China pushes wind power, but no quick payoff for producers

in.reuters.com
10 Sep 2012

• One-third of wind power capacity idle due to pricing, infrastructure
• Shares of Chinese power developers trading near record lows
• Government to require grid operators to buy minimum amount of renewable energy

HONG KONG, Sept 10 (Reuters)-China will order its dominant electricity distributors to source up to 15% of their power from renewable energy including wind, but slow compliance means it may be years before the country's struggling wind power developers benefit, industry executives say. The quota system will apply to State Grid Corp of China and China Southern Power Grid Co Ltd by the end of this year, the executives say.

China boasts the world's largest wind power capacity, but a third of it sits idle as renewable energy is a money-losing business for grid operators and network construction has lagged capacity expansion. As a result, China struggles to transmit electricity from generating zones in the northwest, north and northeast to population hubs in the south and east.

"With the roll-out of the quota system and acceleration of grid construction, the problem of distributors holding back on wind power purchases will ease", said Hu Yongsheng, president of China Datang Corp Renewable Power Co Ltd. But until China reforms a pricing policy that makes selling wind power and other renewables like solar power unprofitable, the country's powerful grid operators have little commercial incentive to follow the new quotas.

That means wind power developers such as China Long¥ Power Group Corp Ltd, Huaneng Renewables Corp Ltd, Datang Renewable and China Power International New Energy Development Co Ltd will continue to struggle. Chinese wind power developers posted worse-than-expected results for the first half of 2012, with grid operators increasingly reluctant to distribute the costly and unpredictable source of power amid a sharp economic downturn. Their shares are languishing near record lows.

"Renewables should boom in China in two to three years but not now", said Joseph Jacobelli, an independent energy analyst who was formerly head of global cleantech research at HSBC Holdings PLC. "The key barrier is the current tariff-setting mechanism gives no commercial incentive whatsoever to the grids to connect and dispatch renewables", Jacobelli said, adding that it would also take China several years to build ultra high-voltage lines needed to deliver the power produced at remote wind farms to users in the south and on the coast.

Grid operators buy wind power at government-dictated on-grid, or wholesale prices, of 0.51 0.61 ¥ ($0.08 $0.10) per kilowatt-hour (kW), while the prices of electricity purchased from coal-fired plants can be as low as 0.3 ¥. The government subsidises grid firms for selling renewable energy to help shift China away from polluting coal, but the subsidies are not enough for them to make a profit. China's waning power demand growth because of the economic slowdown has also reduced the subsidies, which are closely tied to electricity sales to consumers.

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Wind Power to dominate South Korea renewable energy efforts: KuicK Research

www.power-eng.com
8 Sep 2012

Delhi, India, (PR.com)--With the countries all over the world developing their wind power potential, South Korea has also joined the trend by initiating a massive wind power program that is expected to relieve the country of its huge fossil fuel imports that, currently, energize the country. South Korea has recently realized the vast wind reserves which has been given priority in the country's renewable energy revolution. A recently published research report by Kuick Research has pointed out that the country holds one of the world's largest wind resources with wind speeds in the higher limit.

The report details that South Korea has potential wind reserves of more than 340 TWh of which close to 100 TWh is onshore and a whopping 243 TW is offshore. This indicates towards huge offshore wind power potential that the administration has just beginning to tap. Another reason for the country to move offshore was because of the limited land available for wind farm development. The report gives detailed wind map studies with the wind speeds much faster than that required for power generation.

The feed-in tariff policy of the government has now been replaced by the Renewable Portfolio Standard. The research report points out the various reasons behind this reform one of which was the low revenue given to wind generated electricity as compared to solar and hydroelectric power.

The country is currently in the process of developing the world's largest offshore wind farm with capacity of 2.5 GW expected to be operational by 2019. A consortium of government and private companies being led by the Ministry of Knowledge Economy is developing this ambitious project that will catapult the country's wind power to levels at par with many countries in the world.

United Kingdom's RenewableUK has joined hands with the Korea Wind Energy Association to augment South Korea's efforts of wind power development through a 3 phase project called the UK-Korea Ocean Energy Technology Project, the first of which will be a detailed study of the country's offshore wind resources and the subsequent phases to be determined on the results of the study.

The research study shows that the government has already committed KRW 373.7 Billion in renewable energy development in 2012 and gives further details of this money being invested in various projects to help the country reach its target of including 10% power generated from renewable energy by 2022. The report also lists the various quotas of electricity produced by renewable sources of energy that will need to be included by the utility companies as part of the new Renewable Portfolio Standard policy.

South Korea heavy industry companies are augmenting the government's efforts by facilitating the availability of wind turbines by locally manufacturing them so that the companies do not have to import the equipment and the cost of wind power can be reduced. The report gives details of the wind turbine portfolio of all the companies involved.

The research report is a detailed text that emphasizes on the bright future of wind power in South Korea. It gives details to all the necessary facets required to bring about an organized wind power growth. The report details the targets and gives precise plans of the government to achieve these ambitious renewable energy targets and how exactly the country will go about the Low Carbon Green Growth Policy in the coming years to develop its most abundant resource.