China’s wind farms have long had a cloud hanging over them: not enough of their clean energy is consumed. That seems odd; a combination of rapid urbanisation and thousands of coal-fired power stations makes for severe pollution problems, which the state is desperate to reduce. A change in government regulations should improve matters for hard-pressed renewable generators but it will not solve all their problems.
The National Energy Administration has done its bit for pollution reduction by encouraging renewable energy, mostly wind power, through favourable tariff structures. Last year, wind accounted for about 4 per cent of total generation and is due to more than double by 2020.
But the NEA faces two big challenges. One is obvious: not even the all-powerful Chinese Communist party can make the wind blow. The other is that while regional networks are required to accept power produced from wind farms, some regional grids nevertheless refuse. In the north-western provinces of Xinjiang and Gansu, almost half of the wind power offered by generators was rejected (or “curtailed”) in the first three months of this year. Wind power specialists such as China Longyuan Power and Huaneng Renewables, which have borrowed heavily to invest in construction, complained bitterly. Their shares have trailed broader market indices for years.