Beijing warned not to cut wind power tariffs

Beijing should think twice before cutting wind power tariffs because such a move could see the wind power industry fall short of Beijing's development target for 2020, mainland wind farm developers have warned.

But power distribution executives said the lowering of clean and renewable power prices was an inevitable trend, given that industries should not rely on long-term subsidies and could only become competitive by lowering costs.

The National Development and Reform Commission, the mainland's energy price regulator, is consulting the industry on cutting wind power prices by an average of 6 per cent.

Lower prices were proposed last year after sharp falls in turbine prices cut operating costs, but did not happen amid opposition from wind farm developers and Beijing's declaration of war against air pollution.

While the timing of the proposed cuts remains unclear, the industry is debating whether they should be imposed in the middle of next year or at the start of 2016. They would be the first adjustment in wind power prices since the introduction of subsidised tariffs in 2009.

"As the fair environmental costs have not been fully reflected in coal-fired power prices, it would be questionable whether the 200 gigawatt [accumulated] installation target for 2020 can be reached if wind power prices are cut by so much," Ren Guangjin, director of wind farm development at Hong Kong-listed China WindPower told the China Wind Power conference in Beijing this week.

Lu Yichuan, deputy chief engineer at China Longyuan Power, Asia's largest wind farm operator, said Beijing should not cut prices industry-wide "just because certain operators have reported good financial results".