Hurdles Slow Down Wind Power Industry

Hurdles Slow Down Wind Power Industry

Apr 18 - China Daily; North American ed.

China's wind power industry is set to grow, but hurdles need to be cleared if it is to catch up with global players, say analysts.

Since the first wind farm was erected and connected to the grid in 1986 in East China's Shandong Province, China has built 61 such facilities, according to figures from Chinese Renewable Energy Industries Association.

The figure may have reached 80 by the end of last year, with installed wind power capacity amounting to 2,300 megawatts, making China the world's seventh-largest producer, said Chen Yicong, a wind energy industry analyst at Southwest Securities.

But impressive growth still pales in comparison with the country's potential, experts said at a recent industry forum in Shanghai.

China boasts a 1,000-gigawatt reserve of exploitable wind energy, of which 250 gigawatts are on land and 750 gigawatts offshore, according to Shi Pengfei from China Hydropower Consultants Ltd, a Beijing-based consultancy.

The installed wind power capacity only accounted for 0.38 percent of the country's total power generation capacity in 2005, according to Energy Research Institute, affiliated with the country's top economic policymaking agency National Development and Reform Commission.

It estimates that the proportion was still under 0.5 percent last year. In comparison, in Denmark, which has one of the world's most developed wind power industry, 20 percent of the installed power capacity comes from wind power. In India, the figure is 3 percent, according to Chen.

China is aiming to increase its wind power capacity to 30,000 megawatts by 2020, up from the previous goal of 20,000 megawatts, according to a blueprint issued in 2005 by the NDRC.

Many experts think the goal can be met much earlier if the major hurdles to wind power development are removed.

In addition to the natural limits associated with wind power generation such as the need for sparsely populated areas and the unstable nature of wind, which may affect the stability of the grid, there are other hindrances, said Chen.

"The costs of construction of wind farms in China are significantly higher than that of conventional power plants because of the exorbitant prices of imports," Chen said.

Wind power rates, therefore, are much higher than those of hydropower and coal- or gas-fired power, making investors less inclined to enter the market.

"The development of the wind power industry faces two uncertainties: one about the government's policy on wind power pricing and the other pertaining to the lack of order in the wind power market," said an official from Chinese Wind Energy Association, who declined to be named.

"The government has already issued relevant policies but it's not the specifics which make it hard to implement them," the official said.

Some experts say the lax implementation of relevant laws and regulations is another obstacle for the development of wind power and other alternative energy industries.

China's Renewable Energy Law came into force in 2006 but many say it has not been properly implemented.

Developing a home-grown wind power equipment industry, experts say, is also necessary for this alternative energy to take off. This industry in China is overwhelmingly dominated by foreign players.

Imported wind energy turbines and equipment accounted for 77 percent of the Chinese market in 2005, according to Chinese Wind Energy Association.

"We have to develop our own wind power equipment industry and the government should work out more effective and supportive industry policies in this regard," said the official from the wind energy association.

NDRC issued rules in 2005 requiring that at least 70 percent of wind power equipment must be provided by domestic manufactures.

World's leading wind power technology companies such as Denmark's Vestas and Spain's Gamesa are active players in the Chinese market, which is expected to be worth 130 billion yuan during the country's 11th Five-year Plan period alone (2006-2010).