Introduction: China's onshore wind power grid electricity prices have been brewing for downward adjustment after five years of unchanged implementation. The proposed plan is divided according to different regions, with a reduction range of 2-5 cents.

The onshore wind power grid electricity prices in China have been brewing for downward adjustment after five years of unchanged implementation. The proposed plan is divided according to different regions, with a reduction range of 2-5 cents. It is worth noting that in the proposed plan, all wind power projects that will be put into operation after June 30, 2015 will be implemented according to the new grid electricity price.

Recently, the Price Department of the National Development and Reform Commission held a symposium on onshore wind power prices, announcing the proposed price adjustment plan. The benchmark electricity prices for four types of wind power resource areas were adjusted from the current 0.51, 0.54, 0.58, and 0.61 yuan/kWh to 0.47, 0.5, 0.54, and 0.59 yuan/kWh. And based on this adjustment, the electricity prices in Fujian, Yunnan, and Shanxi provinces will be adjusted from 0.59 yuan/kilowatt hour to 0.54 yuan/kilowatt hour; Adjust the electricity prices of Jilin and Heilongjiang provinces to 0.54 yuan/kilowatt hour. The region with a current benchmark electricity price of 0.61 yuan/kilowatt hour plans to reduce its electricity price by 2 cents, while the provinces of Fujian, Yunnan, and Shanxi will reduce their electricity prices by 5 cents and all others by 4 cents.

An unnamed industry authority told Economic Observer that this is bearish news for the five major power companies, as a 1 cent reduction in grid electricity prices can directly reflect a decrease in corporate profits, let alone a 2-5 cent reduction. From the perspective of enterprises, power companies naturally have to oppose this policy.

The above-mentioned individuals stated that the increase in wind power grid electricity prices is what power companies hope for, but there will be no further increase in wind power grid electricity prices in the future, only a gradual downward trend is possible. At present, the proposed plan is being solicited for opinions, and the reduction is a definite decision. However, the extent of the reduction is still a matter of balancing the interests of all parties involved.

Chen Zhe, a senior researcher at the China Academy of Energy Economics, told Economic Observer that the National Development and Reform Commission has been considering lowering wind power prices for a long time, and the magnitude is relatively moderate. However, considering the current policy situation, it slightly deviates from the direction of encouraging the development of renewable energy generation.

According to Chen Zhe's analysis, considering that the promotion of distributed photovoltaic projects requires more financial efforts, while the investment, construction, and operation costs of wind power projects have decreased due to technological advancements, the regulatory authorities have adopted a strategy of robbing Peter to pay Paul in the face of limited subsidies for renewable energy generation, which is similar to the adjustment of coal-fired power grid prices.

Chen Zhe stated that, however, the moderate reduction in relative electricity prices and the smooth integration of wind power into the grid are still more headache inducing issues for enterprises. According to the recently released 2014 China Wind Power [-5.80%] Construction Statistical Evaluation Report, the amount of "abandoned wind" electricity caused by power restrictions in the first half of 2014 was 9.1 billion kilowatt hours, and the abandonment rate remained as high as 10.5%, an increase of 0.5 percentage points year-on-year. Although there have been many wind farm constructions and short-term difficulties in power grid consumption in some regions in the past two years, such a huge amount of electricity waste is still heartbreaking, and it is urgent for regulatory authorities to increase their attention.

According to the analysis of the above authoritative figures, one important reason for the reduction of wind power grid electricity prices is that the government subsidies for wind power are based on the grid electricity prices of local desulfurization coal-fired power plants. Since last year, coal-fired power units have lowered their electricity prices twice, so the financial subsidies for wind power have also been lowered. This is a reasonable thing, not a change in the country's support policies for wind power.

It stated that although the country plans to lower the grid electricity price of wind power, there is huge development space for wind power in the future. In 2013, China's wind power generation reached 140 billion kilowatt hours, a year-on-year increase of 35.3%, and the cumulative installed capacity reached more than 90 million megawatts. After the problems of power system consumption and financial subsidies are solved, the installed capacity of wind power will reach several hundred million megawatts in the future. At present, although the onshore wind power resources in China have been almost exhausted by major enterprises, there are very few that have truly been built and put into operation. Enterprises holding wind power resources are weighing various advantages and disadvantages in complex environments and are just in a wait-and-see state.

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