Chinese offshore development blows past U.S. (09/07/2010)

Do we want to cede this..our loss. I got this from NRDC
Matt

Manuela Zoninsein, E&E China correspondent

As proposed American offshore wind-farm projects creep forward —
slowed by state legislative debates, due diligence and environmental
impact assessments — China has leapt past the United States,
installing its first offshore wind farm.

Several other farms also are already under construction, and even the
Chinese government’s ambitious targets seem low compared to industry
dreaming.

“What the U.S. doesn’t realize,” said Peggy Liu, founder and chairwoman
of the Joint U.S.-China Collaboration on Clean Energy, is that China
“is going from manufacturing hub to the clean-tech laboratory of the
world.”

The first major offshore wind farm outside of Europe is located in the
East China Sea, near Shanghai. The 102-megawatt Donghai Bridge Wind
Farm began transmitting power to the national grid in July and signals
a new direction for Chinese renewable energy projects and the
initiation of a national policy focusing not just on wind power, but
increasingly on the offshore variety.

Moreover, “it serves as a showcase of what the Chinese can do offshore
.. and it’s quite significant,” said Rachel Enslow, a wind consultant
and co-author of the report “China, Norway and Offshore Wind
Development,” published in March by Azure International for the World
Wildlife Fund Norway.

Planned to strategically coincide with the World Expo in Shanghai,
which is being fed electricity from the offshore farm, China is ready
to show the world what its own homegrown wind technology can do.

All of Donghai Bridge’s 34 turbines, 3 MW capacity each, were built by
Sinovel Wind Group, China’s largest wind turbine manufacturer, though
designed in cooperation with American Superconductor. The Beijing-based
company began building the farm at the mouth of the Yangtze River Delta
in September 2008. CCCC Third Harbor Engineering Co. Ltd., also based
in Beijing, installed the turbines, completing construction in February
2010. Shanghai’s Zhongtian Technologies Submarine Optic Fiber Cable Co.
Ltd. manufactured the 78 km of submarine cable.

Powering 200,000 households while reducing CO2

In China, one key challenge will be developing foundations for the soft
seabed commonly found off the coast of the East China Sea, especially
since “most offshore wind farms that will be developed in China will be
intertidal,” said Gerald Page, managing director of Equinox Energy
Partners, a venture capital firm in Beijing.

The $337 million project, located 8 to 13 km (about 5 to 8 miles) from
the coast, was erected on soft seabed conditions using a multi-pile
foundation structure. About eight to 10 legs are placed on concrete
piles, on top of which are stacked a concrete tack and then the
turbines. Shanghai Investigation, Design and Research Institute
conceived the foundation.

During low tide, the turbine foundations are exposed; during high tide,
they become submerged in about 5 meters (16 feet) of water. Unlike in
Europe, which is much more focused on developing deepwater (greater
than 50 meters, or 164 feet, deep) turbine technology, China is
exploring unique foundation technology and demonstrating innovative
pursuits.

The farm is expected to eventually generate an annual 267 million
kilowatt-hours of electricity — enough to power 200,000 Shanghai
households. China’s government claims that annually, the wind farm will
cut use of 100,000 tons of coal, reducing carbon emissions by 246,058
tons.

Currently, the wind farm’s capacity is equivalent to only 1 percent of
the city’s total power production of about 18,200 MW, which is
generated mostly from traditional fuel-based sources, according to
China Daily, the state-run English-language daily newspaper in Beijing.

Construction of the Donghai project’s second phase, on the west side of
the bridge, has been approved by authorities. It, too, is projected to
produce about 100 MW. An additional four farms surrounding Shanghai are
currently under negotiation, and the city hopes to complete 13 wind
farms by 2020, with the majority of the expected 1,000 MW capacity
supplied by offshore wind farms.

An industry’s itch to expand

The “Development Plan on Emerging Energies” released July 20 outlines
wind production goals through 2020 by the Chinese government.

According to the plan, offshore wind power is expected to reach 30
gigawatts, and coastal provinces were required to start drafting
offshore wind-grid implementation plans. This includes Liaoning,
Shandong, Jiangsu, Shanghai, Zhejiang, Fujian and Guangdong provinces.
In the next three to four years, according to the Azure-WWF report, in
total, 514 MW should be installed along this coastline. As of March
this year, pipelines accommodating 17 MW were already installed between
Donghai and a pilot wind project in Bohai Bay near Tianjin.

The expected long-term cumulative pipeline, at 13.7 GW, is nearly
halfway to the estimated 2020 goal, but this doesn’t necessarily mean
that the Mandarins are fully behind renewable technologies and warmly
welcoming a greener future.

