2.2 Current Status of Developers

2.2.1 Industry Scale

For a long time, Chinese wind farm development enterprises have mainly been large-scale state-owned electric power enterprises. Now, there are already over 60 enterprises (excluding branch companies) that are participating in wind farm investment and development in China. With the exception of the several major central government administered enterprises, the scale of the wind farm development of other enterprises is still very small. In general, Chinese wind farm development enterprises can be classified as follows:

1) Large-scale central government administered enterprises: including Guodian (Longyuan), Datang, Huaneng, Huadian, CPI, CGNPG, CNOOC, CECEP, Shenhua (Guohua), China Three Gorges Corporation, China Resources, State Grid, SinoHydro Group, and HydroChina Corporation;

2) Local state-owned enterprises: such as Beijing Jingneng, Tianjin Jinneng, Shanghai Shenergy, Shandong Luneng, Guangdong Yudean, Ningxia Power Generation Group, Shanxi International Electricity Group, Hebei Construction & Investment Group (China Suntien Green Energy), Fujian Energy, Zhongmin Energy, Fujian Investment & Development Group Co., Ltd..

3) Private and foreign-funded enterprises: such as Heilongjiang Zhongyu Investment, Tianjin (Hebei) Bode, China WindPower Group, GCL Hong Kong, Shanxi Yunguang Wind Power, Wuhan Kaidi, Daoda Heavy Industry, Tongliao Taihe, Honiton Energy, HKC Energy, and UPC.

4) Complete-machine manufacturers participating in wind farm development: such as Goldwind (Tianrun), Gamesa, Zhejiang Huayi, Baoding Tianwei, Changxing Wind Power, Tiandi Wind Power, and XEMC Wind Power.

In 2011, the Top 10 Chinese wind farm developers implemented a total installed capacity of 13.43GW, a 660MW decrease compared to the previous year. The total market share of these ten enterprises accounted for 76.2% of the newly added installed capacity nationwide, 1.8% more than the 74.4% in 2010.

In 2011, while the new installed capacity of wind farms decreased slightly compared to 2010, China Guodian Corporation (including Longyuan Power and GD Power) added new wind power capacity of 3860MW, a 370MW increase compared to the previous year, continuing to maintain its position as the leading wind farm developer in China. Companies whose volume decreased compared to 2010 include: Huaneng, with a decrease of 942MW; CGNPG, with a decrease of 490MW; China Suntien Green Energy, with a decrease of 185MW. Datang basically kept stable and Huadian, Guohua, CPI, China Resources and Jingneng all saw slight increases.

For the installation data and market ranking information of China's Top 10 wind farm developers in 2011, see Tables 2-6 and 2-7.

2.2.2 Development Characteristics and Trends

During the "Eleventh Five-Year Plan" period (2006-2010), large-scale central government-administered enterprises and local state-owned enterprises became the major players in China's wind farm development, with close to 90% of wind power projects developed in China over the recent years invested in, constructed and completed by these corporations. Construction of large-scale wind power bases and the launch of

Table 2-6 Top 10 developers in terms of newly added wind power installed capacities in China in 2011

- China Guodian Corporation is composed of Longyuan Power and GD Power. Source: "Wind Energy" magazine, March 2012 issue

Table 2-7 Top 10 developers in terms of cumulative wind power installed capacities in China in 2011

- China Guodian Corporation is composed of Longyuan Power and GD Power. Source: "Wind Energy" magazine, March 2012 issue

Data Link

According to the data from the China Hydropower and Water Resources Planning and Design General Institute, by the end of 2011, all state-owned enterprises nationwide provided a cumulative wind power grid-connected capacity of 37.98GW, accounting for 79.4% of the total wind power grid-connected capacity (47.83GW) for the whole country. Private enterprises nationwide provided a cumulative grid-connected capacity of 2.18GW, accounting for 4.6% of the whole country's total grid-connected capacity. Foreign-funded enterprises nationwide provided a cumulative grid-connected capacity of approximately 630MW, accounting for 1.31% of the whole country's total grid-connected capacity. Sino-foreign joint ventures nationwide provided acumulative grid-connected capacity of 7050MW, accounting for 14.7% of the whole country's total grid-connected capacity.

