China Wind Power Approval Plan: 2011-2012
Lihui Xu, Jochen Alleyne
Since the "12th Five-Year Plan" (2011-2015) released by the Chinese government, the National Development and Reform Commission (NDRC) has implemented the wind power approval plan in batches to regulate the development schedule and quality of wind power in China. Because the approved plan on the list is a preliminary job agreed to by the National Energy Administration (NEA) for deploying wind power development, some hot issues like the projects size and the approval progress have become the focus of attention by the industry stakeholders.
Wind Power Approval Plan in 2011
On July 2011, the NEA issued the first batch of the approved wind power project plan arrangements. A total capacity of 60 GW (gigawatt) of wind power projects applied for approval at the beginning, but the NEA actually only approved 26.83 GW in 29 provinces, autonomous regions and municipalities.
The projects in the approved plan in 2011 mainly focus on the “Three North” regions as shown in Figure 1. From the perspective of regional distribution, the region of North China has 8.55 GW which accounts for 31.9% of the nationwide scale, Northeast has 8.87 GW accounts for 33.1% and Northwest has 4.07 GW accounts for 15.2%. Also, East China has 1.76 GW, Central China has 1.48 GW and South China has 2.1 GW, which account for 6.6%, 5.5% and 7.8% of the nationwide scale respectively.
Figure 1. Regional distribution of wind power projects in 2011 approval plan
Wind Power Approval Plan in 2012
In 2012, the NDRC approved three types of wind power development projects with a total capacity of 28.28 GW. This included the second batch of wind power approval plans with 19.23 GW, the independent approved projects with 3 GW and the supplemented approval plan with 6.05 GW.
The second batch of the approval plan
On March 2012, the NEA issued the second batch of wind power approvals with 16.76 GW, including 14.92 GW of regular projects, 1 GW of demonstration projects and 0.837 GW of distributed projects. On July 2012, the NEA issued another second batch approval plan for the Xinjiang Autonomous region and Xinjiang Production and Construction Corps with 2.47 GW. So, the total capacity of the second batch of approval plan is now 19.23 GW.
The independent approved projects
On August 2012, the NEA separately approved the projects in Jiuquan wind power base with 3 GW in Gansu province, Damaoqi wind power base with 1.4 GW in Inner Mongolia and Xinjiang Hami in the southeast wind zone with 2 GW.
The supplemented approval plan
On July 2012, the NEA added a project in Yunnan province with 0.84 GW into the second batch of the wind power approval plan. On November 2012, the NEA continued to add another 112 projects as a supplement to the second batch for other provinces and autonomous regions with total 5.21 GW in Shanxi, Zhejiang and Anhui provinces.
From the perspective of regional distribution, the approved wind power projects are much more balanced in 2012 and the scale of approved wind power plans has been reduced, especially in the “Three North” regions. As shown in Figure 2, North China has 6.16 GW, Northeast has 1.16 GW, Northwest has 7.48 GW, which account for 21.8%, 4.1% and 26.5% respectively in the nationwide scale. And, East China has 3.83 GW, Central China has 4.39 GW and South China has 5.26 GW, which account for 13.5%, 15.5% and 18.6% respectively.
Figure 2. Regional distribution of wind power projects in 2012 approval plan
From the perspective of the nationwide scale, the total capacity of the projects approved in 2012 (28.27 GW) is roughly equal to 2011 (26.83 GW), although the approved batches in 2012 are more than in 2011. Overall, considering the total capacity of the connected grid, the installed capacity and the approved projects from 2011 to 2012, the national capacity of wind power development will reach 110 million kilowatts, which exceeds the 100 million kilowatts 2015 goal of the wind power development plan.
Table 1 2011-2012 Wind power approval plan (Unit: GW)
(Source: NEA of China)
Wind Power Approval Plan Outlook
The wind power approval plan is one of the national regulations for managing wind power development. For this reason, it needs to be kept closely in synch with national policies in order to protect the industry's orderly development at a macro level. It also should be a clear signal to the stakeholders at a micro level to promote wind power and accelerate the project construction, especially to implement conditions for grid access and market consumption.
At a macro level, the disorder in the development of wind power in some areas has been curbed by the wind power approval plans. However, the scale of an average of 27 GW per year in the approval plan is still high and brings severe challenge to the cross-regional grid planning and wind power consumption situation. In addition, by the way of releasing the approval plans in 2011 with one batch and in 2012 with two batches, the authority and effectiveness of the project management has been reduced.
At a micro level, the wind power approval plan is not only related to the interests of the equipment manufacturers, project developers and other stakeholders, but is closely related to the power grid planning and construction work. Currently, the overcapacity rate in China’s domestic wind power machine industry is more than 50 percent. The guiding role of the approval plan needs to be further strengthened by the Chinese government. Furthermore, due to the impact of slow power transmission channel construction, the currently approved wind power projects are difficult to implement.
All in all, the Chinese government should fully absorb the lessons learned from the development of wind power in recent years and maintain the approval plan with a balanced and orderly rhythm. Issuing plan approvals should take into account the local economic development and the relationship between the construction of power grids and the consumption market. This will help guide equipment manufacturers to set reasonable production capacity and avoid duplication of investment and waste of resources which will inspire developers to improve wind farm operations and management levels as well as promote scientific development in the wind power industry.
About SGT Research
SGT Research is a global market research and advisory firm serving the smart grid industry value chain including electric power infrastructure, renewable energy, clean technologies and capital investment. SGT Research provides strategic consulting services including analysis of market drivers, business models and technology trends for smart grid development. SGT Research also provides market entry services for smart grid firms seeking opportunities in China. With SGT Research’s local and international experience, clients will have added competitive advantages of bringing high-value products and services to the Chinese market faster.
SGT Research Insights.
- November 04, 2013
- March 01, 2013
- February 20, 2013
- February 11, 2013
- United Energy Capital Program