“The top-level people are cautiously optimistic,” explained Andrew
Grieve, a senior researcher at J Capital Research, an equities research
company based in Beijing. “They are far more optimistic on the local
and provincial level.”

Behind closed doors, industry insiders hear buzz and speculation that
coastal provinces’ plans far exceed the existing Chinese central
government’s plans.

Grieve stressed that the real force for wind comes from manufacturers
that are itching to expand the market. “Comparatively speaking,” he
said, “the central government is the most conservative of the lot.”

All this is without official numbers, as the 12th Five-Year Plan (for
the 2011-2015 time period) has still not been formally unveiled. It
remains in final draft form, and though the original release date was
slated for March, approval keeps moving backward. Analysts expect the
implementation date should, at the latest, arrive on Jan. 1, 2011.

The central government’s aim was to hit 10 GW by 2010, a goal that was
quickly surpassed.

“Industry is either going to take their number and beat it, or
government is going to have to step in and calm down growth,” Grieve
said. Rumors support the latter, but given historical trends, the
former would seem more likely.

The Azure-WWF report describes the offshore wind energy generation
potential in China as huge — calculated as 11,000 terawatt-hours,
similar to that of the North Sea in western Europe.

“China has the largest wind resources in the world, and three-quarters
of them are offshore,” Barbara Finamore, director of the Natural
Resources Defense Council’s Beijing office, told Scientific American.

The existing industry is nowhere near that large. As Grieve explained,
“apart from the 1 gigawatt of bids this year, there are no central
government national targets for offshore wind, although possible
national targets of 5 gigawatts by 2015 and 30 gigawatts by 2020 have
been suggested.” The provincial government-proposed provincial offshore
development plans amount to 10.2 GW by 2015 and 22.7 GW by 2020.

The growth in China’s wind manufacturing market remains focused on the
domestic market — for now. Dheeraj Choudhary, who runs Parker Hannifin
Corp.’s Global Renewable Energy business unit, said “60 to 70 percent
of wind turbine market growth has come from domestic manufacturers, and
not the international guys.”

Joanna Lewis, an assistant professor of science, technology and
international affairs at Georgetown University who works as a China
program adviser to the Energy Foundation, agreed: “No one has nearly as
much capacity [as China] installed in the world.” As a result, there is
still “very strong demand for wind turbines in China, and they’re not
at stage where supply exceeds demand.”

Eyeing markets abroad

Talk to wind turbine and technology experts and manufacturers, and they
see a day not too far off when Chinese-produced (and in some cases,
Chinese-invented) turbines will service foreign markets.

Anthony Fullelove, project manager for North Brown Hill Wind Farm,
based in Sydney, Australia, expects that his country, as well as Europe
and the United States, will see a sharp increase in turbines sourced
from China — as the technology rises to meet global standards and
prices drop — to make wind farms viable especially in a generation
sector without a carbon price.

“Turbine manufacturers in China are starting to look for markets abroad
upon seeing Chinese market getting tighter and tighter, with more
companies selling in China,” Lewis added.

For the time being, Chinese manufacturers still work hand in hand with
foreign engineers and designers. But that is starting to shift.

“Reliance is much lower,” noted Choudhary. Instead, Chinese
manufacturers look to foreign companies to provide subsystems and
components. All of China’s top five turbine manufacturers have worked
with foreign engineers yet retained the intellectual property rights on
the technologies.

Meanwhile, as China moves forward with installing water-based wind
farms as well as developing its domestic technological know-how, not a
single offshore wind turbine is in use in the United States.

Though the 130-turbine Cape Wind project, in Nantucket Sound off the
coast of Massachusetts, has received federal approval, several
potential regulatory and judicial hurdles lurk. Similarly, the Rhode
Island Public Utilities Commission recently approved a power purchase
agreement proposed for the Block Island farm off of Rhode Island, which
would start with an initial eight turbines as a model, yet Attorney
General Patrick Lynch (D) has vowed to appeal the decision to the state
Supreme Court.

When discussing the creation of an Atlantic Offshore Wind Energy
Consortium in February, U.S. Interior Secretary Ken Salazar said it
currently takes seven to nine years for offshore wind project to
receive approval. At this point, Cape Wind is moving into its 10th year
of negotiations.

In comparison, China’s Renewable Energy Law was implemented in January
2006. By November 2007, the Bohai model turbine was installed. So
important was the Donghai farm to the Chinese Communist Party, it
footed the bill to ensure the project would be completed in time for
Expo 2010 in Shanghai, during which time China has the eyes of the
whole world watching

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