It blamed poor wind resources and a high base from last year.
China Longyuan Power (Longyuan), the state's largest listed wind farm operator, reported a 15.4% YoY drop in China wind power generation in July, pushing down the growth of the 7-month wind power generation in China to 0.9% YoY from 3.1% YoY in 1H2019. Overall wind power generation (including Canada & South Africa) experienced 14.7% YoY drop in July.
According to UOB Kay Hian, Longyuan attributed the weak wind power generation to weak wind resources in July and a high base last year. Moreover, other renewable power generation increased 10.9% YoY in 7M2019 whilst thermal power generation declined 3.4% YoY.
Only one wind power project was added in the first half of 2019, and it was grid connected by end of June, noted UOBKH analyst Shen Zhifeng. "We estimate a flat wind utilisation hour in 1H2019 compared to that in 1H2018, and a 2.0% YoY drop for wind utilisation hour in 7M2019," Shen said.
Longyuan said its wind curtailment rate was at around 5% in 7M2019, almost same as 5% in Q1. Specifically, the company’s wind curtailment rate in northeast China has dropped to a low level at 1-2%, but remained at a high level of 10-15% in Gansu, and 15-20% in Xinjiang.
"We think that Longyuan will be able to successfully push its curtailment rate below 5% in 2019," Shen commented.
The company also reiterated that the low end of its annual wind capacity addition target of 1.2GW can be achieved in 2019. "Whilst these new wind farms would contribute a limited additional power generation in 2019, they would make full contribution in 2020."
Longyuan is expected to build wind farms with a total capacity of 2GW for the rest of the year.
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