Workshop on Sustainable Energy

The Development and Perspective of China Wind Power

Li Junfeng Energy Research Institute & CREIA At DTU Campus Lyngby, Denmark January 14-15, 2009

Contents
National Wind Power Resource The Development of Wind Power The Influence of PRC Renewable Energy Law to Wind Power Development The Obstacles in Wind Power Development The Perspective of Wind Power Development The Proposals for Wind Power Development

National Wind Power Resource

GW
2,500

Land
2,000

Sea

2,000

1,500

1,400

There are discrepancy between different institutions for evaluation of wind power resource in methodology and results.

1,000 750 600 500 253 300 150 2nd Resource Census 3rd Resource Census UNEP Calculate CAS Geographical Institution Estimated by Ocean Scheme

It still indicates that the wind resource in China is abundant.

National Wind Power Resource

Onshore Resource
Theoretical reserves of more than 4,000GW above 10m height with technically exploitable reserve of 300GW. The practical development area is approximate 200,000 km2 Based on current technology, over 50m level, it requires 3-5 MW wind turbine to cover 1km2. With 200,000 km2 development land area available in China, the total installed onshore wind capacity can probably reach 600~ 1,000GW.

Offshore Resource
According to the China Coastal Zone and Tideland Resource Investigation Report, the sea area of 0-20m off coastline is around 157,000 km2 Assuming 10% to 20% of the total amount of sea surface used, the total offshore wind capacity can reach 100~200GW.

Conclusion
Abundant wind power resource in China Great development potential A key constituent in future energy structure

The Development of Wind Power Status

Wind Power Concession Projects

In order to scale up wind power industry, the government apply concession model and has approved four rounds of wind power concession projects with 35 projects (8,850MW) open for tender
The government select the winner though public tender, with lowest on grid tariff bidder likely to be awarded the contract. (In 2005, they revised the appraisal rules, in which the weight of tariff bided was reduced from 40% to 25% in 2006. The fifth round of tender in 2007 is further modified with the most close to average bidding price scoring highest ( both the highest and lowest tariff bidders are excluded). The duration of concession: 25 years Provincial power grid company needs to sign the off-take contract and purchase the entire electricity from wind power projects The price difference between conventional power and wind power will be allotted within the provincial grid. (allotted within national grid since 2006 ) The tariff structure is divided into two-phase with 30,000 operating hrs as the milestone.

Wind tariff in china

Provisions and Regulations in Wind Power

National Development and Reform Commission (NDRC) issued
Regulations on Power Generation from Renewable Energy Sources Renewable Power Generation Tariff and Cost Allotment Measure - Provisional Renewable Power Tariff Top-ups Administration Rules Renewable Energy Industry Development Guidance Catalogue Issued middle and long term renewable energy development goal Deployed wind resource census

Ministry of Finance issued

Renewable Energy Development Special Funds Interim Measures

State Electricity Regulatory Commission issued

Gridcos Mandatory Purchase of Renewable Energy Electricity Regulation

Other Policy Guidelines

Besides the above general development provisions and regulations for renewable energy, there are other specific notices in this field
The Requirements of Wind Power Construction and Management Notice The Implementation Guidelines to Promote Wind Power Industry Wind Power Plant Construction and the Environmental Protection Interim Measures State Grid Corporation Plant Access System Preparatory Work Management Approach

Wind Power Development: current status

Expanded Wind Power Market

Increasing Investment in Wind Power Strengthening Manufacture Capacity of Wind Power Equipments

Expanded Wind Power Market

No. 1 2 3 4 5 6 7 8 9 10 11 Total Region Inner Mongolia Jilin Hebei Liaoning Gansu Heilongjiang Shandong Ningxia Xinjiang Guangdong Jiangsu Units Units 1736 624 514 616 428 428 315 376 418 471 188 6500 MW 1585.5 628 531.2 509.3 408.1 376.1 369.2 346.2 297.6 296.7 296 No. 12 13 14 15 16 17 18 19 20 21 22 Region Fujian Beijing Zhejiang Shanghai Hubei Hainan Shanxi Henan Hunan Tianjin Hongkong Capacity Units 178 33 69 21 16 18 4 2 1 1 1 6.04 GW MW 233.8 50 47 29 14 8.7 5 3 1.7 1.5 0.8

Increasing Investment in Wind Power

Development of Wind Power Plant
On the rapid growth in last 5 years, wind power is second fastest growing capacity in North American and EU after CCGT. In China, wind power has attracted substantial investment by big power groups since 2006.
State-Owned Corporate: 5 National Power Gencos, China Shenhua Energy Company, China Yangtze Power.. These giant energy companies have all joined in the wind power development and compete for franchise projects. Provincial Corporate: many provincial energy investing or power generation companies, for instance Hebei Jiantou Energy Investment, Beijing Energy Investment Holding, Guangdong Yudean Group, and Guangdong Nuclear Power Group; Foreign Corporate: Australia Hydro Tasmania, CLP Holding Ltd., Hongkong Electric ,Ireland An Cui, Spanish Acciona Energia S.A.

Cheaper manufacture in China

Major suppliers in China

Gold Wind Xin Jiang Urumchi Sinovel Wind Liao Ning Da Lian Dong Fang Electric Si Chuan Mian Zu Ming Yang Electric Guang Dong Zhong Shan Hara XEMC Wind Power Hu Nan Xiang Tan Chong Qing Wind Power Equipment Chong Qing) Shanghai Electric Shanghai Zhejiang Windey Wind Generating Engineering Zhe Jiang Hang Zhou CRE Wind Liao Ning Sheng Yang Harbin Power He Long Jiang Harbin

Foreign Investment

Domestic Investment

Gamesa VestasGESuzlonRE PowerAccionaNordex SKFFAGLMXREB

There are currently more than 40 wind turbine generator manufacturers in China, including 4 foreigninvested enterprises , 7 joint-venture companies and over 20 domestic manufacturers.

