China is seeing an economic slowdown that most nations would love. Its GDP rose by only 7.4% year-on-year in the first half of 2014. Well, it’s low when you’re used to 10% or more.
The slowdown is partly due to weak demand in overseas markets, and partly the structural imbalances in the Chinese economy. The response from China’s rulers has been to focus investment insectors that can keep growth on track. This is good news for wind.
Now, your view on the success of wind power in China relies on how you read the data. In terms of gigawatts it is clearly the world leader, with more than 91GW installed at the end of 2013. That is one-third more than its nearest rival, the US, which had 61GW.
But, when you drill down, you see that wind still only accounts for 3% of the country’s total energy needs, behind coal (80%) and hydro (14%). Wind farm operators continue to face problems with curtailment and transmission as the grid has struggled to keep up with the scale of wind development.
Now the government is stepping up efforts to find solutions. This isn’t just to help the wind sector. It is a key part of China’s bid to ensure stable growth.
We need only look at the half-year financial reports of some major Chinese manufacturers, published over the last two weeks, to see that there are encouraging signs of progress. The best starting point is Goldwind’s review of Chinese policy moves in its half-year results, out last week.
In April, the country’s National Energy Administration (NEA) issued a notice that proposed each region and city should target a steady increase of the ratio of clean energy in their energy mix; and should ensure they prioritise the dispatch and purchase of green energy.
The NEA followed this in May when it published proposed new laws on air pollution, alongside the National Development & Reform Commission (NRDC) and Ministry of Environment Protection of China. It said China must accelerate efforts to control air pollution by building more clean energy; and set a target that China must have 150GW of wind power by 2017.
And, in June, the NRDC published details of feed-in tariffs for offshore wind farms.
The NEA is also proposing to build 12 dedicated trans-regional wind power transmission lines to help increase the purchase of power from remote sources, including wind farms. Meanwhile, the China Electricity Council wants to expedite the fast construction of new transmission lines from areas with lots of wind farms.
There was also interesting reading in Longyuan Power’s half-year results, published last week, which reported that wind farms totalling 4.4GW were added in the first half of 2014; and total power produced by wind grew 12% over the same period.
This shows that there continues to be steady growth in the Chinese wind sector, even with the economy slowing. And, with these new announcements, we expect this to continue to 2017 and beyond.
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