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China Seeks Big Wind in a Push To Standardize Project Size

The Chinese government is now working on new procedures that will standardize the inspection and approval process for wind power projects in a move to address the wind power grid connection and operation security issues that dog the sector's development.

What has been termed as non-mainstream small wind power projects, specifically those with installed capacity of 49.5 MW, have become the focus of severe criticism. Companies had been favoring projects below 50 MW as those above this capacity required state-level approval, while projects below 50 MW could go live following approval at the local level.

To avoid the complicated state-level approval procedure and take advantage of the much more expedient local level process, as well as the lower level of investment and easier connection to the grid, many companies opted for 49.5 and 49.9MW projects, creating a massive gray area just below the radar of the state-level approval system.

As a result, this mass of small projects not under the review of state-level authorities has created a huge misalignment between the country’s wind power plans and power network plans.

A report from Hydrochina Corporation (formerly the Administration of Water Resources and Hydropower Planning and Design), revealed that during 2009, 187 wind farm projects were approved, and 111 of those projects were at 49.5-MW capacity, accounting for 59 percent of the year’s total approvals.

As for the huge imbalance created by local-level approvals, State Grid Corporation of China (SGCC) executive vice president Shu Yinbiao recently leveled this criticism. “We are completely in the dark about the locally approved wind farms below 50 MW, and as a result, we cannot implement the corresponding supporting infrastructure, leading to a major gap between wind power development and power network construction,” Yinbiao said.

The SGCC’s and provincial-level inspection and approval procedures are essentially the same. However, as the SGCC deals with projects spread across the country, the regulatory authority has fully standardized the process. By contrast, provincial authorities handle fewer projects, are highly flexible and time to approval is short.

Documents leaked to date show that 50-MW projects will continue to be approved at the state level while those under may still be approved at the local level as long as their approvals are filed with the National Development and Reform Commission. However, going forward, local governments approving the smaller projects will now need sign off from the National Energy Administration in order to proceed.

“The procedures will begin with four focus points, including governmental administration, wind farm operation, wind power equipment performance and power grid dispatching,” said Deputy director-general Shi Lishan of the New and Renewable Energy Department of China’s National Energy Administration. The new approval process under development shows the government’s willingness to use administrative methods to control its wind power sector. The goal is to align and optimize the development plans of the country’s wind power industry with those of its energy grid.

In response to this, wind power developers are quietly upgrading their strategies, and said they will adapt to the changing conditions and shift their development model for wind power projects. A general manger at one of China’s leading wind power companies said that they will gradually reduce the number of projects below 50 MW capacity. “We will also invest in establishing wind farms with capacity of above 100 MW, in conformity with the national government’s planned large wind power bases,” he said.

As the country continues to tighten the project approval process and the development efficiency between the small and large projects become the same, these companies will start to incorporate the small wind power projects into larger ones, and work at the state-level to facilitate integration into the country’s larger projects.

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