IPP | Karen Mesina, Japan

The flip side of the coin: China's overwhelming wind growth conceals a lurking challenge

Transmission issues have been begging for a solution.

The first renewable energy law in China dates back to 2006 and there has been tremendous wind energy installation improvement including its capacity and scale. The number of manufacturers has also been impressive since then.

Fast forward to 2015, China installed about 30GW in a single year and over the years, the growth of the industry has been amazing.

"One concrete proof of this is the unstoppable growth of gagabases," Weiping Pan, vice president of R&D at Xinjiang Goldwind Science & Technology Co., said in a talk at the World Smart Energy Week 2016. Gagabases are wind farm clusters with over 10GW capacity. "Right now, China has approved around 10GW gaga wind bases."

One of the biggest industrial effects of the law in 2006 according to Pan is that the trend in the Chinese market due to large scale development caused a significant cost reduction starting in 2006. "Even wind turbine prices have been dramatically reduced over the past 10 years."

Industry consolidation is also a very apparent effect due to competition, product, and technology advancement. "I remember that 8 to 9 years ago, there were around 70 or more active players in the wind market, and now the number of Chinese OEMs has been reduced to just about 20," Pan recalled.

He added that with technology improvement, wind turbine production has been very competitive and the increase of availability has been overwhelming. Although the Chinese wind manufacturing industry is relatively young compared to global counterparts, turbines that are "made in China" has been brought to almost 13 countries already .

"Another reality I want to mention is the growth of the value chain across the wind industry from developer to turbine OEMs to EPC contractors to third party certification groups that support the renewable energy industry including wind," Pan explained. "After years of development, offshore wind power in China is ready to take off. It was in 2007 when the first offshore wind power was finally commissioned, now, just planning offshore wind power capacity already reaches 10GW."

Given these overwhelming effects of the Renewable Energy Law passed almost a decade ago, what are the challenges that have sprouted since then?

Pan pointed out that transmission has been a big gaping pothole along the way. "The main load requirement is mostly concentrated in the east coast of China, but the large bases have been constructed and developed in the western and norhtern west coast. As everyone has expected, there were issues on coast advantage, transmission line, investment, losses, and land economics."

Another main issue in renewable energy is that subisidies are gradually reduced. "What makes it worse is that it is a worldwide trend--that is the reality," Pan revealed. 

He also predicted that in the future, the wind LCoE will become competitive due to improved generating efficiency and cost reduction. "Efficiency optimisation process will be accelerated by adopting Internet of Things and "big data," which will enable total efficiency of wind farm projects to increase by 10-15% by 2020. The scale of wind energy appplication will be continuously expanded through application of energy storage technologhy in wind energy and application of battery technology in RE."

The World Smart Energy Week is currently on-going until March 4, 2016 at Tokyo, Japan. The event gathers renowned experts of the smart and renewable energy business fields from across Japan and the world who will share the latest technology and industry trends. 

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