China lost more than 10 billion
kilowatt-hours of electricity generated by wind power facilities in 2011 due to
limited access to the power grid, state-controlled news agency Xinhua reported
Monday, citing a release by the National Energy Administration.
Wind power utilization by State Grid Corp. and China Southern Power Grid Co.,
the nation's sole power distributors, dropped to 1,920 hours and 1,801 hours in
2011, causing some 5 billion yuan in losses to China's wind power companies,
Xinhua said.
With many wind power projects located in rural areas, there's not much funding
to build grids there, especially when the government controls retail
electricity prices.
The limited grid access became a major bottleneck for China's wind power
industry development, and local energy departments, power grid operators and
power generation companies need better planning and coordination to improve
wind power utilization, according to the NEA release.
China has surpassed the U.S. as the nation with the largest installed wind
power capacity, according to the Chinese Renewable Energy Industries
Association, but a significant portion of this capacity has remained idle due
to a lack of grid connectivity.
Beginning this year, Beijing has been trying to carry out incentive plans to
boost power companies' revenue by improving their grid connectivity.
In April, China's Ministry of Finance announced that grid operators will
receive additional subsidies based on the wholesale price of electricity, known
as the on-grid tariff, benchmark coal prices and other factors, in proportion
to the distance they build their grids for renewable energy projects.
The companies will earn an additional 0.01 Chinese yuan per kilowatt-hour for
expanding their grids by up to 50 kilometers, CNY0.02/kWh for expansions of
50-100 kilometers and CNY0.03/kWh for expansions exceeding 100 kilometers, the
ministry said.
China's power producers often rely on adjustments to the on-grid tariff to
recoup losses from higher coal prices that they are unable to pass on to
consumers because of government caps on domestic prices.