About 16 percent of the electricity generated by wind farms in northern China went unused in 2011, causing a loss of 6.6 billion yuan ($1.03 billion), the State Electricity Regulatory Commission (SERC) said Thursday.
Unused wind-generated electricity amounted to 12.3 billion kilowatt-hours in northern China's wind farms in 2011, SERC said in a report.
The wastage in wind power was caused by several factors, such as power grid upgrades that have lagged behind the expansion of wind farms, insufficient transmission capabilities and grid connection, and also concerns about the intermittency of wind power, the report said.
China is the world's largest wind power market in terms of installed capacity. More than 85 percent of the country's installed wind power capacity is concentrated in the provinces and regions of northern China, including Gansu, Inner Mongolia and Xinjiang.
"Local governments have ambitions to increase the installed capacity of wind turbines, but they did not consider whether they could be connected to the grid and how much electricity they could transmit," Meng Xian'gan, deputy director of the China Renewable Energy Society, told the Global Times.
For example, in North China's Hebei Province, the installed and approved capacity of wind turbines has reached 14.9 gigawatts (gW), far above the province's original goal of 10.13 gW by 2015.
China's grid operators have struggled to absorb wind power because building transmission lines always takes a longer time than to build wind farms, according to the report. A lack of fiscal stimulus is also a problem, it said.
However, the National Development and Reform Commission approved 131 power generation projects in the first five months of 2012, 95 percent of which are wind power ones, fueling concerns of an increase in the overcapacity problem.
"Policymakers have realized the problem in the wind industry. They did not approve any projects in northern China, and instead approved projects that are mostly in southern China, such as Jiangsu and Guangdong that have large requirements for electric power consumption," Meng said.
China is expected to implement a nationwide quota system in 2013 that could require grid companies to transmit up to 15 percent of their power from renewable energy, China Securities Journal reported in May.
"The policy will encourage grid firms to increase their dispatch of wind power," Song Liang, an energy analyst at the Distribution Productivity Promotion Center of China Commerce, told the Global Times.
"They will increase investment in building smart power grids and high voltage grids, which could absorb more wind power," he noted.
China had 52.58 gW of installed wind turbine capacity connected to the grid by the end of June, and the country aims to increase it to 100 gW by the end of 2015.