China’s energy market watchdog has issued a new set of rules that makes wind energy curtailment a top priority.
The National Energy Administration has set out guidelines in a notice for new wind power projects, requiring guarantees for grid connection capacity and power-purchase agreements to be in place, as it aims to reduce wind energy curtailment to no more than 5 percent.
China, the world’s largest wind market with 168GW of wind power capacity installed as at end March, has seen aggressive growth in wind installation in recent years – net additions of 15GW in 2017, 17GW in 2016 and nearly 35GW in 2015, according to statistics from the NEA and the International Renewable Energy Agency.
However, geographical mismatch between power supply and consumption, a lack of sufficient cross-regional transmission capacity and delays in payments by local authorities have left many renewable energy projects sitting idle.
The average curtailment rate of wind power stood at 8.5 percent as at March this year, compared with 17 percent and 11.8 percent in 2016 and 2017, respectively. However, according to statistics from the NEA, some provinces were still experiencing high curtailment rates last year, as high as 33 percent in Gansu, 29 percent in Xinjiang, and 21 percent in Jilin.
In a bid to further alleviate wind curtailment, the energy watchdog is requiring local authorities to submit proposals to the NEA that will outline their plans for connecting the wind power produced to the grid this year, building on guidelines issued in March and last November.
Also, to control the pace of wind installation in the country, beginning in 2019 new large-scale onshore and offshore wind projects will be subject to a competitive tender process. Instead of the current feed-in-tariff regime, those competing for the development of new projects will have to submit bids that are lower than the reference tariff set by the government.
Distributed wind will be exempt from the competitive bidding process, NEA noted.
Raymond Fung, chief executive of CGN Private Equity, expects China’s renewables model to change significantly in the next three to five years.
Not only does the Chinese government want to have less wind-generated electricity abandoned, but it is also encouraging projects that do not need government subsidies. Priority will go to cross-regional projects, facilities that power nearby industrial areas and plants built on unused and untaxed land, NEA said.
The energy regulator had not responded to queries seeking further comments at the time of publication.
As at end March, China had 666GW of renewable power generation capacity installed, accounting for 36.9 percent of its total energy mix, according to the NEA.