Around 25% of the capacity was installed in the northeast province of Liaoning in three new wind farms. The provinces of Shandong, Xinjiang and Inner Mongolia respectively installed 19.3 MW, 13.8 MW and 12.8 MW. The year was also significant for Heilongjiang, Shanghai and Ningxia, all of which generated green electricity from local wind farms for the first time.
The year's development has altered the wind capacity distribution map, with Inner Mongolia and Guangdong swapping places as the nation's third and fourth largest wind power players. In terms of total installed capacity, Liaoning continues to top the provincial list with 126.46 MW, followed by Xinjiang with 103.45 MW; Inner Mongolia, 89.14 MW; and Guangdong, 86.48 MW.
China's Goldwind, the local partner of Germany's Repower, is continuing its rise in the ranks of leading turbine suppliers in the country, installing 42 machines with a combined capacity of 25.5 MW. It was only just pipped at the winning post by Denmark's Vestas, which took pole position as the leading turbine supplier for the year, with 34 of its machines providing 27 MW. The 2002 market leader, Nordex of Germany, was relegated to third position with 16 turbines installed providing 17.3 MW (table).
Last year's record level of development is expected to be superseded in the coming years as the country begins construction of its first 100 MW wind farms (Windpower Monthly, January 2004). Indeed, projects under development or already approved mean China's wind generation is likely to exceed the national target of 1000 MW by the end of 2005. This year alone, around 240 MW is forecast for delivery, says Shi Pengfei of CHECGC, taking the country's total to just over 800 MW.
China Longyuan Electric Power Group Corporation -- the biggest wind power player in China -- has 60 MW of wind plant scheduled for installation this year. It controls almost half the country's wind capacity after inheriting the wind power assets of the now defunct State Power Corporation. Other projects likely to be launched this year include two 50 MW wind farms at Dacheng Island, Zhejiang and Bamianshan of Hunan. Also Fujian has announced plans for four projects with a combined capacity of 120 MW, while Guangdong is preparing for 90 MW from three additional wind plants.
Furthermore, the National Development and Reform Commission (NDRC) wants to speed up the country's wind development in a bid to meet the government's recently revised target for 4000 MW of wind by 2010 and 20,000 MW by 2020. To that end, NDRC has called on all provincial governments to submit (within two or three years) proposals for a further series of 100 MW wind farms. "Among the new energies, wind power is most likely to develop into a big industry," notes Shi Lishan of NDRC's Renewable Energy and Rural Power Division.
Concern about pricing of wind power is rife. Keen to ensure a reasonable financial footing for wind power, NDRC is handling the tendering process for the 100 MW projects itself. Significantly, it is inviting companies of diversified ownership to bid for projects. Tendering for the first two 100 MW developments was completed last year, but the results were controversial.
The fixed prices quoted by winning bidders for Huilai Wind Farm in Guangdong Province and Rudong Wind Farm in Jiangsu Province are too low, many analysts say (Windpower Monthly, January 2004). In the case of Rudong, the CNY 0.43/kWh rate ($0.052/kWh) was below the local average price for all forms of electricity. The company behind the bid -- Huarui Group, a private sector energy developer based in Beijing -- admits the wind farm will probably run at a loss. These losses will be absorbed internally with the help of the group's other business undertakings, sources with Huarui add.
"This sends a wrong message," says Chen Heping of China Huaneng Group, the biggest power company in the country. "It's very damaging to the development of this young industry." Shi says this is not necessarily the case. The prices quoted by other bidders for the Rudong project were close to Huarui's bid -- around CNY 0.6-0.7/kWh. That points to a reasonable price level for the reference of future wind projects in the region, suggests Shi.
NDRC is certainly content and is expected to issue tenders for three more 100 MW projects this year. Likely candidates are the second phase project of Rudong Wind Farm, an expansion of Huitengxile Wind Farm in Inner Mongolia, and a project in north-east China's Jilin.
Companies wanting to develop smaller projects are expected to have to rely on local government initiatives and support. In recent years, NDRC has approved few smaller scale wind farms and is believed to want to focus on the 100 MW developments in the next year. This effective transfer of power of approval, though done in a tacit manner, has raised the role of provincial governments to pivotal importance. "That makes sense," one analyst says. "The reform has urged grid companies to operate on a regional basis. The higher-than-average cost of wind power is expected to be spread province-wide."
With China having suffered acute power shortages in the past year -- a trend not expected to change until 2006 -- demand for new power projects is strong. The bulk of new build will focus on hydropower, fossil fuel and nuclear generation. It is, say industry observers, unrealistic to expect wind power to make any substantial contribution to satisfying the nationwide demand. Indeed, some potential wind investors have already turned to other forms of generation instead, notes one.
The situation may improve, however. A new law to promote renewable energy development is being drafted -- two versions are being prepared, one by a group of scholars at Tsinghua University and the other by officials at the NDRC's Energy Bureau. The first draft is due at later this year. Shi, who sits on the advisory board of the drafting commission, says the draft should be ready for a vote by the National People's Congress in March 2006, at the earliest.