China's current wind power pricing mechanism must be overhauled. The tendering system used for wind power pricing is unclear and has had a negative impact on investment.

China's Renewable Energy Law came into effect early this year. Electricity pricing implementation rules state that the grid feed-in rates of wind-sourced power should be determined by tender. This has drawn a barrage of criticism from industry players, who fear that the practice will lead to low prices that deny investors a reasonable profit.

Wind power is a new industry which needs support. The current pricing policy does not support wind power development, and must be changed.

Price volatility and uncertainty caused by the current regulation harms foreign and domestic private manufacturers and developers, who are discouraged by pricing pressure they cannot sustain.

China has a superb opportunity to develop wind power, but the development relies heavily on an enabling pricing system. We hope that this report will provide the basis for discussions on how to improve the pricing policy for Chinese wind power.

China has taken great strides in wind power development in recent years. By the end of 2005, it had built 61 wind farms with a power generating capacity of 1,260 MW, ranking seventh on the list of the world's major wind players. Last year the Chinese government lifted its wind goal for the year 2020 from 20,000 MW to 30,000 MW. The target can be achieved ahead of time, if appropriate policies are in place.

Source:佚名