Turbines in China may spin without being subsidized

From the China Daily

It should be feasible to scrap the subsidy support for China’s wind power development by 2022 given the expected decline in generation costs from lower turbine costs and higher production yields, analysts said.

The suspension of subsidy has been discussed for many years, and 2022 might be the time when that would really happen, said one reporter.

Considering that turbine costs should decline further and new generation turbines should produce more kilowatt-hour for the same capacity, it is highly likely that the wind power sector will continue its healthy development without government subsidy support, said Joseph Jacobelli, a senior analyst of Asia utilities at Bloomberg Intelligence.

The suspension of subsidy has been discussed for many years, and 2022 might be the time when that would really happen, he said.

Beijing plans to phase out subsidies for wind turbine makers by 2020 or 2022. An unidentified government official was quoted by several media outlets that manufacturers should “actively improve technology to cut costs in order to gain market share, instead of depending on government subsidies”.

According to the 13th Five-Year Plan (2016-20) for wind power development, by 2020, electricity prices from wind power will be reduced to 0.4 yuan per kWh, those from solar to 0.6 yuan per kWh, similar to the cost of traditional power sources.

“China can stop providing subsidies for wind power by 2020, as the price of wind-based electricity is already relatively low. That would make it more competitive compared with electricity generated from other sources,” said Han Xiaoping, chief information officer of China Energy Net Consulting Co Ltd.

“An alternative to government subsidy would be to require electricity retailers to buy renewable energy certificates from producers of wind and solar power,” Han said.

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