Wind power hits a northern snag for Datang
China Datang Corporation Renewable Power is one of the largest wind-power producers in Inner Mongolia, but it has hit a snag: there isn't enough infrastructure in the grid to transport all its power to market. Now the firm is coping by redirecting its investments to other parts of the mainland and selling as much heat and power locally as possible.
The firm is the Hong Kong-listed clean-energy unit of China's second-largest power producer, China Datang Group. Last year the Group cut Inner Mongolia's share of its power assets to 50 per cent, by capacity, from 62 per cent in 2009. The proportion of its assets in northeastern China has risen to 24 per cent from 22 per cent; central and western regions have jumped to 15 per cent from 8 per cent; and southeastern coastal areas to 11 per cent from 8 per cent.
'Our strategy is fluid: when we face capacity restriction in the north, we speed up development in southeast and central regions,' said president Hu Yongsheng. 'When the north's absorption capacity rises later, we'll shift our effort back.'
Around a quarter of the nation's installed wind power capacity was left idle in the past two years, as wind-power construction raced ahead of expansion in the power grid.
In Inner Mongolia and the northeast - the largest wind power producers - wind power distribution was also reduced by the grid's need to give priority to heat and coal co-generation plants in the winter, which provide heat to residential and public buildings. Hu said 10 per cent of China Datang Corporation's total installed capacity is idle due to the 'three to six months of trial runs required for wind-power generators'. Selling heat locally is helping it deal with this issue, as well.
'We expect to have one such project completed this year,' Hu said, adding that he expects a 'substantial increase' in the number of hours the plants are generating power - after falling 1.2 per cent, to 2,134 hours last year. The decline in its Inner Mongolia plants was 2.8 per cent.
The addition of projects in the south - where the grid is robust - will help to increase this year's hours of plant utilisation. Newer and more efficient turbines will help raise output when the winds are light.
Fast-falling turbine costs and better equipment mean previously uneconomic projects can now be developed. Hu expects total project construction costs to fall to 7,500 yuan (HK$8,896) per kilowatt this year from 8,300 yuan last year and 10,000 yuan in 2009. To hedge risks from the domestic market, the company is seeking to venture abroad. 'This year, we will surely have one [overseas] project,' Hu said.
Wind power has outstripped the grid in Inner Mongolia
China Datang Corporation Renewable Power has cut the proportion of its assets there to 50 per cent, from: 62%
The need for trials has idled this much of its installed capacity: 10%