Experts said a lack of coordination among China's provinces and regions is an important reason why wind farms in North China and Northwest China have been sitting idle. One expert said the economic loss from the idle capacity amounts to 18.3 billion yuan ($2.82 billion) in 2015 alone. There is a lot of room for wind power to grow in China as the country continues to adopt more sources of renewable energy.

A wind farm in North China's Inner Mongolia Autonomous Region in October 2014. Thousands of wind turbines at a large number of wind farms in North China and Northwest China are sitting idle, wasting huge amounts of money. Photo: CFP

Thousands of wind turbines at a large number of wind farms in North China and Northwest China are sitting idle, wasting tens of billions of yuan, according to an account by the National Energy Administration (NEA), China Central Television (CCTV) reported on April 6.

At the same time, some provinces are ramping up efforts to build coal-fired plants.

The situation is a result of a lack of coordinated development, experts said. However, wind power, a form of "new energy," still has a good future in China, as the country continues to improve its energy mix in the fight against global warming.

Under the direction of power authorities, the wind farms in several of China's wind-rich provinces have been generating less electricity than they are capable of, according to the CCTV.

In Northwest China's Gansu Province, wind farms saw the loss of 39 percent of wind power that it could have harnessed in 2015, according to CCTV. The figure was 18 percent in North China's Inner Mongolia Autonomous Region and 32 percent in both Northwest China's Xinjiang Uyghur Autonomous Region and Northeast China's Jilin Province.

Competing interests

The situation is so severe that the NEA issued a circular on March 17 asking provincial authorities in areas facing a power supply glut to suspend or delay approvals for new power bases, including those for new energy.

The reason is complex why many wind farms haven't been able to take full advantage of their designed capacity.

The underutilization has resulted from the NEA's inadequate planning and delayed approval for the construction of long-distance electricity transmission network, said Li Qionghui, a senior expert at the State Grid Energy Research Institute, in an interview with CCTV.

The State-owned State Grid Corp of China (SGCC), the world's largest utility by users, operates much of China's power grid. In 2009, SGCC submitted a plan to create a "transmission route" from Gansu's wind farms and other renewable energy sources to power-hungry Hunan Province in Central China, according to a statement the company sent to the Global Times on Monday.

However, authorities did not approve the plan until 2015, causing the construction of the transmission network to fall behind the building of the energy base by two to three years.

For its part, the NEA said it would be best if the electricity generated by wind farms was consumed locally, according to the CCTV report.

The matter is further complicated by the preference of energy-hungry provinces for local coal-fired power plants.

Since December 2014, Central China's Hubei Province and East China's Jiangxi Province have approved 10 coal-fired plants with an installed capacity of 15,300 megawatts.

To put that number in perspective, the Three Gorges Dam in Hubei has 22,500 megawatts of installed capacity, the most of any single power station in the world.

Hubei has planned several coal-fired plants because a major railway line specifically designed to transport coal runs right through it, Xu Yang, a provincial economic planning official, told CCTV. Those power plants will greatly reduce the need for electricity produced elsewhere.

Furthermore, because coal has gotten so cheap lately, coal-fired power plants makes a lot more sense economically, experts said.

"With coal prices near 10-year lows, power companies have showed an interest in building more coal-fired plants," said Qin Haiyan, a wind expert with the China Renewable Energy Society.

"Because of the fat profit margins, power companies can recoup their investment in a coal-fired power plant within five years," Qin said.

The other reason is that local governments have opened their arms to investments in power plants, Qin told the Global Times on Monday.

These investments can significantly boost local GDP, which remains a key gauge of local officials' performance.

Coal-fired power plants also have advocates due to cost issues and the fact that clean coal generation is growing increasingly feasible, said Li Li, director of research at Shanghai-based consulting firm ICIS China.

The CCTV report noted the popularity of coal-fired power plants is strange considering that China's 2005 Renewable Energy Law explicitly stated in its first chapter that renewable sources have priority in the country's power development.

Li said that solving the problem will require coordination across provinces and regions to balance all of the interests involved.

"One aspect that needs greater coordination is conducting a comprehensive study to calculate the economic viability of transporting electricity over long distances," Li told the Global Times on Tuesday.

Wind vs coal

Some experts said some provinces have built too many wind farms. A national climate agenda emphasizing renewable energy sources and policies designed to attract investment have led to overcapacity in the wind power generation industry.

However, wind power expert Qin disagreed. Considering how much power comes from renewable sources in other countries, wind power still has a lot of room to grow in China.

"In Germany, renewable power accounts for 30 percent of total power generation. In Denmark, wind accounts for 40 percent of total power generation. In contrast, wind accounted for only 3.3 percent of total power generation in China in 2015," Qin said.

Qin advocates for wind power over coal-fired power. But lately, the trend seems to be changing.

In the last quarter of 2015, Northwest China's Ningxia Hui Autonomous Region put restrictions on wind farm power generation in an effort to burn more coal for electricity to support the province's struggling coal industry, Qin said, noting the industry accounts for a significant amount of the region's GDP and tax revenues.

Some provinces even cut the price of electricity generated by wind farms or demanded that wind farms pay subsidies to coal-fired power generators.

"Countries like Germany can absorb wind power in their local power grids. China, on the other hand, has to transmit the electricity a great distance from the wind-rich hinterlands to coastal regions," Li said. "China is the first country in the world to do something like this."

Market reforms in the power industry should be advanced because they will benefit the entire society, Qin said.

On March 25, a panel under the China Renewable Energy Society asked local governments in Xinjiang, Gansu as well as Southwest China's Yunnan Province for more transparency and disclosure about the dumping of wind power, Qin said.

Wind power dumping has caused direct economic losses of 53.8 billion yuan ($8.31 billion) from 2010 to 2015, Qin said. In 2015 alone, the loss was 18.3 billion yuan.

"It's not only about wind energy dumping, it's also about the additional burning of coal, which emits carbon dioxide into the atmosphere," he said.