Conference Report China: Grid weakness hinders growth

As visitors swarmed through the doors of the exhibition hall at China Wind Power 2009, the leading turbine suppliers were ready to do battle for their business.

Throughout the China Wind Power 2009 conference, held October 21-23 in Beijing, delegates frequently blamed poor co-ordination in the expansion of the country's electricity transmission grid as a main cause for low profitability of wind projects. The national government's blueprint for grid expansion does not match plans at the local level, casting many projects into doubt and squeezing economic returns of projects that do go ahead, said Zhang Yuan, general manager of China's largest wind farm owner, state-owned Longyuan Electric Power Group. At the end of 2008, just 73.6% of installed wind capacity was connected to the grid (Windpower Monthly China Special Report, October 2009).

China has in fact taken bold steps since establishing its first wind interconnection code back in 2006. Chi Yongning, deputy chief engineer of renewable energy at the China Electric Power Research Institute, described a list of technical requirements now being worked into the country's grid code. These spell out how wind turbines are to be hooked to wires to improve the stability of the power supply and protect the turbines themselves, and are to include tests for grid-integration compliance at wind power plants. Chi expected final revisions to the code to be wrapped up within the next few months.

Meantime, China's annual investments in the grid this year and next, including new ultra-high-voltage transmission capacity, is equivalent to $85 billion, according to Beijing-based consultancy Azure International.

Sebastian Meyer, research director at Azure, said: "The idea of interconnected provincial grids is relatively recent." Eleven interconnections between isolated grids have been established but, in practice, little electricity is exported from one grid to another. Most traded cross-provincial power falls under a quota system that is unsuited to the variability of wind supply. Meyer said the development of a national level spot market for power - where prices that may be much higher than average on-grid power purchase rates are available - would benefit the industry, by boosting trade and by providing funds for new infrastructure. He suggested that the seeds of a nascent power spot market may lie in the real-time pricing system for coal already in place in China.

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