Auctions to boost China's annual growth

CHINA: Annual wind power additions in China are expected to rise following the shift to an auction system, according to new analysis.

China currently has just over 170GW of capacity installed, according to Windpower Intelligence (pic credit: Vestas)

Once the auction mechanism, which was announced in May 2018, is fully in place, average annual capacity additions will increase from 2021 to 2027, analysts at Make Consulting stated.

On average, more than 20GW will be added per year during the 10-year outlook to 2027.

China, which leads the world for wind-power installations, is expected to surpass 210GW of cumulative capacity by 2020, Make believes. The country had set itself this target in its 13th five-year plan for wind power in 2016.

Offshore wind and repowering will also be large contributors to this upwards trend, Make said.

"Due to the rapid increase in new capacity over the past years, China offers a great market opportunity for repowering," the analysts stated.

More than 300 turbines were due to be more than 20 years old by the end of 2017, with this number due to increase.

Developers, especially provincial state-owned operators and private companies, are also increasingly looking towards the distributed wind market.

However, because the capacity of such projects is typically small, "distributed wind power will unlikely affect annual wind capacity additions at large", the analysts added.

Instead, according to Make, the main driver for this growth will be the shift from a feed-in tariff to an auction mechanism.

In May of this year, China’s National Energy Administration (NEA) announced an auction mechanism for awarding future wind power projects in an attempt to reach grid parity.

Developers of new onshore wind projects in provinces yet to publish a 2018 development plan and of new onshore projects approved from the beginning of 2019 will now have to win capacity at auction.

Offshore projects without assigned developers and new offshore projects approved from the beginning of 2019 must also compete in auctions.

China has approximately 171.8GW of installed wind capacity, according to Windpower Intelligence, the research and data division of Windpower Monthly.