China is projected to install 251 gigawatts (GW) of new wind capacity from 2020 through 2029. Through the end of the decade the country’s wind power sector could hit a combined grid-connected potential of 461GW, according to Wood Mackenzie.
More than 25 wind bases with a total capacity exceeding 100GW are already planned and under construction to support wind growth in the near term. Throughout the long run, rising rates of electricity costs (LCOE) are expected to drive additional capacity.
“The coronavirus has impacted 10% of new capacity additions in 2020. However, the bigger challenge for wind developers is the looming deadline for the termination of national subsidies by the end of the year.
“The combined impact from coronavirus and the rush to install new wind capacity before the end of subsidies, could cause the LCOE for wind to rise 8% to 472 RMB per megawatt-hour in 2020 compared to 2019. This will prevent onshore wind from meeting the government’s target for grid parity in 2021.
“Following a surge in new installations in 2020, we expect new onshore wind capacity to decrease 16% year-on-year in 2021 as wind developers grapple with a new subsidy-free era. The termination of subsidies could depress the market and hurt developer profitability in the short term.”Xiaoyang Li, Wood Mackenzie senior consultant.
Chinese wind markets are expected to face greater competition from solar power in the longer term. In terms of cumulative capacity, solar installations have experienced significant growth since 2015 and will overtake wind by 2020.