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China pushes wind power.

China will order its dominant electricity distributors to source up to 15 per cent of their power from renewable energy including wind, but slow compliance means it may be years before the country's struggling wind power developers benefit, industry executives say.

The quota system will apply to State Grid Corp of China and China Southern Power Grid Co Ltd by the end of this year, the executives say.

China boasts the world's largest wind power capacity, but a third of it sits idle as renewable energy is a money-losing business for grid operators and network construction has lagged capacity expansion. As a result, China struggles to transmit electricity from generating zones in the northwest, north and northeast to population hubs in the south and east.

"With the roll-out of the quota system and acceleration of grid construction, the problem of distributors holding back on wind power purchases will ease," said Hu Yongsheng, president of China Datang Corp Renewable Power Co. But until China reforms a pricing policy that makes selling wind power and other renewables like solar energy unprofitable, the country's grid operators have little commercial incentive to follow the new quotas.

That means wind power developers such as China Longyuan Power Group Corp and Huaneng Renewables Corp will continue to struggle.

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Publication:Oil & Gas News
Geographic Code:9CHIN
Date:Sep 17, 2012
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