Xinjiang project kicks off big market -- Developer targets 500 MW

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Work is underway on the 30 MW first phase of the 100 MW Tuoli wind development in Tuoli Township in northwest China's Xinjiang Uygur Autonomous Region. GE Energy is supplying 20, 1.5 MW turbines, due for commissioning by the end of the year. The entire project is to cost CNY 900 million ($108.75 million) and the first phase, CNY 265 million ($32 million). When complete, it will bring the region's wind capacity to 158 MW. Two further phases -- for 30 MW and 40 MW -- are scheduled for 2006 and 2007.

The project sponsor, Beijing Guotou Energy Conservation Company (BGECC), says it hopes to continue expanding the Tuoli facility, eventually bringing it to 235 MW, most likely after 2010. Although BGECC is active in other forms of renewable energy development, this is its first wind project. Its goal is to install 500 MW of wind capacity in Xinjiang.

BGECC's entry into the wind market follows the introduction of China's renewable energy law (Windpower Monthly, April 2005). The government is aiming for renewables to supply 18% of electricity within 15 years and wants to see 20,000 MW of wind power by 2020. By the end of 2004, China's wind capacity was 765 MW. Incentives introduced to woo the wind industry include a 50% cut in import duties and sales tax and favourable medium and long term bank credits.

Xinjiang is particularly attractive to wind developers due to its rich wind resources, which are second only to Inner Mongolia, and its good grid and transportation infrastructures. Wind speeds average 6.2 m/s at a height of ten metres, making wind power generation relatively cost effective in Xinjiang at CNY 0.47/kWh ($0.058/kWh) compared with a typical CNY 0.06/kWh ($0.072/kWh) in the rest of the country.

"Wind energy is considered an investment with less risk and secure returns," says Chao Jiyao at the Xinjiang Economic & Trade Commission. "There're plenty of companies coming to Xinjiang for talks in wind energy investment." Another project of 200 MW is reportedly being negotiated between Xinjiang and BGECC.

The local government has designated the Tuoli wind farm a key project. The annual production of 95.43 million kWh will save 34,000 tonnes of coal and avoid the emission of 80,000 tonnes of carbon dioxide a year, it says. Xinjiang's vice chairman, E'uigen Iminbaha, also welcomes the boost to the local economy. While the turbines are coming from GE's wind power works in Germany, the blades will be provided by LM Glasfiber's Chinese factory at Tianjin. Towers and other components will come from domestic companies, including some located in Xinjiang.

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