They appeared to have won the debate in September when the State Council, China’s Cabinet, approved a document from the National Development and Reform Commission (NDRC) and nine other ministries, stipulating the NDRC would hold back funding or approval for projects in industries with production overcapacity.
Wind energy could supply all of China’s 2030 electricity demand if the country overhauls its grids and raises the subsidy for wind energy, according to researchers from Harvard and Tsinghua Universities. Their analysis, published in the journal Science in September, said that achieving this goal would require increasing wind contract prices from the current US$0.059 per kilowatthour to $0.076 per kilowatthour.
Coal still supplies most of China’s electricity. Rather than increase carbon dioxide emissions by 3.5 gigatons each year through 2030, as current policies would allow, the study determined that wind energy could replace 640 gigawatts (GW) of coal-fired power. The switch would cut emissions by 30 percent and require an investment of some $900 billion.
Inner Mongolia, Xinjiang, Gansu, and Tibet provinces hold large potential for wind energy. But high-voltage transmission lines are needed to connect these sparsely populated regions in the north and west with consumers in China’s more-developed east. Meanwhile, a lack of grid capacity has limited wind energy’s ability to reach customers, according to the Global Wind Energy Council.
Wind energy was among the industries listed. But the "over-capacity of production" charge is untrue, argued Qin Haiyan, secretary-general of China Wind Energy Association (CWEA).
"The production overcapacity, as widely reported in the media or calculated by some government agencies, is based on the development programs of many enterprises. It is open to question whether these capacities will be realized," said Qin.
"I strongly oppose the policy of restricting businesses from other manufacturing sectors from entering the wind power sector. And I strongly oppose leading enterprises lobbying the government to restrict the development of the industry on the excuse of excess capacity."
The country has more than 80 wind turbine producers, double the number in 2004, as well as about 50 wind turbine blade producers and nearly 100 tower producers.
"The output of the top three plants, turbines producing about 1million kilowatts annually each, is only about a third of the capacity of western giants Vestas, GE and Gamesa," said Qin.
The debate comes in the run-up to the Wind Power Asia Exhibition and Conference (WPA) in June next year. More than 50 foreign businesses have booked booths, accounting for about one half of the total reservations, said David Feng, managing director of Koelnmesse Co., Ltd., the organizer.
WPA 2010, to be held at China National Convention Center in Beijing, near the Bird’s Nest, or the Olympic Stadium, is expected to attract more than 500 exhibitors, including the Danish Wind Energy Group, the Association of Technology Transfer of the Netherlands, the Energy Supply Chain from Spain, and the Korea International Trade Association, and about 18,000 industry visitors.
Asia’s largest wind energy event, the WPA has been held six times since its debut in 2003. A total of 15,065 industry visitors from 43 countries thronged the aisles to see 445 exhibitors at WPA2009 in July, an increase of 50 percent from WPA 2008.
Li Ye, director of the Energy Conservation, Science, Technology and Equipment Department of National Energy Administration (NEA), said in late October, "Among the 80 plants, about 30 never produced any wind turbines previously. Many others made a few sample wind turbines, but fewer than 10 each. Fewer than 10 plants ever produced more than 100 turbines. Only three suppliers — China’s top three wind turbine manufacturers Sinovel, Goldwind and Dongfang Electric — produced more than 1,000 turbines each. It’s ridiculous."
Before 2004, China’s wind power industry was almost non-existent. Its total installed capacity of wind power has grown about 20-fold from 764 MW in 2004 to 15,850 MW by September 2009.
By the end of 2008, China’s total wind power installed capacity was the fourth largest in the world after the United States, Germany and Spain. The newly increased installed capacity was the second largest, after the United States.
However, China relies on coal to generate about 70 percent of electric power, which means prospect for the wind energy sector are good.
China is expected to have 120 GW to 150 GW kilowatts of installed wind power capacity, totaling 7 to 9 percent of the national total installed electricity capacity, in 2020, according to the China Energy and Environment Technology Association (CEETA).
China harnesses mountain wind power
Wind power has become a major priority for the Chinese government as they try to reduce the amount of electricity produced by coal power plants.
In the mountains above the southwestern Chinese town of Dali, dozens of new wind turbines dot the landscape — a symbol of the country’s sky-high ambitions for clean, green energy.
At an altitude of 3,000 metres (9,800 feet), Dali Zhemoshan is the highest wind farm in China, where renewable energy has become a priority for a government keen to reduce its carbon emissions and which has taken full advantage of the global trade in carbon credits.
"Wind resources in Yunnan province are not the best in the country," says Zhai Cheng, a project manager at the farm for the Chinese group Sinohydro.
"But at altitude, it becomes more interesting," he adds, gesturing at the line of 48 metre-high turbines.
China, which relies on coal for more than 70 percent of its energy, is the world’s largest emitter of the greenhouse gases blamed for global warming.
But it has set a target of generating 15 percent of its energy from renewable sources — mainly wind and water — by 2020.
In Yunnan, the wind turbines — which operate at full tilt between October and April — are there to boost the region’s enormous hydroelectric power resources when productivity falls during the winter months.
"China is redoubling its efforts, with the 2020 target for wind power generation rising from 30 to 100 gigawatts," said Zhai.
The rapid boom in wind farming in China — where installed capacity doubled in 2008 for the fourth year running to sit at 12.2 gigawatts — places it behind only the United States, Germany and Spain.
"In terms of the scale and the pace of the build-up of the Chinese wind industry, it’s without parallel anywhere in the world ever," said Steve Sawyer, secretary general of the Global Wind Energy Council (GWEC).
"They went from very little installed capacity and almost no industry five years ago to the point where they will be the number one market in the world this year" in terms of new capacity, he said.
"At the current rate, they will be the number one in the world in cumulative capacity by the end of 2011, early 2012," Sawyer predicted.
As well as major wind farms in the north of China, such as those in Gansu province, smaller projects — like the one in Dali — are multiplying, almost always relying on the Clean Development Mechanism (CDM).
The CDM, which was created as part of the Kyoto Protocol, allows industrialised countries to fulfil part of their greenhouse gas reduction commitments by investing in clean energy technology in developing countries.
With a generating capacity of 30.75 megawatts, the 41 turbines in Dali produce the same amount of energy as the burning of 20,000 tonnes of coal — thereby preventing the emission of 50,000 tonnes of carbon dioxide per year.
The carbon credits produced by the Dali pilot project, funded with a 30-million-euro (45-million-dollar) loan from the French Development Agency, will be purchased by Dutch bank Rabobank, Zhai said.
Those credits should amount to between seven and eight percent of annual income, he added, predicting that the project should pay for itself in 10 to 15 years.
"The wind industry in China and India is one of the biggest success stories of the CDM," said GWEC’s Sawyer.
"The Chinese example is a very good example: the only way you can make use of the market mechanism is if you have very clear and effective policies and measures to support the industry at the same time."
The challenge for China now, he says, is one of quality.
"They have had this rapid build-up and now they have to focus on the quality rather than just the quantity. Grid extension and connection is one issue, the performance of the turbines themselves is another."