Lowest bid price no longer deciding factor in 950 MW tender process for government contracts

Bids to develop four projects totalling 950 MW of wind capacity in China in the fifth round government concession contracts were due to have been submitted by the end November. To ease concerns following previous rounds that bids were being accepted purely based on the lower price offered, the National Development & Reform commission (NDRC) has ruled that the bidder offering a price closest to the median of all bids will have the greatest chance of winning a contract. "This may prove more reasonable as a rule," says China Wind Energy Association's Shi Pengfei. NDRC has also reducing the weighting of the price factor in bids from 40% to 25%. In addition, bidders can now form turbine supply agreements with up to three companies, rather than one, for any project, but this must still be done prior to bidding. "The new rule is more flexible," says one industry player. "It can reduce the risk developers must take in terms of availability, quality and cost of wind equipment." In the previous four rounds, development rights have been awarded for 11 wind farms with a combined capacity of 2450 MW, although only 850 MW of that has been built. The four projects on offer this year are: the 150 MW Weichang wind farm in Chengde, Hebei province; the 200 MW Changma wind farm in Yumen, Gansu province; and the 300 MW Wulanyiligen and 300 MW Kailu wind farms in Inner Mongolia. The winning bids are expected to be announced within the next two months. No concession contract has ever been won by a foreign developer and no foreign turbines chosen since 2004.