China's Wind Energy Potential Appears Vast

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According to a new study from the environmental group Greenpeace, China's rapidly growing southern province of Guangdong could support 20 gigawatts (GW) of wind generating capacity by 2020, providing as much as 35,000 gigawatt-hours (GWh) of clean electricity annually, the equivalent of 17 percent of Guangdong's total current demand. The study, released October 17, is based on the best available wind resource data from Stanford University, the United Nations Environment Programme, and other organizations.

The Guandong report provides further confirmation that wind is one of China's most abundant energy resources. So far, the Chinese government has set a target of 20 GW of total wind power by 2020, compared with the current world installed capacity of 55 GW. According to estimates by the China Meteorological Administration, proven wind energy reserves in China total as much as 3,200 GW. The northeast, northwest, and southeastern seaboard are the areas with the richest wind resources. Usable onshore wind resources could provide 253 GW of electric capacity, while offshore resources could provide three times that much. By comparison, China's total installed power generating capacity from all sources is just 460 GW, according to statistics from the China Federation of Power Enterprises.

Recognizing this enormous potential, China has stepped-up efforts to develop its wind power industry. The government has set up wind concession projects to lure investment and expertise, a key element of the country's current wind power policy. According to Li Junfeng, director of the Chinese Renewable Energy Industry Association, China's installed wind power capacity reached 760 MW (0.76 GW) by the end of 2004, with 43 wind farms in operation. Guangdong Province, with an installed capacity of 86 MW, accounted for one-ninth of that. Wind power costs have decreased at an annual rate of 15 percent in recent years, with the average grid price falling from 0.8 yuan/kWh (US 6.4 cents) to 0.6 yuan/kWh (US 4.8 cents).

Given the expected wind energy boom in China, investors have set their sights on the sector. Interested parties include the "Big Five" power companies (Huaneng, Datang, Huadian, Guodian and Zhongdiantou), other private firms, and several provincial energy investors. Even companies like China Guangdong Nuclear Power are paying attention to wind power, according to Li Junfeng. In August 2005, Guohua Energy Investment Company established China's first offshore wind power plant, with an installed capacity of 1 GW. Companies from Spain, Germany, and the United States have made large investments in wind power in cities like Beijing and in Jiangsu, Guangdong, Shandong, and Inner Mongolia Provinces.

Even so, in 2004 just 560,000 kWh (0.56 GWh) of electricity were generated from wind in China, accounting for only 0.01 percent of the country's total electricity generation—a low percentage relative to European and world figures. Domestic producers lack technical know-how and rely heavily on imported technologies, resulting in high production costs for construction of wind power plants. According to Chris Flavin, president of Worldwatch Institute, most of China's wind projects to date have been one-off projects funded by the government and international agencies. To encourage private investment in wind power, Flavin recommends that the government set a sufficiently high but still reasonable grid price for wind-generated electricity, with the goal of expanding the market and lowering the cost of wind energy—as Germany has done over the past decade. China's new renewable energy law, which becomes effective in January 2006, will guarantee a fixed grid price for power generated from wind energy, and Chinese wind experts expect it to accelerate development of the country's wind power industry.

At the global level, declining costs as well as strong government policies in several countries have contributed to rapid growth in the wind industry. Global sales of wind power equipment exceeded $10 billion in 2004, up from $7 billion in 2002, according to Worldwatch Institute Senior Researcher Janet Sawin. The industry already employs over 100,000 people worldwide, and Germany alone expects to have more than 100,000 wind jobs by 2010, reports Sawin in Vital Signs 2005. As more wind turbines spin in China in the near future, the wind industry there is expected to provide thousands of jobs, and the large-scale production of turbines will lower input costs, eventually bringing down costs worldwide.