Research On The Wind Power Generation Costs And Related Industrial Policies In China

With the imminent depletion of fossil fuels, development of new energy is a common topic of human. As a new energy, wind power has its own unique advantages. In recent years, China's wind power policies promote the development of wind power industry. But the cost of wind power is still much higher than regular energy, if we ignore the government allowance(0.22yuan/kwh), which is about 0.5yuan/kwh in the case of this paper.This paper studied on the factors which influence the wind power generation cost and also had a case study. The factors include construction costs, breakdown maintenance expenses, fixed expenses, interest costs, tax costs, the lifetime of the wind farm, the amount of actual grid electricity and the government allowance. The construction costs, interest costs, tax costs, the amount of actual grid electricity and government allowance have greater impact on the cost of wind power. The innovation of this paper highlighted the interest cost, tax cost, which had been neglected in previous research works.In addition, through sensitivity analysis of cost factors, I found that the factor of actual grid electricity had the greatest sensitivity, and the lifetime of wind farms, the average annual construction cost and amount of government subsidies had the greater sensitivity.This paper argues that the cost of wind power generation has very limited room for cost reduction. The policy recommendations are bellow:1. Improve the domestic rate of turbine-made,; Incentive manufacturers to reduce the cost of the turbine; Make some standars to improve the quality of domestic wind turbine.2. Maintain the taxes and interest rates for a longer time to reduce the tax and capital burden for wind power generation companies. Meanwhile, encourage large state-owned enterprises to enter the wind power industry.3. Make well-developed grid standards for wind power; Promote large-scale wind power enter the existing power grid to increased sales of wind power companies.4. Increased subsidies for the wind power generation companies to make them survive at the beginning of the industry.