cost.
Longyuan Power raised 2.9 billion Hong Kong dollars ($375m) in Hong Kong on Monday. Half will be used for Chinese onshore wind, 20% (around $75m) for Chinese offshore wind, 15% in overseas wind and solar, 5% in Chinese solar, and 10% in supplementing operating capital.
The company issued 572 million shares, 21.11% of its total stock, to more than 100 international investors, from Asia, the United States, Canada and Europe.
Last month, Longyuan Power completed the second stage of its 50MW inter-tidal project in Rudong, east China’s Jiangsu province. To date, the developer has 182MW installed capacity in inter-tidal projects connected to the grid, the largest in China. It has also won approval to develop a 400MW offshore wind farm in south China’s Fujian province.
"The costs of constructing offshore wind farms are two to three times higher than onshore wind farms," said Jia. He explained that the feed-in tariff for electricity generated by Longyuan Power’s Rudong inter-tidal project was 0.778 yuan/kWh, almost the same as those for onshore projects. "It is hard to make profits with the offshore wind projects," Jia pointed out.
Offshore wind projects are significant as demonstration projects, but it would be impractical to expect large-scale offshore wind development in China right away, Jia said. Offshore wind will be a priority for the company in the future, he added.