Wind Power

04 Aug 2020

251GW New Chinese Wind Expected this Decade

04 Aug 2020  by RE News   

China is expected to add 251GW of new wind capacity between 2020 and 2029 but additions will take a 16% hit from next year due to the end of subsidies, according to Wood Mackenzie.

The country’s wind power market could reach a cumulative grid connected capacity of 461GW by the end of the decade, WoodMac added, with more than 25 wind bases totalling over 100GW of capacity planned or under construction to support near-term wind growth.

The analyst is expecting a rush to connect projects this year but sees the 16% year-on-year decline next year once new rules come into place.

In the long run, falling levelised cost of electricity (LCOE) is expected to drive capacity additions.

Wood Mackenzie senior consultant Xiaoyang Li said coronavirus had impacted 10% of new capacity additions in 2020, adding: “the bigger challenge for wind developers is the looming deadline for the termination of national subsidies by the end of the year”.

“The combined impact from coronavirus and the rush to install new wind capacity before the end of subsidies, could cause the LCOE for wind to rise 8% to 472RMB per megawatt-hour in 2020 compared to 2019.

“This will prevent onshore wind from meeting the government’s target for grid parity in 2021.”

“The termination of subsidies could depress the market and hurt developer profitability in the short term.”

In the longer term, China’s wind market is expected to face greater competition from solar power.

Solar installations have undergone substantial growth since 2015 and will exceed wind in terms of cumulative capacity by the end of 2020.

Competition between solar and wind will intensify post 2026 when both wind and solar costs fall below coal-fired power, particularly in provinces with abundant wind and solar resources, the analyst added.

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