New research by MAKE Consulting shows that China is projected to add more than 20 GW of grid-connected wind power capacity this year. Further, the consultancy estimates that more than 60% of this year's installations are expected in Class I, II and III wind regimes.
According to MAKE, a number of market drivers are combining to deliver approximately 21.5 GW of new grid-connected capacity to China in 2015 – an increase of 8.6% over 2014, which also was a busy year for wind installations.
MAKE has upgraded expectations for the Xinjiang province, particularly Hami, where one ultra high-voltage line is in operation and another is expected to be approved this year, continuing short-term growth momentum. MAKE notes that Xinjiang is a key geographic location for China's recent political target to implement a 'one belt and one road' economic strategy that would support substantial investment in the underdeveloped Northwest. Xinjiang is also home to some of the best wind resources and project development conditions in China, according to MAKE.
Coastal provinces in the East and Yunnan province in the south will continue to benefit from relatively high average internal rate of return over the short-term due to consistently high average wind utilization hours in recent years.
Consequently, Xinjiang, Yunnan and coastal provinces in the east may become the focus of an upcoming second round of feed-in tariff reductions at the end of 2016 or beginning of 2017. China's outdated wind classification system may also be adjusted to better reflect the wind resources in each province.
In addition, MAKE's analysis of approved pipeline indicates a focus on new installations in Xinjiang, Ningxia and Hebei this year.
However, MAKE warns that curtailment in certain provinces will worsen as the year progresses because the substantial increase in capacity will exceed power demand and grid capability. As a result of 2014-2015's high growth, China's wind industry faces uncertainty going into 2016.