China sets tariffs for offshore wind power generators

BEIJING, June 19 Thu Jun 19, 2014 4:10am EDT

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BEIJING, June 19 (Reuters) - China's power grids will pay 0.75-0.85 yuan ($0.12-0.14) per kilowatt-hour for electricity produced by offshore wind turbines, the country's state planning agency said on Thursday in a bid to encourage more investment in the sector.

The National Development and Reform Commission (NDRC) said in a notice on its website (www.ndrc.gov.cn) the on-grid tariff would be paid to wind farms completed and put into operation before 2017.

Prices for projects launched after 2017 will be adjusted in accordance with technological improvements and changes in costs, the NDRC said.

China has used variable tariffs to encourage cleaner power generation. Last year, it set a benchmark tariff of 0.43 yuan per kilowatt hour for nuclear power, and also raised tariffs for coal-fired power plants that had installed clean technologies.

Analysts with China's CI Consulting, an industrial research firm, said in a note that while the new price would not completely cover the current costs of offshore wind installation, it would ease worries that electricity generated by offshore wind power would be refused by the grid.

The NDRC notice said the policy was designed to encourage the development of China's rich offshore wind resources. Offshore capacity stands at just 400 megawatts at present, amounting to less than 0.5 percent of China's total wind capacity.

China's total installed wind capacity stood at 82.27 gigawatts by the end of May, up 23.1 percent on the year and amounting to 6.6 percent of the national total. ($1 = 6.2090 Chinese yuan) (Reporting by David Stanway; Editing by Joseph Radford)

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