China to become the largest offshore wind power producer by 2022
November 20, 2018 Category China News Round-up, Weekly
China is poised to overtake Germany and the UK as the world’s largest offshore wind power producer by 2022, but it needs foreign know-how to cut costs and boost competitiveness, according to the CEO of the Global Wind Energy Council. “We think the best way for China to achieve that is to have foreign participation to enable the transfer of best practices in the European market,” said Chief Executive Ben Blackwell.
Cost reduction is crucial to the nascent industry’s growth because from January 1, all large-scale wind farm development rights allocation in China will be subject to power price competitive bidding, with the power price commanding a 40% weighting in a developer’s competitiveness assessment. This will effectively end subsidies to developers via higher guaranteed power prices that have been in place for a decade. Blackwell said Chinese developers could learn from their European peers, especially in the more technologically challenging deep water areas and avoid the “steep learning curve and mistakes” they made along the way. The Council is backed by 1,500 equipment manufacturers, project developers, parts suppliers, financiers, power distributors and research members from over 80 nations.
Global offshore wind power generation capacity could grow to 129 gigawatt (GW) in 2030 from 17.6 GW last year – an average rate of 16%, and China would overtake the UK’s cumulative installation by 2022, Bloomberg New Energy Finance has forecast. China’s offshore capacity stood at 2.8 GW last year, trailing Germany’s 5.4 GW and the UK’s 6.8 GW, according to the Council. In the overall market covering both on and offshore, China’s 188 GW was more than double the 89 GW of the United States, the No 2 market, the South China Morning Post reports.
So far, China’s wind power market is dominated by state-backed energy giants, and few foreign firms have won project development rights in the highly capital-intensive and cost competitive market. But a round table discussion during last month’s China Wind Power exhibition and conference in Beijing signaled an interest in the idea of the Chinese industry tapping into foreign expertise to speed up development. Foreign firms are not barred from China’s wind power industry, but they face challenges in obtaining project site information and local financing, and forming joint ventures with Chinese firms is the preferred market entry approach, said Qiao Liming, the Council’s China Director.
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