For the last half year, the National Energy Administration (NEA) has been making its interest in Inner Mongolia’s western regions crystal clear. This part of north China, rich in wind-power potential, has hosted group after group of energy officials – one lot even spent the 2012 Dragon Boat Festival here. They plan to use the region as a laboratory in which to redesign the country’s policy on wind power.
On June 18, Li Peng, director of the administration’s New and Renewable Energy Department, confirmed the move: “The NEA has officially asked the State Council’s Energy Research Institute to design wind power trials for western Inner Mongolia. The State Council and the NEA will use the outcome of those trials to redesign national wind-power policy.”
It is understood that key aim of this programme is to treat this region as a microcosm of China so as to identify the obstacles to advancing wind power nationally – as well as getting the energy it produces onto the grid – and to come up with solutions.
The NEA has revealed that the trials will cover the electricity supply and grid planning, management of wind-farm construction, methods for local consumption of electricity, the auxiliary services market and even a quota system – something which has been long called for.
How best to export power is not the most important element under the microscope, however. Above all, the project will focus on local consumption and local grid management. The NEA regards building the infrastructure necessary for export as an expensive measure, and something to be looked at only once wind power accounts for a certain proportion of local electricity supply.
Trial projects tabled under the programme are thought to include the provision of electricity to thermal-power plants by a wind farm run by Beifang Longyuan, a subsidiary of the Huaneng energy group; a “heat-from-wind” project near the city of Chifeng, belonging to Datang Power Generation; and a combined wind and power storage scheme in the prefecture of Alashan.
Inner Mongolia has already made some scattered efforts to boost local consumption of electricity generated by wind. Li Jianchun, secretary of the Inner Mongolia Electric Power Association’s wind energy division, said these have included the provision of wind-energy to thermal power plants, “wind-to-heat” projects, the use of thermal power to supplement wind power at peak times and improved management of power-grid operations.
In the eyes of Qin Haiyan, secretary of the China Wind Energy Association, the success or otherwise of these trials will determine the future of wind power in China: will it remain less that 5% of total electricity generation, or could it reach the 20% or more that some other countries have achieved? Will it be a supplementary or primary source of power? Will the fanfare over wind power continue, or will the cheers die down?
Back in 2011, rumours about the creation of a “comprehensive new-energy trial zone” in Inner Mongolia started circulating in the industry. This push has a lot to do with the current state of the wind sector. Last year, the Chinese wind industry wasted 10 billion kilowatts of power and lost more than 5 billion yuan (US$786 million). Turbines were seen standing idle for 19 hours every day.
In Inner Mongolia, only 44 of the region’s 150 wind farms were in operation for more than 2,000 hours in 2011. Thirteen ran for less than 1,000 hours. And most firms saw losses. In the first half of 2012 alone, China Guangdong Nuclear Power’s wind farms in western Inner Mongolia burned through tens of millions of yuan.
The NEA is struggling to understand how China ended up here. Why, when countries like Germany, Denmark and the United States are aiming to raise levels of wind in overall power generation to levels between 18% and 20%, does this source still account for less than 2% of China’s energy supply?
Top government leaders have also provided impetus for the trials. During a visit to Spain in January, Chinese vice-premier Li Keqiang (expected to become China’s next premier) set aside time to look at how wind farms are connected up to the grid in the European state. When he got home, Li instructed the NEA to decide where to run a trial application of the Spanish experiences in hooking wind up to the grid, according to vice-chair of the Energy Research Institute (ERI) Gao Hu.
The NEA has already conducted various experiments in a bid to develop China’s wind sector, including the Rudong 150-megawatt inter-tidal wind farm and Xuchi Low-speed wind project in the eastern province of Jiangsu, the Zhangbei wind and solar storage and delivery project and a high-altitude wind farm trial in Naqu, western Tibet. But none of them have produced convincing results. The view put forward by Li Peng is that a more systematic trial, run on a regional basis, may have better luck than these scattered efforts. For that, the NEA has chosen the west of Inner Mongolia.
