China to be world's third-largest windpower producer

China will become the world's third- biggest producer of electricity from wind by the year-end as it taps more renewable sources of energy and reduces the use of polluting coal, a government official said.
The country's windpower capacity will reach 20,000 MW this year, Shi Lishan, deputy director of new energy at the National Energy Administration, said. In 2004, the capacity was 764 MW, Shi said.

The world's largest polluting nation burns coal to produce about 80 % of its power and wants at least 15 % of its energy to come from renewable sources by 2020. China Longyuan Power Group Corp., the nation's biggest windpower producer, may spend about yuan 18 bn ($ 2.6 bn) a year to add at least 2,000 MW of capacity annually within the next few years, Chairman Zhu Yongpeng said on Dec. 18.
"In the longer term, if China has the commitment, then wind power can be quite viable," Gordon Kwan, head of energy research at Mirae Asset Securities, said by telephone from Hong Kong. "The outlook for the industry would be very, very bright because the government appears to be behind it."

China is developing windpower generators that can produce as much as 5 MW each, Shi said. By contrast, in 2003, it couldn't even assemble all the components, he said. Still, the country depends on foreign expertise for design and development and locally made parts "haven't matched international standards," Shi said.
Tempe, Arizona-based First Solar Inc. and Copenhagen-based Vestas Wind Systems, the world's biggest maker of wind turbines, are among companies expanding in China.

Evolving industry
Global windpower capacity reached 121,188 MW last year, according to the World Wind Energy Report 2008. The US's windpower capacity was the biggest with 25,170 MW, followed by Germany with 23,903 MW, and Spain with 16,740 MW, said the World Wind Energy Association, which published the report.
China had 12,210 MW of windpower capacity, more than doubling from 2007, the association said. The country was the world's No. 4 in capacity last year.

"Our windpower industry has evolved over the last few years," Shi said. "We will see a big improvement in the next three to five years."
China National Offshore Oil Corp. ventured into wind power for the first time as the Beijing-based company started operations at its 49.5-MW wind farm in Inner Mongolia province this month, the country's largest offshore oil producer said on Dec. 22.

Government regulations
The National People's Congress, China's legislature, approved on Dec. 26 new rules compelling grid operators to buy power generated from renewable sources including solar, wind and geothermal energy.
China will offer tax breaks, set up a new national renewable energy development fund and issue preferential loans to encourage the growth of the renewables industry, according to a text of an amendment to the country's renewable energy law. The legislation left specific pricing details, such as the level of renewable energy feed-in tariff rates, to be set by administrative agencies.

"There would initially be some teething problems because wind power is quite unstable," Kwan said.
"If there's no wind, the grid could go down as a result of lack of power. There are also uncertainties in downstream pricing, so it's going to take some trials and experiments in order to resolve these issues."