China is seen to install 251 GW of wind farms between now and 2029, reaching about 461 GW of cumulative wind capacity, according to Wood Mackenzie.
Developers have rushed to complete projects this year before the subsidy for Chinese onshore wind is phased-out. From 2021, new wind farms will no longer be able to rely on subsidies, which could depress the market and affect developer profitability. This, however, will be a short-term effect, Wood Mackenzie said.
“The combined impact from coronavirus and the rush to install new wind capacity before the end of subsidies, could cause the LCOE for wind to rise 8% to CNY 472 per megawatt-hour in 2020 compared to 2019. This will prevent onshore wind from meeting the government’s target for grid parity in 2021,” explains senior consultant Xiaoyang Li.
In the long run, the growth in wind capacity will be fuelled by the decrease in the levelised cost of electricity (LCOE). This is also valid for solar so Wood Mackenzie expects more severe competition between the two post 2026 when these technologies become cheaper than coal power in some Chinese provinces.
By the end of the year, solar will surpass wind in terms of cumulative capacity in China, the market research company adds.
