Renewable Energy in China Grid Connected Wind Power in China Since the invention of the modern wind China’s Wind Resources turbine generator (WTG) in 1891, China China has abundant wind energy resources. has recognized that wind energy technology China’s Academy of Meteorological Sciences offers an effective way to provide electricity to rural and isolated areas. The first Chinese estimates that the practical wind energy wind farm was located in Rongcheng of potential on the Chinese mainland is 235 GW Shandong Province in the northeast of (at a height of 10m). At an estimated China; by the end of 2003, 40 wind farms 23-29% capacity factor, annual poten- were operating nationwide, with the larg- est wind farms located in Dabancheng of tial production of electricity from wind Xinjiang Province, Nan’ao of Guangdong, power could be as great as 506-632 TWh. Donggang of Liaoning, and Huitengxile of Additionally, China has a large area of shal- Inner Mongolia. low sea along its eastern coastline, and pre- PIX10713, Credit: Jean Ku China’s installed wind capacity has grown liminary estimates show that the offshore Wind turbines at the from a mere four MW in 1990 to 567 MW wind energy potential may be three times Renewable Energy by the end of 2003 as a result of recent greater than onshore potential. This large Experiment and policy reforms, dedicated R&D initiatives, new financing mechanisms, and clear goals offshore area is especially promising for wind Demonstration Center in the most recent Five-Year Plans. In 1994, farm construction because offshore wind the former Ministry of Electric Power issued in Hohhot, Inner speed is higher and more stable than onshore Mongolia, China. a pioneering regulation on grid-connected wind farms. This regulation required provin- wind, and the potential wind sites are close to cial electric power authorities to give priority the main load centers of eastern China. to wind-generated electricity when purchas- ing energy. In 1999, with the approval of the State Council, the National Development and Reform Commission (NDRC) and the Ministry of Science & Technology (MOST) Policy and Market Development issued an official notice to further sup- With the Ride the Wind Program, NDRC port the development of renewable energy, initiated a market model of “demand cre- including a rule to set wind power pricing ated by the government, production by joint at a level that would repay capital cost with venture enterprise, and ordered competition interest plus a reasonable profit. in the market.” Wind farm projects approved by NDRC during the Ninth Five-Year Plan (1996-2000) required that WTG equipment Installed Capacity of Wind 20 GW purchased for these projects contain at least Power in China 567 MW 40% locally-made components. Under this program, several international and Chinese 468 companies capitalized on this requirement MW and formed joint venture companies for 399.3 MW 600 kW and 660 kW WTGS. (Note that the 344.3 NDRC was known as the State Development MW and Planning Commission, or SDPC, until 267.9 2003.) MW 223.5 MW Tax Incentives 166.6 MW In 2002, the Ministry of Finance and the State Duty Bureau implemented a new tax policy 56.6 that reduced the Value-Added Tax for wind 37.6 26.3 MW 4.1 14.5 17.1 MW generation from 17% to 8.5%. According to 4.9 MW MW MW MW MW the new tax policy, the average price for wind- 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 200220022002 2003 2020 generated electricity will decrease by $0.05- The installed capacity of wind power in China has grown 0.06/kWh and new wind farms are expected dramatically since the 1990s. As this figure shows, the to sell energy for as little as $0.06 installed wind capacity is expected to reach 20 GW by 2020. or even lower. NREL International Programs • www.nrel.gov/international Continues > Grid Connected Wind Power in China Wind Power Concessions the installation, operation and main- tenance of wind measurement systems In an effort to develop large-scale wind and data collection standards and codes. farms, effectively bringing down the cost In addition, the project is gathering on- of wind through competition, the Chinese site wind data at 10 locations using 40 government introduced a wind concessions meteorological towers. approach in late 2001. The basic concept of the Wind Power Concession is that the local government will invite international Research and and domestic investors to develop 100 MW Development Programs wind farms on a potential wind site, through In an effort to help Chinese WTG manufac- a tendering procedure aimed at bringing turers develop products and technologies, down the cost of wind-power generation. In MOST funded research to develop technolo- October 2003, two companies were selected gies for 600 kW WTGs during the Ninth through competitive bidding to develop Five-Year Plan (1996-2000). A prototype PIX10769, Credit: Jerry Bianchi Jerry Credit: PIX10769, the first large-scale wind concession proj- machine developed through this research ects in China. Hua Rui Company will be was approved at the national level, and was A tower maintenance the developer of 100 MW at Rudong in used successfully at a wind farm. Chinese mechanic from Rushan professional component manufacturers Jiangsu Province, while Guangdong Yuedian Electric Power Bureau Company will develop 100 MW at the Shi have produced key components of 600 kW Bei Shan site in Guangdong Province. Work WTGs, such as blades, gearboxes, genera- climbs a Bergey began in January 2004, with planning and tors, yawing systems, and control systems. Excel 10 kW wind construction scheduled for completion with- turbine to install in three years. 863 Wind Program—During the Tenth Five-Year Plan (2001-2005) MOST is sup- the meteorological Financing Programs porting R&D programs to develop mega- instruments. DOE/NREL watt-size wind turbines, including technolo- The State Economy & Trade Commission and the State Power gies for variable pitch rotors and variable (SETC) implemented the National Debt speed generators. Corporation of China Wind Power Program to use national debt (SPCC) developed this with favorable interest subsidy conditions to build wind farms with locally manufactured Contacts pilot project, using a turbines. By 2000, this program had estab- The National Renewable Energy Laboratory wind/diesel/battery China Web site lished four demonstration projects with a system, to electrify 120 total installed capacity of 73 MW. (Note: In www.nrel.gov/china government restructuring in Spring 2003, households on Xiao the renewable energy branch of SETC was The National Development & Reform Qing Dao island located Commission absorbed into the newly formed National in the Yellow Sea off Development and Reform Commission.) www.sdpc.gov.cn Shandong Province. Additional Programs The following fact sheets on renewable ■ The Wind Technology Partnership is a energy in China are available on the National bilateral program between the U.S. gov- Renewable Energy Laboratory’s China Web site ernment and NDRC to support devel- opment of the Chinese wind market, (www.nrel.gov/china). through market-relevant approaches that ■ WB/GEF Renewable Energy encourage private sector participation. The Development Project U.S. Environmental Protection Agency ■ Grid Connected Wind Power in China National Renewable and Department of Energy sponsor activi- ■ Renewable Energy Policy in China: Overview ties including developing an overall wind Energy Laboratory ■ Renewable Energy Policy in China: Financial strategy for China, evaluating under-per- 1617 Cole Boulevard Incentives forming wind farms, building capacity in Golden, Colorado 80401-3393 ■ wind developers, and addressing barriers Township Electrification Program 303-275-3000 • www.nrel.gov to wind farm development. Priority areas ■ China’s Plan for Renewable Energy include wind power concessions and the ■ Brightness Rural Electrification Program Operated for the U.S. Depart- new renewable energy law. ■ Renewable Energy Business Partnerships ment of Energy Office of Energy in China Efficiency and Renewable Energy ■ Through the Capacity Building for the These fact sheets were prepared by DOE/NREL by Midwest Research Institute • Rapid Commercialization of Renewable and the China Renewable Energy Industries Battelle Energy project, the United Nations Association under the US/China Protocol Development Project has been support- for Cooperation in the Fields of Energy NREL/FS-710-35789 • April 2004 ing efforts to remove barriers to wind Efficiency and Renewable Energy Technology farm commercialization by helping to Development and Utilization. Printed with biodegradable ink establish best practices and standards for on paper containing at least 50% wastepaper, including 20% post consumer waste. NREL International Programs • www.nrel.gov/international.