China

China

China Wind Power: Trade barriers hampering the industry

At the start of the China Wind Power 2019 conference and exhibition (21-24 October), the industry's global association has said now is the time to remove, rather than build, barriers in order to reach the world's emission reduction targets.

GWEC chief executive Ben Backwell
GWEC chief executive Ben Backwell

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The Global Wind Energy Council (GWEC), along with the International Renewable Energy Agency (Irena), the Chinese Wind Energy Association (CWEA) and the Chinese Renewable Energy Association (CREA) have organised the first Beijing Renewable Energy Investment Summit (BREIS) alongside the country’s main trade show.

At the launch of the summit, GWEC CEO Ben Backwell said the current public support for action on climate change was at "unprecedented" levels.

"And yet, every week we are hearing talk about new trade barriers and new restrictions on badly needed investments being introduced. Whether we are in Beijing, Brussels or Washington, we all face a common problem and need to cooperate to replace fossil fuels with renewables as fast as possible and at the lowest cost," said Backwell.

GWEC said restrictive tariffs "on key commodities and components could add up to 20% to wind turbine supply chain costs in some cases". This would slow down the roll-out of renewable energy "at a time when we need to be accelerating".

"Protectionism comes at a cost for the wind industry, which therefore undermines the job creation potential of the sector and a cost-effective global energy transition," GWEC reported WindEurope CEO, Giles Dickson, as saying at the summit.

"As market growth fluctuates and there’s a strong push for localisation, having supply chain flexibility is key, but trade wars and barriers do real damage to businesses by inflating prices," said Vestas senior vice president and GWEC chairman, Morten Dyrholm.

"It makes a global supply chain less global, making renewables less competitive. At Vestas, it’s clear that trade wars and barriers do not help spur localisation, and a healthy competition which is needed to attract investments," he added.

State of play

China is the world’s largest wind market by some margin, and will continue to dominate throughout the 2020s, even as it enters the post-subsidy era from 2021.

As of May, China had 60GW of approved project capacity waiting to be installed.

Under the subsidy-phase out policy, this capacity needs to be installed by the end of 2020 in order to qualify for the state’s feed-in tariff.

This could result in the Chinese market reaching the heights of 2015 when it installed over 30GW in a year.

In the first half of 2019, China added 9GW of new onshore capacity, which is up 50% on the same period of 2017.

Beyond 2020, however, China’s onshore market will slow to around 20GW a year under the new regime.

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