Major suppliers in China

Production scaling is doing well and many large volumeproducers emerge, such as Gold Wind, Sinovel Wind, Dong Fang Electric, Zhejiang Windey Wind Generating Engineering; Several small capacity manufacturers are in trial production stage, such as Chong Qing Wind Power Equipment, CRE Wind ,Ming Yang Electric; Under R&D and prototyping stage: Shanghai Electric, Hara XEMC Wind Power, Harbin Power

Major suppliers in China

Domestic companies still lag behind in technology, production scale and market share, however, it takes off and shows rapid growth recently
In 2005, domestic wind turbine manufacturers took approximate 30% of domestic market share, over 90% of which was provided by Gold Wind (Xin Jiang) ; In 2006, the domestic producers market share was up 10% yoy to 41.2% (45% including the joint-venture companies. The largest domestic supplier Gold Wind saw its capacity rise sharply by three times than 2005; in 2007, Goldwind, Sinovel Wind, Dongfang Electric ranked as the first three In 2008 Sinovel, Goldwind and Dongfang Ranked the first three lage

Major suppliers in China

Nanjing High-speed Gear Box FactoryGear Box Chong Qing Gear BoxGear Box
Beijing Kono Albert Chan Electrical Technology Co., Ltd Electric Control System XJ Electric Co., LtdElectric Control System) Yongji Xinshisu Electric Equipment Co., Ltd Generator Lanzhou Electric CorporationGenerator Zhonghang (Baoding) Huiteng Wind Power Equipment Co., LtdRotor Blade Lianyungang Zhongfu Lianzhong Composites Group Co., Ltd Rotor Blade Tian Jing LM Rotor Blade Wafangdian Bearing Co., Ltd. (Bearings) Luoyang Bearing GroupBearings Zhejiang Tianma Bearing Co., Ltd Bearings

The Obstacles in Wind Power Development

Tariff Setting On-grid tariff of wind power are set by tender process.
No clear operation procedure Tariffs set too low as a result of bidding Irrational bidding behaviors by some developer who take land grabbing as the first priority

Grid Construction and Plan Grid construction and management lags behind wind power development
North, Northwest, Northeast Eastern Coastal Area

The code for wind power plant connecting to electricity grid is still not standardized Wind power construction is not synchronized with gird network construction plan

The Perspective of Wind Power FY2010

The newly installed wind capacity was 1,333MW in 2006, 3400 MW for 2007 and 5500 for 2008. The 10 GW target for 2010 has been reached. The domestic wind power equipment business has been established. The quality and class of products are improving. The production capacity is expanding. It is reasonable to expect a total accumulated installed capacity of 25-30 GW, even more in 2010, with a annual increased about 10 GW based on Chinas wind power equipment manufacturing capacity.

The Perspective of Wind Power -FY2020

Objective: total installed capacity of 2020 is amount to 80 to 150 GW; Compare to 28.3% of global wind power average growth rate in last decade
If the development of wind power industry goes well with installed capacity growing by 4GW p.a, or 25% CAGR, the total Installed wind capacity can reach 70 GW by 2015, If the development of wind power industry goes well with installed capacity growing by 15 GW p.a, the total Installed wind capacity can reach 150 GW by 2020 At that time, the wind power installed capacity will account for nearly 10% of total power capacity or 5 % output.

Development review of 2020

The Perspective of Wind Power FY2030

Wind power would become competitive to other source of power generating capacity on cost basis since 2020
If the annual capacity growth reach over 15GW, or 30% of national capacity added, the total accumulated installed capacity can reach 400 GW. At that time, the wind power installed capacity will account for over 20 % of total power capacity and meet 10 % of national power demand in China.

The Perspective of Wind Power FY2050

After 2030, most hydro power resource will be fully utilized. With attractive social and environmental benefit, the wind power will become the key component in power generating in China
If wind power capacity increases 15GW per annually, or 5~7% p.a, (GWEC estimated the global annual growth rate at roughly 2%), the total wind power installed capacity can reach to 600 GW in 2050; The wind power will be the third largest generating capacity after Thermal and Hydro power

The Perspective of Wind Power

Development Plan (Low) per year Capaci ty Year 2005 2006 2010 2015 2020 2030 2040 2050 GW 1.26 2.6 5 15 30 120 250 400 1.33 1.35 2.4 6.4 8 13 15 Increm ental GW per year Growth rate % 72% 105.0 % 17.8% 24.6% 14.9% 14.9% 7.6% 4.8% 2.6 10 30 70 180 300 450 1.85 4 8 11 12 15 105.0 % 40.0% 24.6% 18.5% 9.9% 5.2% 4.1% 2.6 25 75 150 300 450 600 5 10 15 15 15 15 105.0 % 76.1% 24.6% 14.9% 7.2% 4.1% 2.9% Capaci ty million kW Development Plan (Medium) per year Increm ental GW per year Growth rate % Capaci ty GW Development Plan (High) per year Increm ental GW per year Growth rate %

The Proposal for Wind Power Development

Improve Policy System Electricity Tariff Favorable Tax Treatment
Capital Investment

Grid Construction and Planning Enhance Management System Public Technology R&D Platform, etc

Large wind farm combine with distributed wind farm

Planned 6 large wind farms with 10 GW Small one all over the country, in 2008, about 25 regions with wind (total 34)

Thank You!
Tel: +86 10 63908465 Fax: +86 10 63908479 Email: lijunfeng@amr.gov.cn Website: www.creia.net