China's offshore wind market expected to grow to US$16 billion

Thursday, Feb 28, 2013

SHANGHAI, Feb. 27, 2013 /PRNewswire/ --Despite the considerable challenges and bottlenecks faced by China's offshore wind power market, the country's efforts in technologies for development of offshore wind power have remained strong. Thanks to years of coordination and cooperation between the government and domestic offshore wind power players, the first batch of offshore wind power license projects, most of which have been idle for more than two years, are likely to go online in 2013.

So far, Jiangsu, Shandong, Hebei, Zhejiang and Guangdong provinces as well as Shanghai have completed their planning for offshore wind power development. Liaoning, Fujian, Guangxi and Hainan provinces as well as the city of Dalian are currently finalizing their plans. Primary statistics confirm potential wind resources along China's coasts and waterways capable of producing 43 million kW in output. Preparations for 38 projects with designed combined capacity of 16.5 million kW in output are already under way.

In addition to technologies and difficulties in construction, offshore wind power development is still subject to two decisive factors, namely a well-designed and implemented management system and government policies governing electricity prices. Considering the heavy investments needed for and the high risks surrounding offshore wind power development, as well as must-do improvements in technologies, in management and in the domestic pricing structure, how far can China's offshore wind power industry advance between now and 2015?

According to China's 12th Five-Year Renewable Energy Development Plan spanning 2011 to 2015, China's installed wind power capacity connected to the grid is on track to reach 100 million kW by 2015, including installed offshore wind power capacity of 5 million kW, while annual electricity generation is projected to exceed 190 billion kWh, resulting in a complete and internationally competitive industry chain for wind turbines manufacturing. By 2020, the country's combined installed grid-connected wind power capacity is expected to reach 200 million kW, including installed offshore wind power capacity of 30 million kW, while annual electricity generation is forecasted to surpass 390 billion kWh, making wind power a vital part of the grid in China.

Some industry analysts expressed concerns around the government's goal of reaching an installed offshore wind power capacity of 5 gigawatts by 2015. Yi Yuechun, deputy general engineer at China's Design General Institute of Hydropower and Water Resources Planning, dismissed these concerns, saying that in addition to concession projects, several demonstration and other projects are on the verge of going live. All that is needed is for the government to be clear about its policies and for the preparatory work in process to come to a state of completion, and the sector should see a huge acceleration in the development of the industry.

In fact, China's energy authorities at the state level have had a change of perspective in terms of how to speed up the industry's development. The New Energy & Renewable Energy Department of the National Energy Administration said that they are already mulling over the release of long-term benchmark pricing for offshore wind-generated electricity, in a move to encourage more investment in the sector. In addition, companies meeting basic requirements can file an application with the National Energy Administration, which will shortcut the process leading to a successful application.

SOURCE Shanghai International Exhibition Co. Ltd.