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China Plans 6GW of Subsidy-Free Wind in Mongolia

China Plans 6GW of Subsidy-Free Wind in Mongolia

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A massive wind complex will help power the 2022 Winter Olympics.

China is planning a 6-gigawatt subsidy-free wind complex to help power the 2022 Winter Olympic Games, according to China’s State Power Investment Corporation.

The Ulanqab Municipal Development and Reform Commission approved the first phase of the ¥42.5 billion ($6.3 billion) project, which was given planning approval in March last year, at a meeting held late December.

“After the project is put into production, it could deliver about 18.9 billion kilowatt-hours of green electricity to the Beijing-Tianjin-Hebei region every year to help air pollution control in Beijing and the surrounding areas,” said the State Power Investment Corporation (SPIC) in a press announcement this month.

The Ulanqab Wind Power Base will spread over an area of almost 1,500 square miles in Siziwangqi, Inner Mongolia. “This is currently the largest single onshore wind power base in the world,” claimed SPIC.

China energy experts pointed out that the term ‘”wind power base” is more akin to a portfolio than a single project, however. The 6 gigawatts of capacity would likely be split into separate projects of between 100 megawatts to 200 megawatts each, said Xiaoyang Li, a senior consultant at Wood Mackenzie. “I would not regard the base as a single wind farm,” she said.

SPIC has not released further details of the Ulanqab build-out program, and Li said plans are still at “a very preliminary stage.”

No turbine supplier has yet been announced, for example, although Li said most Chinese Tier 1 equipment manufacturers would probably benefit from the project. And beyond commissioning in time for the 2022 Winter Olympics, little is known of the timeframe for construction of the wind base.

However, SPIC could be planning to build the base before the end of 2020 to take advantage of the current regulatory regime for onshore wind, said Feng Zhao, an independent wind energy analyst.

Chinese authorities have made it clear that the conditions for renewable energy development will be reviewed after 2020, he said, which could affect the profitability of the wind base. “They need to get this done within two years,” he said.

As it stands, said WoodMac’s Xiaoyang Li, power from the wind base will be paid at the same rate as nearby coal generation. Nevertheless, it seems likely the base will benefit from a recently announced battery of measures designed to encourage subsidy-free renewables.

These incentives include 20-year power-purchase agreements, a waiver of local content requirements and a guaranteed grid connection. The latter could be vital for the Ulanqab Wind Power Base project, since a lack of grid capacity has forced significant levels of wind energy curtailment across Inner Mongolia in the past.

In 2016, China’s National Energy Administration (NEA) suspended approval of new wind power projects in six northern regions, including Inner Mongolia, to avoid excessive curtailment.

Chinese wind farm operators lost ¥28.4 billion ($4.2 billion at today’s rates) to curtailment that year, forcing the NEA to introduce a risk warning mechanism that it now uses to assess whether renewable projects can go ahead in a given location.

Li said there is still no ultra-high-voltage transmission infrastructure connected to Ulanqab, but added that this is being planned by the NEA and SPIC along with the state grid company and local government.

China’s eagerness to sign off on the Ulanqab Wind Power Base and its accompanying grid infrastructure signals a growing willingness to shun traditional power sources in favor of renewables.

Since 2016, the Chinese government has been rationalizing plans to halt development of new coal-fired plants, with around 150 gigawatts of capacity now delayed until after 2020, said Li.

Plans for new nuclear plants were also delayed in 2017 and 2018, Li said, as an initial batch of third-generation reactors have run over schedule and over budget.

At the same time, wind and solar have emerged as an increasingly fast and cost-effective way to secure new generation capacity. “We believe both coal-fired and nuclear power will slow down in the next couple of years,” which is in sharp contrast to renewables, said Li.

“Carbon mitigation and concerns around polluting fossil fuels are important drivers to push for a higher penetration of renewables,” she added.

Source: greentechmedia
Anand Gupta Editor - EQ Int'l Media Network

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