China - Giant wind farm to open in September 2005

China's largest wind farm is slated to open in September in Guangdong province, in an increased effort to develop wind power on the mainland. The first phase of the Huilai Shibeishan wind power plant will benefit from additional preferential policies in the renewable-energy law that takes effect next January 1. Developers of the 702 million Yuan (HK$661.5 million) project are Shenzhen-listed Guangdong Electric Power Development, its parent Guangdong Yuedian Group and Yuedian's Hong Kong subsidiary, Chaokang Investment. A senior official of Guangdong Electric, who asked not to be named, said the Huilai plant, the first Chinese wind-power project put out to tender, will have an installed capacity of 100,000 kilowatts with about 200 generating units. The first phase, with installed capacity of about 20,000 kilowatts, will enter service in September. ``Since one generating unit of the Huilai plant can power more than 100 households at a time, it should be able to power 20,000 households once it is completed next year,'' he said.

Guangdong already has wind-power facilities in operation at Nanao and Shanwei, with a combined generating capacity of about 70,830 kilowatt. There is plenty of potential for wind power in Guangdong, whose long coastline is suited to the operation of wind farms. The generating capacity of China's leading manufacturing province now falls some 5 million kilowatt short of consumption during peak times. The Guangdong Electric official said peak power demand this year in China's largest manufacturing province would increase by about 15 percent year-on-year to 35 million kilowatt. He said the project will enjoy a 50 percent reduction in value-added and corporate income taxes. And as a franchised power plant, it will benefit from preferential pricing policies for the first 25 years of operation. The ``on-grid price'' of power from franchised plants - the price paid by distributors of electricity - is more than 0.5 Yuan per kilowatt-hour, higher than for non-franchised power plants.

Liang Zhipeng, deputy director of the Centre for Renewable Energy Development under the National Development and Reform Commission, said Beijing wants Guangdong to be a showcase for wind power. ``Thanks to its long coastline, Guangdong is well suited to wind-power development. The wind-power capacity in Guangdong will increase fivefold over the next six or seven years,'' he said. The Renewable Energy Resources Law passed last month gives power producers more incentives to develop renewable energy sources. ``For example, power grid operators are obliged to buy the power produced by the wind farms,'' Liang said. The law also stipulates that all wind-power projects must be put out to tender. Among Guangdong cities, Shantou has tried hard to interest local and foreign investors in helping to develop its wind-power resources. Generous on-grid prices are one of the ways that Shantou is encouraging wind power investment. Its on-grid tariff for wind power is 0.6-0.9 Yuan per kilowatt/hr, compared to 0.3 Yuan per kilowatt/hr for coal-generated power.