What’s new: China Three Gorges Corp. (600905.SH) plans to invest nearly 41.2 billion yuan ($6.47 billion) in building three offshore wind farms in southeastern China’s Guangdong province, the state-owned energy giant said Monday.
Each of the wind farms, planned for the ocean near Yangjiang city, will have capacity to generate 1 million kilowatts of electricity. They are expected to start operation in 2024.
After completion of the projects, China Three Gorges Corp.’s Yangjiang new-energy unit will have total wind power capacity of 5 million kilowatts, becoming the world’s largest offshore wind farm operator.
The background: China has been offering generous subsidies for wind power projects as the world’s biggest energy consumer aims to peak carbon dioxide emissions by 2030 and achieve carbon neutrality before 2060.
With advances in technology and operation, the cost of offshore wind projects has fallen. China has slashed subsidies in recent years and will end them in 2021 to make producers of electricity from renewable sources compete with coal-fired utilities and achieve grid-price parity.
Without central government subsidies, the expected return rate on investments in offshore wind projects will fall to 6% from 8%–10%, consulting group Wood Mackenzie said.
China installed 300 million kilowatts of new wind power capacity in the first 11 months of 2021, according to data released by China Electricity Council, an increase of 29% from the same period last year.
Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (hello@caixin.com)
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