By the end of 2011, China's five major power generation groups provided a cumulative grid-connected capacity of 27.1GW, accounting for 57% of the whole country's total grid-connected capacity. The China Guodian Corporation was ranked No.1 in terms of domestic wind power grid-connected capacities, providing a cumulative grid-connected capacity of 9.81 GW. The China Huaneng Group and Datang Group were ranked second and third respectively, providing 6.58GW and 5.74GW. Other individual investment enterprises basically maintained a steady development status. ( See Table 2-8 )

Table 2-8 Construction status of the whole country's major wind power investment enterprises in 2011

Sources: Hydropower and Water Resources Planning and Design General Institute; National Wind Power Information Administration Center; 2011 China Wind Power Construction Results Statistics and Assessment Report.

a photograph of a wind turbine

offshore wind power projects, in particular, have caused an increase in the scale of wind power projects, thereby causing an increase in upfront investment, reducing investment opportunities for other mid- and small-sized wind power developers, such as private enterprises. Since the beginning of the "Twelfth Five-Year Plan" period, the central government has initiated guidelines focusing on both large base construction and the decentralized development of wind power. Some inland regions have begun to plan wind power development projects according to local conditions. The number of these projects is fairly large, but their scale is typically small, bringing opportunities to mid- and small-sized wind power investment enterprises, as small projects are involve less up-front investment and are less competitive to obtain the permits.

In 2011, the static average investment cost of construction of on-land wind farms in China[1] dropped to approximately 7000~8000 yuan/ kW, while enthusiasm for wind farm investment gradually decreased. This was mainly because the central government executed a tight monetary policy, causing some banks to reduce credit limits on renewable energy sources such as wind power, making it harder for wind power development enterprises to obtain capital through bank loans. Therefore, wind power development enterprises must change the traditional single credit channel and raise their funds through other financing channels such as IPO and corporate bonds, thereby ensuring the sustainability of wind power development.

In 2011, the National Energy Bureau, based on problems that occurred during wind farm development, operation and maintenance management in China, issued the "Interim Measures for the Management of Development and Construction of Wind Power", determining wind farm project examination and approval procedures and raising specific requirements, including mandating that non-approved wind power projects cannot get electricity price subsidies, that post evaluation must be conducted 1 year after a project is completed, that wind farm operation information must be reported promptly, and that any and all quality incidents that might occur at a wind farm must be reported. These will become the code of conduct that wind power developers must follow in the future in areas such as project examination and approval, and operation management.

In addition, in 2011, the National Energy Bureau also issued the "Interim Measures for the Management of Power Prediction and Forecast at Wind Farms", requiring all grid-connected operating wind farms to establish their wind power prediction & forecast systems and power generation planning & declaration working mechanisms before January 1, 2012 and formally start implementing them from July 1, 2012. Power grid scheduling bodies must develop wind farm power generation plans according to the power prediction results transferred from wind farms and the principle of prioritizing wind power scheduling, as well as by comprehensively considering system operation requirements, and notify wind farms promptly. Newly built wind farms must establish wind power prediction and forecast systems and working mechanisms for power generation planning and declaration from the outset. These provisions can help improve the ability of power grid companies to plan wind power scheduling, can increase the consumption ratio of wind power to a certain extent, and can also raise requirements for wind power developers in wind farm operation and management.

[1] Static investment means the current value of construction costs calculated based on the unit prices of construction elements during a base year or month when developing the expected construction costs. It includes the increase of construction costs caused by errors in the engineering workload but does not include added investments during subsequent years or months caused due to risk factors such as price increases, as well as the interest on investment spending caused by the passing of time.