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l(f)r(sh)g:2020-03-26 (li)Դ: ժ c(din)
While the answer to Chinas clean energy efforts might just be blowing in the wind, a wide range of obstacles lie ahead
Poyanghu Lake in Jiangxi Province is a lake that holds deep mystery for locals. Since the 1960s, more than 100 ships have inexplicably sunk in its murky waters. The only conclusion, baffled experts can think of, is that the strong winds, caused by air currents being squeezed through mountains surrounding the lake, are the cause of the tragedies.
Today the southeastern province is making the most of its most damaging natural resource, with plans to develop wind power this year, and turn the Poyanghu area into an optimum zone of development.
Jiangxi is one of the inland provinces with the least primary energy reserves. Its coal coffers only account for 0.137 percent of the countrys total, about two thirds of its non-renewable resources are transported from other provinces and its exploitable hydropower resources are only 1.5 percent of the countrys total.
In the past decade, in order to meet its high-energy demands caused by economic development, Jiangxi has intensified energy development as well as drawing power from the Three Gorges Dam. But authorities are looking toward a more diverse energy supply and have set their sights on harnessing wind power. Its economical, clean and renewable and developers believe its costs will decline.
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China has abundant wind power resources and the potential is great, said Xie Changjun, President of China Longyuan Electric Power Co. Most of the countrys wind power resources are distributed in grasslands and the Gobi deserts of the north, northwest and northeast, as well as coastal areas and islands in the east and southeast. These areas are short of coal and other regular energy.
According to Wu Guihui, Deputy Director of the Energy Bureau of the National Development and Reform Commission (NDRC), current wind power resources have reached 1 billion kw, of which 253 million kw are generated on land and the other 750 million kw at sea.
In recent years, the installed capacity of wind power has increased rapidly, surpassing 1 million kw in 2005. According to the Mid and Long Term Program of Renewable Energy Development, which is tentatively drafted by the NDRC, in the following five years, China will increase its wind power capacity by 3.3 million kw. This would push the total installed capacity to an expected 4 million kw in 2010, 10 million kw in 2015 and 30 million kw by 2020.
There is potential
Zhang Guobao, Vice Chairman of the NDRC, believes the country is well placed to develop wind power while promoting the advancement of renewable energy technology, such as wind power and solar electric power.
At the end of December 2005, the NDRC approved 18 applications for funding demonstration projects of renewable energy and new energy hi-tech industries. It allocated nearly 100 million yuan to support these projects, indicating that the country is committed to this direction. One of the main priorities of the five-year plan of related government departments is to develop new energy. Clean energy, such as wind and hydropower, is seen as the most realistic choice to solve the countrys energy problems. In the process, wind power has moved from a supplementary energy of little consequence to an emerging industry with strong commercial prospects.
Renewable energy accounts for about 10 percent of the total energy supply of developed countries, yet the proportion is only 1 percent in China. To improve this, the Chinese Government is encouraging multi-channel financing to develop this sector. The government also understands that although foreign technology is vital to wind power development, domestic technological innovation must drive this operation.
The NDRC issued a circular on August 10, 2005 on the management of wind power construction, regulating the standards of wind power construction and electricity prices of wind power. Before that, the Ministry of Finance and the State Taxation Administration jointly issued a document to levy only half of value-added taxes on wind power generation enterprises.
According to Zhuang Laiyou, Chief Economist and Director of the Large Corporate Lending Department of China Development Bank (CDB), in countries with good wind power development, the governments had preferential policies designed to launch wind power, which largely promoted development of this industry. China can learn much from these experiences, he said. The preferential policies include subsidies to wind power equipment manufacturers and wind power investors, reduction or remission of production taxes after the power plants are put into operation and subsidizing power generation. Related departments in China are drawing up similar policies.
Financial support
Besides preferential policies, wind power also obtained financial support from government departments such as the CDB. For example, since the beginning of 2005, the CDB has committed about 3.6 billion yuan of loans to 10 wind power plant projects such as China Longyuan Electric Power Group Corp., China Energy Conservation Investment Corp. and Huaneng New Energy and Environment Protection Co. Ltd., involving a total of 686,200 kw in installed capacity.
To develop Chinas wind power, we must extend the scope of individual projects and the overall scope of the wind power market, while investing and financing mechanisms to develop wind power projects should be established and competitive systems introduced to price the projects, said Wang Jixue from the New Energy Division of China Hydropower and Water Resources Planning and Design Institute. The Chinese Government has formulated a lot of policies to encourage development of wind power, but to guarantee the implementation of these policies, we need new market mechanisms and more perfect legal environment, Wang added.
