Wind Power in China - A Study of the Chinese Distributed Market through the Example of Guandong Province

Abstract: In 2010 China became the country using the largest amount of energy in the world, and alsothe country with the largest installed wind capacity in the world. Due to the insufficientelectricity grid China has started looking into the so called distributed wind power market.Distributed wind power projects are small-scale projects closer to the demand centres, whichtypically utilize existing grid infrastructure, and they cannot exceed 50 MW. This report looksinto the fundamental drivers on the Chinese wind power market and analyses the expecteddevelopment of the distributed wind power market in China. The report also studies theprovince of Guangdong to determine if it is feasible to sell current turbine models on thedistributed market for the price a potential customer is willing to pay, as well as looking intoturbine trends that are suitable for the distributed wind power market. Finally the competitionbetween international and Chinese turbine manufacturers is analysed.It has been found that the main drivers on the Chinese wind power market are the politicalregulations and restrictions in response to the pollution issues and growing energy demand inChina. The insufficient electricity grid is the main reason for the development of thedistributed market, which also implies that the lifetime of the distributed wind power marketwill be dependent on the pace of development of the Chinese electricity grid.The result of the Guangdong study shows that at an average wind speed of above 6.62 m/s allthe turbine models in the study can be sold at the current market price, and at an average windspeed of 5.66 m/s only 1.8 V100 can be sold at the current average market price. These resultsshow that for a wind power project to be profitable on the distributed market in theGuangdong province the average wind speed has to exceed 5.7 m/s if the wind farm developeris using the most suitable turbines for the wind farm.The trends for turbine design that have been identified as the most suitable on the distributedmarket are larger rotor diameters and smaller turbine sizes (turbines of a size up to 2.0 MW).A price gap of 27 per cent between wind turbines sold by international manufacturers andChinese manufacturers has also been identified. This price gap indicates that it is of interestalso for international turbine manufacturers to sell their turbines on the distributed windpower market.