China officially entered the zero-subsidy wind power era when its first project with no government support started operations on 24 August, deep in the Gobi Desert in the country’s northwest.
The 50MW Heiyazi project is the first to enter service of thirteen zero-subsidy demonstration wind farms in China, totaling 707MW and picked by the National Energy Administration in 2017.
The projects, located in five northern provinces in China, will sell their power at rates tracking local coal-fired prices and receive no tradeable green certificates for their electricity production. In return, they are guaranteed by the grid companies to purchase their entire output without curtailment.
At a construction cost of 5.7 yuan per kilowatt ($0.79/kW), the firm expects the project to yield 3,000 hours power production annually, “providing sizable economic returns”, it said in an official statement.
Heiyazi, sited in Yumeng, Gansu province, uses twenty turbines supplied by Shanghai Electric and is owned by the renewables branch of the country’s nuclear powerhouse, China National Nuclear Corp.
The zero-subsidy pilot scheme is set “to discover the prerequisite conditions for launching [wind power] grid parity in China, and to explore how to innovate technology and management, accordingly”, the China Wind Energy Association said when the scheme was unveiled.
However, the progress of the thirteen projects appears mired due to policy uncertainty. CNNC only started the construction of Heiyazi in March this year, while most others have yet to complete their procurement phases.
However, Beijing appears committed to pushing ahead the grid parity plan, approving another 4.51GW of no-subsidy wind projects this May, as well 14.78GW of solar stripped of support. The move may have spurred the development of the demonstrators, market commentators believe.
Lesser-known for its renewable portfolio, CNNC stepped into wind development in 2016. The firm owns a 1.4GW installed renewable portfolio of which 966MW is wind capacity.