Integrating Wind into the Chinese Power Sector: Development, Barriers and Solutions

Xinyu Chen Harvard China Project

xchen@seas.Harvard.edu

The Energy Policy Seminar Series| Harvard Kennedy School March 28 2016

Wind Power Development: Global Trend

34%

17% 10%

6%

3%

30%

Cumulative Capacity 2015

China US Germany India UK Others

52%

13% 8%

4%

2% 21%

Added Capacity in 2015

Wind Power in China: Future Goal

Carbon abatement

20% non - fossil sources in total energy 2030 (INDC)

60 -65% reduction in Carbon intensity relative to 2005

Air Quality Improvement

Strengthened control on primary PM, SO 2, Nox in power sector

Renewable Energy Law

Feed- in Tariff

Dispatch Priority

2015 2020 2030

100 GW in 2015 at 12 th Five Year Plan

2 00 GW installed Capacity by 2020

400 GW by 2030 from Energy Research I nstitute

Targets

Geographical Distribution

Geographical Distribution

Current and future installed wind capacity (diameter) and peak power demand (height of circle center) of major provinces in China

Pe

ak P

ow

er

De

ma

nd

/ In

sta

lled

Win

d C

ap

acity

(GW

)

Curtailment: A Major Barrier for Wind Power Development in China

Curtailed wind power accounted for 16% of total wind generation in 2011

$ 1.6 billion loss

National Energy Bureau has suspended further development of wind resources at onshore bases in 2016 where curtailment is larger than 20%

Challenge I : Imbalanced Geographical Distribution

Max daily wind production ratio of total consumption

According to State Grid, wind power penetration in some wind regions is approaching the highest levels in the world, comparable with Denmark and Spain.

The maximum daily wind production

reached 94%, 31%, 33% and 32% of the corresponding daily consumption in Eastern Inner Mongolia (E.IM), Western Inner Mongolia (W.IM), Gansu, and Jilin respectively .

Significantly High Local Wind Penetration Level

Thermal power dominates in 3- region: Flexible sources, such as hydropower, pumped storage, gas

turbines, oil generators, are insufficient, leading to inadequate load-following and reserve provision.

Challenge II: Inflexible Generation Mix

China data end of 2013, other countries 2014.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

North China Northeastern China

Northwestern China

Germany US Spain

Coal Gas Nuclear Hydro Wind Solar

Challenge III: Heat - driven Operation of Combined Heat and Power (CHP) Units

National Average 25%

North China 50%

Northeast China

7 0%

Heat demand distribution The share of CHP in thermal units

Must -run units in heating season

Possible range of power output decreases with the increase of heat demand

Heat demand is predetermined by heating companies

Typically range between 70% -90% of the nameplate capacity in heating season.

Limited Flexibility of CHP

- 11 -

Deregulation (2003)

Five generation groups

Two grid companies

Challenge IV: Rigid Regulatory Structure

National Dispatch Center 1

Regional 5

Provincial 26

Municipal 309

County 1702

Challenge IV: Rigid Regulatory Structure

Annual/monthly inter -regional transmission plan and dispatch of major units (e.g. Three Gorges Dam)

Annual/monthly inter -provincial transmission plan

Provincial energy balance and operational dispatch

Potential Cost Effective Solutions

Electric Vehicles

Integration with Heating

System

Interregional Transmission Coordination