China Prepares for Shift in Wind Power Policy

China’s new five-year plan on wind power will stress policy adjustment, that is, maintenance of policy stability, rather than on installed capacity expansion and grid connection targets, said Li Peng, deputy director of the New Energy Department of the National Energy Administration. The priority is to solve the problem of "wind farm suspension to reduce power generation", give funding support to the industry, ensure that wind power companies can make reasonable profits, and coordinate the operation of electricity systems and the implementation of power industry reform policies.

It is almost a foregone conclusion that the installed capacity of wind power will increase during the 13th Five-Year Plan period (2016-2020). The market estimates that the capacity expansion target would be set at about 250 million kw. According to Li Peng, the government is still studying the relevant targets, tariffs and policy measures and nothing has yet been finalised. The lower limit of the planned targets is that capacity expansion should not be lower than the annual market expansion during the 12th Five-Year Plan period (19.81 million kw in 2014). No upper limit will be set for areas without power generation reduction targets.

"The wind farm suspension problem is a major factor holding back the development of wind power in China. There is no point talking about the development of this industry without effectively resolving this problem during the 13th Five-Year Plan period. Investment will only go down the drain if capacity expansion cannot lead to an increase in power generation," said Li Peng. He noted that problems of wind power consumption have more to do with balancing the interests than technology. "The wind power market capacity can reach 400 million kw if priority can be given to wind turbines in feeding power into the grids. If the existing dispatching mechanism and operation modes remain unchanged, even a 200 million kw target is too high. Market players should show greater concern for power dispatching rather than growth target," he said.

The areas that call for policy stability in the wind power industry during the 13th Five-Year Plan period are: Keeping the capacity expansion target below the annual market expansion during the 12th Five-Year Plan period; putting equal emphasis on centralisation and decentralisation in project distribution; and improving the price subsidy policy and promoting the full protection procurement system for renewable energy. The areas that call for active development include: Setting no upper limit for areas with sufficient capacity to consume (the electricity); promoting technological progress in order to reduce the production cost of wind power companies; and improving the operating environment of the wind power industry by further simplifying administrative procedures and coordinating the implementation of power industry reform policies.