China’s wind energy industry growing exponentially

China’s wind power output rose more than 60 percent to 18.8 billion kilowatt-hours in the first quarter of 2011, growing 30 percent to 50 percent faster than the output of thermal power, hydropower and nuclear power in the same period, according to information from the National Energy Administration.

Shi Lishan, director of the New and Renewable Energy Department of the National Energy Administration, said that the significant increase in the wind farm output in the first quarter exemplifies China’s flourishing wind power industry. The country’s total installed wind farm capacity doubled for five consecutive years since 2005.

The number increased by 16 million kilowatts to nearly 42 million kilowatts from 2005 to 2010, making China the largest wind power generator in the world. In addition, the installed capacity of China’s grid-connected wind power plants amounted to 31 million kilowatts at the end of last year, Shi said

The construction of many 10-million-kilowatt wind farm projects is well under way in Gansu’s Jiuquan, eastern and western Inner Mongolia, northeastern provinces, Hebei Province, Xinjiang Uyghur Autonomous Region, Jiangsu Province and Shandong Province. The installed capacity of the two wind turbines bases in western Inner Mongolia and Jiuquan both exceeded 5 GW. The installed wind power capacity exceeded 2.5 million kilowatts in Hebei, Jilin and many other provinces.

The 100,000-kilowatt Donghai Bridge Wind Farm, the first offshore wind farm located outside of Europe, started producing and transmitting power to the grid during the Shanghai World Expo. Shortly afterwards, a 1-milion-kilowatt offshore wind power concession project was launched in Jiangsu Province. China’s total wind power output reached 45 billion kilowatt-hours in 2010, up 63 percent from the previous year.

Governmental support is a key contributor to the rapid development of China’s wind power industry. During the 11th Five-Year Plan period (2006-1010), China introduced a series of laws, supporting policies and detailed plans, such as the "Renewable Energy Law," "Notice Concerning Certain Requirements for Wind Farm Construction Management" and "Medium and Long-term Renewable Energy Development Plan," creating a favorable legal and policy environment for the long-term development of wind energy.

China’s wind power industry now focuses on the research and development as well as commercial application of advanced wind power generation technology. Start-up wind energy companies in China enjoy complete exemption from corporation tax in the first three years, a reduced corporation tax rate of 50 percent in the second three years, an immediate 50 percent value-added tax rebate and other preferential policies. Based on the benchmark electricity price set by the central government, certain provinces such as Shandong and Guangdong have offered subsidies to wind power projects, making the on-grid wind power price in these provinces higher than the national benchmark.

The rapid development of wind power owes its success to the "equipment first" strategy. Statistics show that 90 percent of the total installed wind power equipment in China was imported from foreign countries in 2004, while in 2010, Chinese-made equipment accounted for 90 percent of the total wind power equipment in China. More than 10 wind power equipment manufacturing enterprises realized large-scale production along with the development of the domestic wind power market.

Seven Chinese wind power equipment manufacturing enterprises such as the Sinovel Wind Group Company and the Goldwind Science and Technology Company have edged themselves into the top-15 wind power equipment manufacturing enterprises worldwide, and the Sinovel Wind Group Company even ranks second worldwide.

After many years of technology accumulation and capital investment, China’s production level of wind power equipment has continuously improved and technological challenges, such as the production of megawatt-level wind turbines and offshore wind turbines, were overcome one after another.

"Currently, Chinese enterprises can produce all kinds of wind power equipment components," said Tao Gang, vice president of the Sinovel Wind Group Company.

The localization of wind power equipment is driving the rapid improvement of the wind power technological capability and the operational quality in China. Currently, China’s wind turbine generators commonly adopt mainstream world technologies, and the world’s leading 3 megawatt turbines and offshore wind power projects are also located in China. The cost per kilowatt has been reduced from about 7,000 yuan during the early part of the 11th Five-Year Plan period to less than 4,000 yuan, a decline of 40 percent.

Wind power has also developed quickly thanks to the market-oriented operation mode. Before 2005, China’s wind power was mainly driven by power sectors without market competition, and the electrovalence was high and the development was slow. China developed a total of 49 wind power station projects through five concession project biddings in recent years and achieved a total of 8.8 million kilowatts of gross installed capacity.

The wind power market-oriented operation mechanism attracted a lot of capital in the field of wind turbine manufacture and achieved full competition among wind turbine manufacturers in terms of technology, quality and cost control. It also promoted the rapid improvement of wind power technology and management in China.

The National Development and Reform Commission issued the wind-power four-level benchmarking electrovalence in accordance with resource statuses of various regions in 2009. This has improved the accuracy of investors’ judgments on the economic feasibility of wind power station construction projects.