China's retreat from coal is no quick fix for wind curtailment

China’s recently announced plans to reduce coal-fired output will not have a significant impact on the severe problem of wind curtailment, according to industry analysts. 

The National Energy Administration (NEA) last week said it will scrap plans for 15 unapproved projects in nine provinces, while also vowing to slash production at massive coal-fired plants in the remote Xinjiang and Inner Mongolia regions.

The directives could clear roughly 12.4GW of potential capacity from China’s already congested grid. However, the government is primarily trying to balance overcapacity concerns against a desire to ensure the stability of coal-fired electricity supplies this winter. 

In other words, the provision of additional space on the national grid for renewables is not the objective, says Liming Qiao, China director of the Global Wind Energy Council (GWEC). She therefore does not expect any “direct effect on curtailment.”

Roughly 21% of China’s installed wind capacity failed to reach the grid in the first half of 2016. And while the government issued a series of policies earlier this year to increase utilisation hours — including specific renewable-energy purchase requirements for utilities — the problem of idled wind capacity is so complex that the curtailment rate will probably not start to significantly decline until at least 2019, according to MAKE Consulting.

This year’s annual wind capacity additions will likely fall short of the unprecedented 30.5GW that GWEC estimates was installed in 2015. However, MAKE still expects as much as 3.5GW of new capacity to not even achieve grid connection in 2016, out of 26GW of anticipated installations. 

China’s current 13th FIve-Year Plan further complicates the curtailment outlook, as cumulative installations are set hit to 250GW by the end of the decade, from somewhere in the range of 155GW-160GW at present. 

Shane Sun — head of APAC at MAKE — notes that the central government has been “trying” to cut coal-fired power production for more than a year now. But over the long term, the reduction of coal-fired output will not necessarily mean that more idled wind capacity will reach the grid.

“If we consider the consumption side, then reducing coal utilisation of course has a positive impact on wind every year, but the impact is very limited due to the severe oversupply of power,” he explains. “What we are in fact seeing is curtailment of wind, solar, hydro, coal, etc., across the board, arguably with coal being the least curtailed out of all.”