Hogan Lovell OffshoreBook 2023 230809 OnlinePDF - Flipbook - Page 61
Offshore Wind Worldwide 2023
Additionally, the grid connection and despatching agreement requires the Grid Companies to ensure the timely connection to
the grid and the stable operation of the grid,
and provides corresponding liabilities for the
Grid Companies in the event of a breach of
such obligations. In particular, according to
the latest available template of grid connection and despatching agreement applicable
to wind power projects, published in 2021, if
the Grid Companies cause delays or disruptions to the GCS, they are liable to compensate the wind power generation companies
for the direct economic losses, facility repair
costs and other direct losses suffered as a
result of the delay or disruption. Nonetheless, this is a template agreement and Grid
Companies and wind power generation
companies are allowed to supplement or
revise its terms through negotiation.
5.5 Onshore grid congestions,
prioritisation of renewable energy
resources and compensation
mechanisms
The curtailment of wind power energy production has been an issue for the wind power
industry in China, especially for onshore wind
power in northern areas of China. Scholars
suggested there are institutional causes
behind the scene (different from power congestions caused by the excessive production
of energy from conventional sources). In
particular, there is lack of co-ordination in the
administration of the Chinese electric power
system, meaning that there are severe co-ordination problems among multiple players,
including central and local governments, Grid
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Companies, wind power generation companies and large electricity consumers, and that
lack of co-ordination results in transmission
constraints, system imbalances, as well as
overcapacity, ultimately leading to wind power curtailment.20
So far, several regulations have been promulgated to mitigate this issue, such as
the Measures for the Administration of
the Guaranteed Full Purchase of Electricity
Generated by Renewable Energy Resources
in 2016, the Circular on Administrative Tasks
for the Guaranteed Full Purchase of Power
from Wind and PV Power Generation in 2016,
and the Implementation Plan to Solve the
Problem of Wind, Water and PV Power Curtailment in 2017. The Implementation Plan,
in particular, introduced several measures
to reduce curtailment of renewable energy
power, including implementing renewable
energy consumption quotas, promoting renewable energy power market transactions,
and enhancing power transmission capacity,
setting an ambitious goal to resolve the issue
of curtailment by 2020. However, curtailment
primarily affects the onshore wind power
industry due to the fact that onshore wind
power is produced mainly in Northern areas
while the power is mainly consumed by end
users in the Middle Eastern and Southern
areas. Offshore wind power, in contrast, is
less impacted by curtailment issues because
it is closer to the main power consumption
areas.
20 "Fixing Wind Curtailment with Electric Power System Reform in China", published by Brookings-Tsinghua Centre for Public Policy on 9 April 2018
(https://www.brookings.edu/wp-content/uploads/2018/04/fixing-wind-curtailment-with-electric-power-system-reform-in-china.pdf).
