Offshore Wind Worldwide 2022 edition - Flipbook - Page 41
Offshore Wind Worldwide 2022
IV. Offtake issues
A. O
fftake, remuneration
and tariff scheme
As explained above in section II.C., the Grid
Company is required to purchase the entire
output of the offshore wind power plants
connected to its grid. For this purpose, the
Grid Company and the developer of the
offshore wind power plant enter into a PPA
after the construction of the plant. The PPA
is drafted using the standard forms
published by the NEA and the State
Administration for Industry Commerce (the
predecessor of the SAMR), which
recommend that the Grid Company and the
developer sign a framework PPA agreement
applicable for a fixed period and a separate
PPA annually.
The price at which the electricity is sold to
the Grid Company is fixed during an initial
period at the price set through the
Competitive Allocation Scheme; thereafter, if
the province sets a lower benchmark tariff
after the project is implemented, the tariff
under the PPA is automatically reduced to
the benchmark tariff of the province.
The plant receives the whole amount of the
On-Grid Tariff (including the Premium)
from the Grid Company, and the Grid
Company in turn applies to receive the
reimbursement of the Premium from the
Renewable Energy Development Fund.
Distributed offshore wind power projects are
allowed and encouraged by the Interim
9
41
Measures on Development and Construction
of Distributed Wind Power Projects issued
by the NEA and effective on 3 April 2018,
although they are rarely seen in practice.
B. Consequences of a project delay
As stated above in section II.D., the Local
NEA revokes the Project Approval and the
Local SOA revokes the Certificate of Use of
Sea Areas if the construction of the project
(i.e., the construction of the foundation of
the first WTG) is not commenced within a
specified time period after having obtained
the Project Approval.
In accordance with the Wind Power Interim
Measures, the PPA is usually entered into
between the developer and the Grid
Company after the completion of the
construction of the offshore wind power
plant. Therefore, the PPA may not deal with
the consequences of delays in the
construction of the project.
C. Examples of actual and future tariffs
The Bid Tariff for the first offshore wind
power project awarded under the
Competitive Allocation Scheme in Fengxian
site, Shanghai Municipality on 12 September
2019 is RMB 0.7388/kWh,9 which is lower
than the Guiding Wind Power Tariff. A
slightly higher Bid Tariff was awarded for
subsequent offshore wind power projects in
2019, as reflected in the trends illustrated
below. However, it is expected that the Bid
Tariff may actually decrease in the long term
given that the Bid Tariff cannot exceed the
Guiding Wind Power Tariff and the Chinese
“The Results of Competitive Allocation for Fengxian Offshore Wind Power”, published by Shanghai Development and Reform Commission
on 28 August 2019 (http://fgw.sh.gov.cn/gqgg/20190828/0025-36568.html).