"Our joint venture is treading new ground by planning a commercial project," says Uwe Jenneskens of WindSolar. The around 300 MW of wind capacity installed in China up to now has mostly been financed with soft loans, he says.
The price of the wind power must be negotiated with two contract partners, the local utility and the province price regulatory authority. The national State Planning Commission then has to give final approval. "A power purchase agreement is critical," says Jenneskens. "The comfortable German premium payment arrangement does not exist in China. We hope to get a fifteen year agreement. For international financing we need at least ten years." Project operators in China have otherwise had to renegotiate their power price each year, he adds.
Assuming 32, 600 kW Nordex N43 turbines are used, WindSolar estimates that project investment will reach about $20.7 million. The Chinese government demands that imports should not exceed $1000 per kilowatt of capacity, says Jenneskens.
WindSolar's target is CNY 0.75/kWh, or about $0.10/kWh, he says. Electricity generated in conventional power stations commands a price of CNY 0.08 to 0.15/kWh "or just a fifth of what we need." But a comparison with the major Three Gorges hydro project puts things in perspective, he says. It is heavily burdened with added costs like resettling the population and securing the river transport routes.
"The region has a potential for 300 MW and our project could later be expanded to 50 MW," Jenneskens says. Average wind speeds at hub height are expected to be about 8.1 m/s. Measurements between May and November 2000 yielded wind speeds averaging 5.43 m/s and 6.99 m/s at a height of 40 metres, he reports.
Wind development in the region, including this project, is supported by the Chinese Wuhan Science and Technology Commission. The authority has received overseas aid support in carrying out wind measurements and in drawing up a feasibility study for the wind location from the German development aid organisation Deutsche Gesellschaft für Technische Zusammenarbeit, or GTZ.