China needs turbine ‘commando teams’ to beat a wind power deadline

Offshore wind example Source: iStock/MiseriN

With just two weeks to go before a year-end deadline for subsidies, China’s massive utilities are pulling out all the stops to finish offshore wind projects on time.

Power giants have retrofitted offshore oil service vessels with turbine-hoisting cranes and set up “special commando teams” working 24 hours a day to connect to the grid in time. And it seems to be working – BloombergNEF expects a record of about 10.6 gigawatts to be finished, up from a midyear forecast of 7.8.

Still, as many as 6 gigawatts of projects that are either under construction or have received financing will likely miss the deadline, according to BNEF. And the difference is massive – projects that receive the subsidy will earn 850 yuan ($134) per megawatt-hour, while those that don’t will end up with about half that. 

“If a project misses the subsidy, the short answer is they’re going to lose a lot of money,” said Leo Wang, an analyst with BNEF. “For many developers that’s a dealbreaker.”

That’s why State Power Investment Corp. set up a “wind turbine hoisting special commando team” that managed to raise six units in a day and 48 in a month to get an 800-megawatt farm online off the coast of Rudong just north of Shanghai, according to a post on the provincial government’s website.

One impediment to installations has been a lack of ships designed to hoist the 100-metre-tall towers aloft. Companies have brought in extra vessels from overseas, and in some cases converted offshore oil and gas service boats by outfitting them with cranes for onshore turbines to do extra work, Wang said. 

Efficiency has also improved. Vessels are averaging about 50 to 60 installations a year, up from about 30 to 40 just a year or two ago, Wang said. Some projects also shared vessels with others in the same region to increase efficiency, Wood Mackenzie Ltd. analyst Xiaoyang Li said by email. 

The world had a total of less than 36 gigawatts of offshore wind turbines at the end of 2020, meaning China’s massive binge will increase the fleet by more than a quarter. It will nearly double the country’s capacity, according to BNEF data.

While the subsidy sunset means offshore wind installations will inevitably slow next year, the industry improvements and cost reductions in turbines are good signs for continued long-term growth. Analysts at Wood Mackenzie on Wednesday lifted their forecast for China’s offshore wind additions through the end of the decade by 13 gigawatts over their previous outlook.

“Rapid growth in power demand driven by China’s industrial sector and the recent power shortage in September sparked China’s determination to accelerate the development of renewable energy,” research director Luke Lewandowski said in a report.

© 2021 Bloomberg L.P.

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