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Open AccessArticle

The Economics of Wind Power in China and Policy Implications

by Zifa Liu 1, Wenhua Zhang 2,†, Changhong Zhao 2,† and Jiahai Yuan 2,*
1
School of Electrical & Electronic Engineering, North China Electric Power University, Chang Ping District, Beijing 102206, China
2
School of Economics and Management, North China Electric Power University, Chang Ping District, Beijing 102206, China
*
Author to whom correspondence should be addressed.
These authors contributed equally to this work.
Academic Editor: Erik Gawel
Energies 2015, 8(2), 1529-1546; https://doi.org/10.3390/en8021529
Received: 6 December 2014 / Revised: 15 January 2015 / Accepted: 4 February 2015 / Published: 17 February 2015
In 2009, the implementation of feed-in tariff (FIT) and attractive public subsidies for onshore wind farms aroused great investment enthusiasm and spurred remarkable development of wind power in China. Meanwhile, rapid learning-by-doing has significantly cut down the cost of wind turbines and the capital cost of wind farms as well. Therefore, it is the right time to examine the appropriateness of the existing FIT policy for wind power in China. In this paper, we employ the analytical framework for levelized cost of electricity (LCOE) to model the generation cost of wind power. Results show that the existing FIT policy is attractive to investors, but serious curtailment and turbine quality issues could make wind power unprofitable. Meanwhile, rapid substantial decreases in the cost of wind power have made it competitive to coal power in 2013, implying that it is possible and necessary to reform the FIT policy for new wind farms. In the future, energy policies for onshore wind power in China could be concentrated on reducing the integration cost, so as to reduce the overall system cost. View Full-Text
Keywords: wind power; feed-in tariff (FIT); levelized cost of electricity; China wind power; feed-in tariff (FIT); levelized cost of electricity; China
MDPI and ACS Style

Liu, Z.; Zhang, W.; Zhao, C.; Yuan, J. The Economics of Wind Power in China and Policy Implications. Energies 2015, 8, 1529-1546.

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