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Beijing has said that it should be feasible to scrap the subsidy support for China’s wind power development by 2022, given the expected decline in generation costs from lower turbine costs and higher production yields.
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Joseph Jacobelli, Senior Analyst of Asia Utilities at Bloomberg Intelligence, said that considering that turbine costs should decline further and new generation turbines should produce more kWh for the same capacity, it is highly likely that the wind power sector will continue to develop without governmental subsidy support. He said that the suspension of subsidy has been discussed for many years, and 2022 might be when it took place.
Beijing plans to phase out subsidies for wind turbine manufacturers by 2022. A government official, speaking anonymously, said that manufacturers should “actively improve technology to cut costs in order to gain market share, instead of depending on government subsidies.”
According to the 13th Five-Year Plan (2016-2020) for wind power development, by 2020, electricity prices from wind power will be reduced to 0.4 yuan per kWh, those from solar to 0.6 yuan per kWh, similar to the cost of traditional power sources.
Liang Zhipeng, Vice Director of the New Energy and Renewable Energy Department, part of the National Energy Administration, said that China has made significant progress in wind power technology, reducing the cost of wind-based electricity. He said: “We have manufactured bigger, taller wind turbines with larger installed capacity. Wind turbines with a diameter of 110m, height of 140m, have been widely used in offshore wind farms in China. They have 5 GW of capacity, and some companies are developing wind turbines with 10 GW of capacity.”