Also blocking wind's path is the country's bid-based pricing system, which the GWEC says is seriously hindering the market. Under the current regime, big state-owned power companies can bid well below realistic market prices, offsetting their losses with profits from coal-fired plants (a new one is registered every week). According to Worldwatch, for a series of projects in recent years, the winning bids ranged from 4.6 to 6.5 cents per kWh. According to one expert, the current average cost of wind power in China is between 6.3 and 8 cents per kWh; thus, all the projects authorized suffered a net loss.
"The price volatility and uncertainty caused by the current regulation harms foreign and domestic private manufacturers and developers, who are discouraged by a pricing pressure they cannot sustain," Arthouros Zervos, chairman of the Global Wind Energy Council (GWEC), said at a renewables conference in Beijing in early December.
In an October report, GWEC, the Chinese Renewable Energy Industries Association (CREIA) and Greenpeace called on the government to change the mechanism for wind power pricing to a fixed tariff system like that of Germany, which would mean the price is regulated directly by the government. The report also calls for more incentives for domestic and foreign investors.
During the 11th Five-Year Plan period (2006-2010), China will set up about 30 large wind power projects of 100 MW at regions with abundant wind power resources, such as eastern coastal areas, Hebei Province and Inner Mongolia Autonomous Region in north China.
In terms of small wind power projects, China has already developed the largest market in the world. By the end of 2005, China has installed 320,000 small wind turbine generators with a total capacity of 65,000 kw, supplying power to residents in remote areas...
Given the rising costs of oil and coal and the ever-increasing cost of global warming and pollution, China's attempt to beat western countries (not to mention India) at catching the wind faces stiff competition: but as long as the right reforms are made, China's wind investors and its citizens are facing a wind-wind situation no matter what.
Take note: The 2007 China International Wind Energy Exhibition And Symposium is this April in Shanghai