China boosts offshore wind energy

Some industry analysts expressed pessimism concerning the offshore wind power sector in China as the industry has experienced slow progress with only 39 MW in installed capacity added last year, a year-on-year decline of 69 per cent.

However, the China National Renewable Energy Centre (CNREC) said that a number of new offshore wind farms are scheduled to kick off within this year, including the 100-MW Phase II expansion project of Donghai Bridge in Shanghai and China Longyuan Power Group’ (Longyuan) Nanri Island project already under construction in Fujian province.

Two projects are also under contruction in Jiangsu province: China General Nuclear Power Group’s new offshore project in Rudong on track to start construction in the second half of this year and Longyuan’s windmill project in Dafeng.

In early 2014, the National Energy Administration (NEA) issued a Notice on Developing Offshore Wind Power Projects selecting Shanghai as well as Fujian and Zhejiang provinces as the locations for the country’s key pilot construction projects for offshore wind power.

The Shanghai government announced in early May new initiatives to boost support for its new and renewable energy sectors, providing subsidies of 0.1 yuan per kWh for onshore wind power projects and 0.2 yuan per kWh for offshore wind farms. However, some industry analysts expressed concerns about the impact of regional subsidies on the nationwide feed-in tariff for offshore wind projects.

The rapid growth of the Chinese offshore wind power sector requires a rational and clear tariff structure, allowing offshore wind farm developers to have realistic expectations of what the return on their offshore wind power investments should be and in turn, boost the development of the whole sector, according to analysts.

The NEA and the pricing department of the National Development and Reform Commission (NDRC) have been in ongoing discussions concerning the tariff rates for offshore wind farms and expect to issue the rates within this year.

An industry expert at NDRC indicated that the combined capacity of approved offshore wind farms in China, including intertidal projects, has exceeded 4,000 MW. The combined capacity of offshore wind projects scheduled to start construction by 2015 will exceed 300 MW, according to data from CNREC.

The US Department of Energy (DOE) said in early May that it will allocate up to $141 million to three pioneering offshore wind demonstration projects over the next four years to help speed up the deployment of more efficient offshore wind power technologies. Benefiting from the support for offshore wind projects in the US, Fishermen’s Energy’s 25MW offshore windmill backed by Xiangtan Electric Manufacturing, a China-based electrical equipment manufacturer, won a US$4 million grant from the DOE, subject to regulatory approvals.