China Idles Fewer Wind Farms as Grid Connections Smoothed

Fewer of China’s wind turbines are idle after investments in new wind farms slowed and developments shifted to areas with better grid access, aiding operators such as China Longyuan Power Group Corp. (916)

The annual rate of China’s idled wind capacity may fall to 12 percent this year from 17 percent in 2012, Guo Yanheng, the deputy director of the National Renewable Energy Engineering Information Management Center, said in an interview. Ten percent of China’s wind power capacity was sitting unused in the first half of the year, 2 percentage points lower than a year ago, according to the center’s data.

Idled capacity has dogged China’s wind farm operators after a rush to build turbines in the windiest areas of the nation surpassed the grid’s ability to absorb and transmit the power. This year may be the first since 2010 that the rate of idled turbines has declined, according to the renewable energy center’s records.

“The entire industry is a little bit more matured than it was three or four years ago with wind operators actually considering not just wind speed and availability of land, but transmission capacity when they start to build,” Michael Parker, a Hong Kong-based analyst at Sanford C. Bernstein & Co., said by phone on Sept. 3. “There’s opportunity for a much larger portfolio of wind in China.”

The rate of curtailment, the term used to describe when wind farms produce at less than their generation capacity, may decline to the low single-digit level in 2015 as transmission capacity improves, said Parker.

Installations Slow

“That places the Chinese wind sector fully in the same kind of utilization range as the rest of the world,” he said.

The world’s biggest wind market slowed last year for the first time since at least 2004 and may install 13 gigawatts of turbines this year, 6 percent less than in 2012, according to London-based research company Bloomberg New Energy Finance.

China connected 4.8 gigawatts of wind power to grids in the first half, Guo said. The pace of connection may accelerate in the second half, he forecasts.

“The nation is approving projects in more proper areas and withdrew those where grids are unable to meet conditions,” Guo said.

China is investing 500 billion yuan to improve its grid system with plans to build a nationwide network of ultrahigh-voltage transmission lines, CLSA Asia-Pacific Markets analysts Charles Yonts and Matthew Li wrote in an Aug. 29 report. Leaving wind farms turned off costs operators at least 10.6 billion yuan ($1.73 billion) in lost revenue, almost double 2011’s figure, according to the renewable energy center.

 

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