There were good reasons for this choice. Wind power provides a large proportion of electricity here – in the second half of April this year, wind-generated power regularly reached 20% or more of supplies. At its peak, it edged over 30%. And there are grid advantages too: the level of connectivity in the wind sector has already reached the global average in this region, according to deputy head of control and communications at Inner Mongolia Power Hou Youhua. More importantly, explained Gao Hu, “the grid here is quite independent, which means a lot of complications in trial and policy design can be eliminated, and the outcome will be easier to control.”
Lack of local enthusiasm
But in Inner Mongolia itself, there seems to be less enthusiasm for the endeavour than in central government.
When Southern Weekend put questions to the office responsible for new energy at Inner Mongolia’s economic planning body, the Development and Reform Commission, officials there said that the local government had not yet made any formal statement or issued any documents on the matter, and as such they could not comment. The Economic and Information Technology Commission’s wind-power authorities gave the same response. Everyone involved is keeping their cards close to their chests, and they have good reason for caution.
In 2011, Beifang Longyuan was awarded an NEA trial project in which wind power would supply the electricity needed to operate a thermal power plant. The scheme was meant to get up and running in 2012, but has been beset by a string of problems.
An Chiyu, head of planning and development at Beifang Longyuan, is in charge of the trial. From the start, he found that engineers weren’t interested in designing the project: the Inner Mongolian Power Design Institute, which is located just next door, turned it down. The China Electric Power Research Institute also rejected the scheme. Only the Northwest Power Design Institute said they would “have a try”.
“They all refused because the technology for supplying wind power to thermal power plants is very complex,” explained An. At the time of our interview, he was still waiting for Northwest Power to come back with its proposal.
But the biggest problem isn’t technology, it’s money. An explained that, in the past, the power plant has generated its own energy at a cost of about 0.1 yuan per kilowatt hour. Although the government provides a 0.2 yuan subsidy for wind power, the plant still has to pay 0.31 yuan per kilowatt hour for the wind energy – that’s about 192,000 yuan (US$30,000) of extra expenditure every day. “If thermal power plants use wind power, they lose out.”
“If the project goes ahead, we hope the power plant will make up its losses from extra sales of thermal power,” said Zhang Wei of Beifang Longyuan. “That would require the Economic and Information Technology Commission to change electricity-generation plans, and make changes to grid management – and we don’t know if that will happen.”
Beifang Longyuan was chosen for the trial as its based just 30 kilometres from where the power will be consumed, at Baotao’s No.1 Power Plant. And, as both the power plant and the wind farm belong to Beifang Longyuan, the costs and benefits are more easily handled. But what were once regarded as advantages have actually become obstacles.
An has worked out that once the trial is under way, when wind power isn’t being generated, the company will have to buy power in from the grid to make up the difference. Another employee explained that making changes to the power plant costs money, as does building the necessary 30-kilometres of power cables – the transmission line alone will cost 50 million yuan, and Beifang Longyuan has to cover these expenses itself.
Other projects, such as Datang’s Chifeng scheme, have hit similar problems.
Policy breakthroughs needed
The NEA’s trials in the west of Inner Mongolia are only just getting started and it will be some time before they are fully under way. But wind industry insiders point out that, even though some of the projects will likely succeed, their experiences won’t necessarily be applicable across China. When it comes to providing wind power to thermal-power plants, for example, in how many places are you going to find wind farms, thermal power stations and grid load centres in such close proximity?
More importantly, the trials will be greatly devalued if they do not also look at new ways of running the power grid and electricity system as a whole.
One power grid worker, who did not want to be named, explained that arrangements for electricity to be supplied to the grid are currently made a day in advance: in the afternoon, it is decided how much power will be generated from which sources on the following day, and those figures cannot be changed. But wind power is not as predictable as conventional energy sources, meaning there are fluctuations in power flows and energy goes wasted. The grid in western Inner Mongolia is fined 8 million yuan (US$1.3 million) by the regional grid every month because of this. This problem would be much reduced if adjustments could be made in real time.
Also, China plans how much electricity each facility will generate – and if thermal power hasn’t used up its quota, wind power must stand idle. The same source added: “If there aren’t breakthroughs in power policy and mechanisms, it will be hard to increase the amount of wind power reaching the grid.”
Lu Yanlai is a reporter at Southern Weekend, where this article was first published.
This article is edited and translated as part of our Green Growth project, a collaboration between chinadialogue and the Energy Foundation.
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