Siemens AG

Abstract

The development of renewable energy has become a core component of energy transformation of all countries worldwide and an important way to deal with climate change. Due to China’s huge power demand, rapidly developing equipment manufacturing, and the national strategic guidance of green development, both the newly installed renewable energy and the accumulated capacity of renewable energy in China have ranked first in the world in recent years. In 2018, renewable energy power generation amounted to 1.87 trillion kWh, accounting for 26.7 % of total power generation, in which wind power was 366 billion kWh, accounting for 5.2% of total power generation, up four percentage points as compared with 2017. During the Twelfth Five-Year Plan period of China, wind power became the third largest power source after thermal power and hydropower. According to the Chinese Wind Power Development Plan during Thirteenth Five-Year Plan, the national annual generating capacity of wind power will reach 420 billion kWh by 2020, accounting for about 6% of the country's total power generating capacity, making wind power an important enabler to achieve the goal that non-fossil fuels in China’s primary energy consumption will take up 15% by 2020.

China’s wind power equipment manufacturing has been improved continuously with wind turbine costs reduced significantly. In a short period of time, China has rapidly developed into the world’s largest wind power market where both manufacturing and technology accumulation have achieved qualitative and quantitative breakthroughs. Wind turbines made in China has also started to enter the international markets. Alongside the rapid development of the Chinese wind energy market, however, curtailment of wind power had become a major issue that has not been effectively alleviated until the most recent years. In 2018, the rate of wind power curtailment dropped to 7%, an improvement of 5 percentage points year-on-year. With the promotion of the national "grid parity" policy and the global roll-out of wind power auction policies, it is foreseeable that in the next 2-3 years, renewable energy in China will achieve grid parity, and even become the most economical and reliable form of energy.

The development of renewable energy is indispensable from government policy support, including subsidies, which is a common phenomenon around the world. With grid parity approaching, gradual withdrawal of subsidies is a trend, but how to ensure that after the subsidy exits, the wind power market can continue to develop, the enterprises in the industry can develop healthily and sustainably, or mergers and acquisitions can take place in an orderly manner, all these affecting the confidence of the wind industry and enterprises in green development moving forward. In addition, the development of renewable energy is inseparable from market-oriented guidance in its real sense. At present, traditional energy still occupies the majority of the energy system of China. The implementation of renewable energy policy is not fully in line with market expectation, and policy implementations vary from one place to another. Therefore, a clear set of policy implementation details and an effective mechanism to supervise policy implementation are needed in order to further promote renewable energy development, break the old interest pattern and remove local obstacles.

In addition to policy guidance, the development and utilization of wind power fundamentally depends on technological innovation and progress. Medium and low-speed wind turbines, decentralized applications, and the accelerated offshore wind power development can only be made possible with technological advancement and a further improvement of the industrial chain, to ensure the economy, reliability and safety of larger-size wind turbines.

At present, despite some “anti-globalization” voices and occurrences in the world, the global challenges confronted by human development, including energy security and climate change, require the joint efforts of governments, academics, and industry to come up with innovative solutions to ensure sustainable development. Enterprises, acting as the main practitioner of innovation, should strengthen global cooperation and technology exchanges, and achieve sustainable development out of healthy competition.

The report of the 19th National Congress of the Communist Party of China once again stressed that China should "promote the energy production and consumption revolution and build a clean, low-carbon, safe and efficient energy system". The unceasing sophistication of technologies in renewable energy sector has driven the transformation of the global energy system. China is both a major energy producer and a major consumer. While committed to achieving its energy development goals at home, China will also contribute to the global energy system transformation. As a large global-leading renewable energy company, Siemens Gamesa Renewable Energy hopes to share with the Chinese government and partners our technologies, ideas, insights and project implementation experience accumulated across the globe through this report. We also expect to work closely with Chinese partners to jointly explore the wind energy market and potential in China and the world, and support the Chinese people to live a happy future of green development.

This report is composed of four parts. The first part introduces the development trend of wind power in the world, and the irreplaceable role of wind power in China’s future green growth of energy; the second part analyzes the current challenges faced by Chinese wind power market; the third part puts forward some policy recommendations for the sustainable development of the wind power industry in China; the fourth part is a conclusion of the full paper.

Download the full report：More Wind Power to Enable  Green Development of China