Notice on Issuing the Fourth Batch of Wind Power Approval Plans for the 12th Five Year Plan Period by the National Energy Administration

On February 13, 2014, the National Energy Administration issued a notice on the approval plan for the fourth batch of wind power projects during the 12th Five Year Plan period (National Energy New Energy [2014] No. 83). The total installed capacity of the projects in the fourth batch of wind power approval plan during the 12th Five Year Plan period in China was 27.6 million kilowatts.

Starting from 2011, in order to grasp the pace of wind power development and promote the healthy and orderly development of the industry, the National Energy Administration began to formulate a wind power project approval plan. The first three batches of wind power were approved with a scale of 26.83 million kilowatts, 16.76 million kilowatts (later supplemented with 8.52 million kilowatts), and 27.97 million kilowatts, respectively. At this point, the cumulative scale of wind power projects to be approved since the 12th Five Year Plan has exceeded 100 million kilowatts.

Scale Breakthrough Expectations

In the past two to three years, due to severe wind power curtailment and restrictions in the "Three North" areas, the wind power industry has been experiencing chills, and there are doubts about whether the country should develop wind power. The confidence in industrial development has been greatly affected.

"The fourth batch of wind power with a planned approved capacity of 27.6 million kilowatts has greatly exceeded industry expectations, sending a clear signal to the industry that the country will continue to promote and strongly support the development of wind power." said Yi Yuechun, Deputy Chief Engineer of the Hydropower and Water Resources Planning and Design Institute and Executive Deputy Director of the National Renewable Energy Information Management Center.

Various signs indicate that the wind power industry is bottoming out and showing a clear trend of recovery. The preliminary statistical data released by the National Renewable Energy Information Management Center recently showed that in 2013, China's wind power added 14.92 million kilowatts of grid connected capacity, a year-on-year increase of about 0.6 percentage points, especially the annual utilization hours increased by 180 hours, and the profitability of development enterprises generally improved. The National Energy Work Conference held at the beginning of this year proposed a wind power development goal of 18 million kilowatts in 2014. If this goal can be achieved, the wind power industry will once again enter the fast lane.

"In the future, with the strengthening of wind power development in the central and eastern regions and inland regions, as well as the acceleration of wind power transmission channel construction and the acceleration of atmospheric pollution control to adjust the energy industry structure, the utilization of renewable energy, especially wind power, will be further strengthened." Yi Yuechun said.

Decentralization of power, each performing their own duties

Unlike previous batches of wind power approval plans, the fourth batch was carried out after the government's functional transformation and decentralization in 2013.

Previously, China's wind power project management required that wind farms with an investment of 50000 kilowatts or more must be submitted to the National Development and Reform Commission for approval, while wind farms with an investment of less than 50000 kilowatts must be included in the proposed approval plan and approved by the local government. On May 15, 2013, in accordance with the State Council's Institutional Reform and Functional Transformation Plan and the State Council's Decision on Cancelling and Decentralizing a Batch of Administrative Approval Projects, the National Energy Administration delegated multiple approval powers to local authorities, including the approval of enterprise investment in wind power plant projects. At this point, the approval power for wind power has been fully delegated to local authorities.

"The approval authority is delegated, and all projects in the fourth batch are decided and reported by each province on their own. The National Energy Administration is only responsible for macro management functions such as total amount control. According to the requirements of relevant documents of the State Council, the additional funds for renewable energy electricity prices are subject to a pre allocation mechanism. Therefore, the project information reported by each province will become the basis for budget allocation and distribution of subsidy funds." Yi Yuechun said, "Local authorities are responsible for the approval and implementation of specific projects, and the National Energy Administration will overall control the development direction of the industry. At the same time, it will propose macro level guidance requirements and strengthen the formulation of technical standards, which will become a new model for the management of the wind power industry."

Respect practical rational layout

Experts generally believe that another highlight of the fourth batch of wind power approval plans is that the national energy regulatory authorities have more respect for the actual development of the industry and ensure the rational layout of the wind power industry.

This document specifically proposes to pay attention to the conditions for grid access and projects with good market consumption. For provinces (regions) such as Heilongjiang, Jilin, and Inner Mongolia, which still face severe power restrictions, the approval plan will be studied separately. In the past three years, the national energy regulatory authorities have strictly controlled the areas with severe wind curtailment, and arranged the scale of new projects under the conditions of implementing the grid's acceptance capacity and consumption market. At the same time, they have actively guided industries to layout in the central, eastern, and southern regions with better consumption conditions, and have achieved significant results. According to preliminary statistics, in 2013, the average utilization hours of grid connected wind power projects in central, eastern, and southern China exceeded the national average.

"In the fourth batch of plans, the proportion of construction scale in the central, eastern, and southern regions of China has further increased, reaching about 60% of the total national construction scale of this batch. Especially, Hunan Province's annual construction scale has reached 2 million kilowatts, making it a key province for wind power development in central China. It can be said that wind power in the central, eastern, and southern regions of China has officially entered the stage of large-scale development, and the optimization effect of industrial layout is obvious." Yi Yuechun said.

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