Offshore Wind Worldwide 2022 edition - Flipbook - Page 30
30
C. Summary of key aspects
To support the growth of electricity demand
and to accelerate its energy transition
process, China’s power supply has witnessed
a significant trend on integrating renewable
energy to replace fossil fuel, especially coal.
Offshore wind power projects are expected to
witness a stable growth in the next years.
The regulatory framework for offshore wind
power projects in China is particularly
challenging because it is comprised of a
complex set of rules at the national and local
level (sometimes inconsistent with each
other) and requires the developers to go
through many formalities with multiple
authorities at different stages of
development. One important point to note is
that there is a deadline within which
construction of the project must be
commenced after having obtained the
project approval, otherwise the authorities
can revoke the project approval and the right
of use of the sea areas. Additionally, there is
a mandated purchase system whereby the
power grid company is required to purchase
the entire output of the offshore wind power
plants connected to its grid.
The Chinese government is reducing the
tariff and subsidies for offshore wind power
projects. The Renewable Energy
Development Fund set up by the Ministry of
Finance (MOF) provides subsidies for
offshore wind power projects but such
central government’s subsidies are in the
process of being faded out. The MOF, the
NDRC and the NEA issued the Several
Opinions to Promote the Healthy
Hogan Lovells
China
Development of Non-Aqueous Renewable
Energy Power Generation on 20 January
2020, and a supplemental notice on 29
September 2020 (Healthy Development
Opinions), stipulating that the central
government does not make subsidies
available to newly installed offshore wind
power projects, except for the existing
offshore wind power projects which have
obtained the required project approvals and
for which grid connection has been
completed prior to 31 December 2021, which
made developers rush to get their wind farms
connected to the grid before the cut-off point
for subsidies and partly explains the recordhigh offshore wind power installed capacity
in 2021.
The participation of foreign developers in the
Chinese market has been quite limited to
date but it is expected that China will
encourage foreign developers to participate
in this market to make offshore wind power
projects more sustainable and competitive
and allow the Chinese government to reach
its ambitious goal of achieving carbon
neutrality by 2060. For example, on 20
November 2021, a foreign-invested offshore
wind power project started supplying
electricity to the grid (the 200 MW Dongtai
V offshore wind farm, participated by the
EDF Group). As the location of offshore wind
farms is moving increasingly further from
shore, foreign developers with a good track
record in the development of projects in deep
water and far into the sea may have a
significant competitive advantage compared
to local players.