CHINA WIND

BusinessWeek offers the China Economic Review assessment of China’s wind energy industry. Conclusion? BOOM!

Facilitating economic growth is the first thing on the Chinese government’s agenda but Chinese leaders are not unaware of global climate change or that China’s emissions are the biggest in the world and growing worse. Seeing wind as cost competitive clean energy in sharp contrast to coal-fired dirty electricity, the National Development and Reform Commission (NDRC), China’s energy policy agency, is aiming to up the nation’s wind capacity by 4 gigawatts (4000 megawatts) in the next 4 years to 10 gigawatts (GW). China presently is 5th in the world in installed wind capacity, at just over 6 GW.

Booms come with growing pains. China is building wind so fast it has only been able to get 4 of its present 6 GW onto its grid.

Frank Haugwitz, New Energy researcher, Beijing: “[Wind energy] is coming like shockwaves…Sometimes it is less, sometimes more. This makes it difficult for the grid to absorb.”

Solution: New transmission must be built to regions where the wind is best and smart grids must be built where old transmission lines cannot effectively integrate wind. The Chinese reward for acting to achieve this solution? More boom.

Policy-driven growth is so big and so fast some big builders are losing money to meet government mandates. Qin Haiyan, secretary general, China Wind Energy Association. “Financials are not the main reason for them…Policy is the main reason. The conditions here are different from in Europe.”

As in the U.S., developers must face both federal and regional (provincial) regulators and do not relish the complications.

Gerald Page, CEO, Han Wind Energy, on trying to build a 50 megawatt Inner Mongolia project: “It’s not like other countries where you’re developing wind [and] you go through the same type of checklist…”

Ironically, regulatory complications – normally a bugaboo of wind developers – may effectively function to keep growth within manageable parameters.

Anecdotally, delays from regulatory complications are no longer than 6 months. Developers are buoyed by supportive federal attitudes and a virtually insatiable national appetite for energy. Sebastian Meyer, director, research firm Azure International: “Anything that’s installed will also usually be commissioned…It’s just a time thing.”

The benefits of the boom assuage complaints about difficulties with transmission and regulatory red tape. Steve Sawyer, secretary general of the Global Wind Energy Council: “At this point, there’s enormous demand, so the pie is big enough for everybody…”

For more details, see China Wind Power Report from Global Wind Energy Council (GWEC)

China is going to build a lot of New Energy. (click to enlarge)

Wind energy takes off in China; The wind is free and almost limitless in this huge, coal-dependent country, but harnessing its power for energy is more expensive
June 13, 2008 (China Economic Review via BusinessWeek)

WHO
The National Development and Reform Commission (NDRC), China’s energy policy agency; Longyuan Electric Power Group Corp (Chang Jun, general manager)

WHAT
As a result of governmental policies incentivizing new Energy development, the wind industry in China is booming.

Lot's of good wind in China. (click to enlarge)

WHEN
- 2005: China wind capacity was 1.3 GW. The Renewable Energy Law was eneacted, requiring grid operators to buy from New Energy sources. in 2005. The boom was on.
- 2006: The World Bank invested US$13 million for 11 GE Energy 1.5 megawatt turbines at the edge of a recreational park in Shanghai’s Nanhui district, one of the earliest wind energy installations in China and now rimming the China Wind Energy museum.
- 2010: NDRC wants China’s installed wind capacity to get to10GW.

WHERE
China’s big wind regions are along its coast and in its arid western and northeastern regions.

WHY
- Longyuan Electric Power Group Corp is China’s largest wind power developer.
- The wind market is dominated by 5 big powers.
- Estimated cost comparisons between coal-fired electricity, wind-powered electricity and solar energy-generated electricity vary. This article puts wind at twice the kilowatt-hour cost of coal and solar at five times the cost of coal.
- China presently gets 1% of its power from wind. It has the resources to get 10% by 2020. That would be 3.24 million kilowatt-hours.

GWEC projections. (click to enlarge)

QUOTES
- Richard Spencer, World Bank: “China is working very hard to reduce its dependence on coal…And it looks to nuclear, hydro and wind, particularly, to replace coal. Wind is very important.”
- Chang Jun, general manager, Chinese wind developer Longyuan Electric Power Group Corp: “We do meet some technical problems in connecting to the grid in some of our projects…We feel integrating wind power to the grid is critical for the commercial development of large-scale wind energy [in China].”