China’s current power crisis could represent an opportunity for the wind industry

Key Highlights

Despite skyrocketing raw material prices, the wind sector has been an exception in China, with both onshore and offshore tender prices reaching new record low – 2000 CNY/kW milestone for onshore and 4000 CNY/kWh for offshore in the latest tenders.

China’s wind industry is now competing successfully with its coal industry without any support and it is estimated that between 10.7 and 15.1 GW of new offshore wind capacity will come online in 2021.

The price decrease was particularly due the use of effective subsidy schemes and long-term planning by the Chinese Government and the gradual phasing out of Feed in Tariffs (FIT) and implementation of policy in favour of the wind industry.

On the other hand, coal electricity prices can now vary up to 20 % compared to the baseline price as in the last few months coal power companies refused to produce electricity due to rising coal price.

China’s wind market has reached economies of scale, coupling with a highly robust localised supply chain and technical innovation, it is now in the position to supplant coal as China's main electric source.

Contact

Esther Fang

Project and Communications Assistance
[email protected]

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