Home Blog China Launches Differentiated Wind Energy Tariffs And Will Limit Us Chance

China Launches Differentiated Wind Energy Tariffs And Will Limit Us Chance

Release time : 2015-06-15 12:57:06
China has instituted a new system of differentiated wind energy tariffs based on four wind energy zones. The move is the first in Asia since South Korea implemented a feed-in tariff program in 2005. The planned feed-in remuneration lies between RMB 0.51 and RMB 0.61 per kilowatt hour and depends on the region where a project goes on grid. China is expected to announce feed-in tariffs for solar PV sometime later this year. Suntech chairman Zhengrong Shi as suggesting the tariff for large-scale solar PV plants could be equivalent to $0.22/kWh. Whether these tariffs also include access to state subsidies is unknown. Interfax-China reported that the average bidding price of Chinese made wind turbines has fallen by about 15% from July 2008 to July 2009. Wind energy-related products include designs, turbines, nacelles (housings for a turbine's inner workings), gearboxes, bearings and electrical equipment. General Electric, which opened a new wind turbine assembly plant in Shenyang in 2006, hopes to double its sales to China this year. GE Wind also has a joint venture with China-based A-Power to produce gearboxes in A-Power's Chinese factory in 2010. Canton, Ohio-based Timken Bearings expects to make $30 million this year selling US-made turbine gearbox bearings to Nanjing High Speed Gear Manufacturing Company. In a joint venture with Xiangtan Electric Manufacturing Company, Timken is also building a $38 million bearing plant in Hunan province, which will begin operating next year. China requires 70 percent of all wind energy components to be built domestically, either by foreign or Chinese companies. Chinese wind energy component buyers favor companies with Chinese owners, especially when the Chinese partner has majority interest. Historically, European countries have been - and still are - major suppliers of wind energy products to China. While GE is the only US Company making turbines in China, three European firms are doing so, and European manufacturers SKF and Schaeffler are the chief suppliers of bearings to China's wind energy industry. When American Superconductor first sought to make inroads into the Chinese market, it took an "if you can't beat 'em, join 'em" approach and purchased Austrian wind energy design firm Windtec. According to several experts, advances being made within China may also limit US chances there. Dozens of Chinese manufacturers, including Goldwind, Sinovel and Dongfang, are supplying most of China's wind turbines, and the country is moving ahead in its bearings and transmissions manufacturing. China's wind power sector gained momentum in recent years due to the government's supportive policies. Figures showed that the country's installed wind power capacity reached 12 million kW by the end of 2008, ranking the fourth globally trailing the United States, Germany and Spain. China is planning to build seven wind power complexes each with capacities of 10-gigawatts (GW) or more. The seven wind complexes have a planned total capacity of 126 GW and will be located in six provinces, including Gansu, Inner Mongolia, Xinjiang, Jilin, Hebei and Jiangsu, according to SHI Pengfei, Director of Wind Energy Specialty Commission of China Renewable Energy Industries Association (CREIA).