The National Development and Reform Commission, China's top economy planner announced on Friday that the country has set benchmark tariffs for new wind projects, varying by region, Oriental Morning Post reported.
China has been divided into four wind resources regions, and the benchmark on-grid tariffs for new wind power plants in the four regions are at 0.51 yuan, 0.54 yuan, 0.58 yuan or 0.61 yuan per kilowatt hour (kWh), according to an announcement issued by the central government.
As in the past, grid firms that pay the premium of wind power prices over on-grid rates for coal-fired plants will be compensated by surcharges levied nationwide on electricity use. China's on-grid tariffs for power generated by five major power generating groups averaged 0.347 yuan per kWh in 2008, in which rates for coal-fired power plants, the staple of electricity supplies, ranged from less than 0.3 yuan to slightly more than than 0.4 yuan, and output from hydropower stations was in some cases even below 0.2 yuan, Reuters once reported.
China has set to develop its wind power energy since 2008 and build 6 large-saceld wind farm bases in Inner Mongolia, Gansu, Xinjiang, Hebei and Jiangsu. China is set to raise its wind power capacity to 100 gigawatts (GW) by 2020.
China's wind sector is a high-growth and lucrative industry and companies who can leverage on the low cost of raw materials can still make money even with the current rates, Reuters citing Michael Yuk, analyst with Sun Hung Kai Financial.
However, China's wind tariffs are 10-20 percent lower than those in major European countries such as Germany. Returns generated from the projects are usually at 6-7 percent, compared to thermal power's 13 percent, a Nomura report said.
