Thanks to strong government support for renewable energy, the Chinese wind power market is expected to reach the equivalent of $10.2 billion this year and is likely to experience another five-year period of expansion, finds a new report from IBIS World.
According to the firm, over the past five years, China's wind power revenue has been growing by 73.9% annually. However, the Chinese wind energy market faces a number of challenges.
First, China's wind power growth will be limited by new government regulations that require the approval of new wind power projects by the National Energy Bureau, IBIS World says.
In addition, although China benefited from a national standard for grid-connected wind turbines enacted in November 2011, bottlenecks are still common, and large amounts of electric power are still discarded due to limited transmission capacity, IBIS World explains. In fact, projects in regions where over 20% of electricity generated by wind power is discarded due to limited transmission capacity will no longer be approved.
The top four wind power generators in China account for almost half of industry revenue this year. The concentration level of the industry dropped sharply after the Power Sector Reform in 2002, when the former monopoly, the National Electric Power Corp., was split into five major state-owned power generation groups and two electric grid corporations.
The five major power generation groups - China Guodian Corp., China Datang Corp., China Huaneng Group, Shenhua Group and China Huadian Corp. - have access to generous government subsidies for new energy exploration, and competition among them is intense.