The Law on Renewable Energies has been effective since January 1, 2006, providing preferential industrial policies in forms of law. Related policies and laws will be publicized in sequence and planning of renewable energies has been reported to the State Council and will be released soon, said Xu Dingming, Director of the Energy Bureau of the NDRC. NDRCs Vice Chairman Zhang, also disclosed that the number of laws and regulations related to renewable energies may reach 12 and these laws and regulations will be drawn up by the NDRC, the Ministry of Finance and the General Administration of Quality Supervision, Inspection and Quarantine, respectively.
State-owned enterprises once played a dominant role in the development of new energy and many private enterprises could participate only by means of buying shares. Now the NDRC has issued management measures on wind power chartered right projects, including establishment, construction and investment of wind power projects. The threshold to new energy projects like wind power is reduced step by step to private capital.
Wind power chartered rights are different from franchise operations in general business. Wind power chartered rights combine state-owned capital and private capital, in which corporations bear the commercial risks of projects and the government bears the risk of policy changes. With these chartered rights, mineral resources owned by the state can be exploited, and the construction of public infrastructure projects can be undertaken under government supervision.
Some experts believe that as new energy industries have a high demand for technology requirements, but require comparatively small start-up capital, private enterprises have quite good prospects, with their advantages in flexible systems and market awareness. On January 13, 112 private enterprises in Chinas new energy industries set up the Chamber of New Energies of All-China Federation of Industry and Commerce. According to Li Hejun, chairman of the chamber, they will comply with international practices and substantively promote the development of Chinas new energy enterprises and domestic new energy industries. The chamber plans to increase its membership by 300 enterprises within three years.
Wind blockage?
Wang Zhongying, one of the draftsmen of the Law on Renewable Energies and Director of the New Energy Development Center under the NDRC, said much more work needs to be done to reach the target of wind power capacity by 2020. Although China started wind power generation 20 years ago, it still lags far behind the levels of wind power industries of Europe, the United States and even India in terms of technologies and management, Wang added.
In Wangs opinion, the major obstacle blocking development of the wind power industry is that China lacks qualified technical personnel and advanced technologies. This means little wind power generation equipment can be made in China. In the past, China was hesitant about what kind of wind power equipment to develop, so it mainly established small operation units to back up large grids. Many other countries, however, have developed high megawatt operations merged into large grids. This leads to the fact that 82 percent of Chinese wind power equipment is imported. While other countries are generating sets of megawatts which have been the mainstream in the world, such equipment is just under development in China.
Wind power units generating 4.5 megawatts were developed in 2004, yet China just finished research of wind power units of only 1 megawatt in November the same year.
Besides technologies, costs and pricing are also influencing the development of wind power. Xin Jianfeng, Director of the Department of Planning and Investment of Jiangxi Power, pointed out that costs of wind power generation come mainly from fixed assets investment costs, which account for more than 85 percent of the total investment. One of the largest bottlenecks of wind power generation is the huge single investment, making the unit cost higher than that of hydropower and thermal power.
According to Shi Pengfei, Vice Director of the Chinese Wind Energy Association, the comparatively high prices of wind power are blocking its development. It is impossible for the developers to bear all the losses due to high electricity prices and they will inevitably shift those losses to the manufacturers of wind power equipment by asking for a reduction in the prices of equipment, squeezing profits from manufacturers, Shi said. Moreover, to enter into the wind power field, corporations must deal with a mountain of issues. For example, the life span of wind power equipment is generally around 20 years. During this period, the equipment will be operated around the clock, making some kinds of breakdown inevitable. Long-term maintenance of equipment is also a large burden.
In addition, in the actual development, wind power generation is also restricted by other factors. In Poyanghu, the area particularly suited for wind power generation is also protected environmental area, home to migratory birds and sensitive wetlands. Sea lanes also restrict the construction of wind power plants. Construction of wind power plants must consider factors like transportation routes, geological conditions, environmental protection and connection with large grids. Restrained by these factors, the actual generation of wind power will be comparatively low in our province, said Zheng Muchun, Chief of the Energy Division of the Jiangxi Development and Reform Commission.
Most experts deem that in theory, China has large volumes of wind power reserves, but the huge market and weak industrial base expose the need for efforts to be made in the strategic, technological, management and policy making areas.
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