China needs to change from a wind-power auction pricing system to a feed-in tariff to protect investors in developing renewable energy, the chairman of the Global Wind Energy Council said at a recent conference in Beijing.
"The price volatility and uncertainty caused by the current regulation harms foreign and domestic private manufacturers and developers, who are discouraged by a pricing pressure they cannot sustain," Arthouros Zervo said.
The Inner Mongolia Autonomous Region has China's richest wind power resources, and more than 100 foreign investors showed interest in developing wind farms. But about half of the enterprises gave up the investment plan, and in the end, only about 10 foreign wind companies launched their projects, according to a report in the Chinese newspaper 21st Century Business Herald.
"Most of the enterprises withdrawing from Inner Mongolia have already completed the procedures but still chose to suspend the investment, including Adxia from Switzerland, EHN (Acciona Group) from Spain and the Golden State Group from the Untied States, " the report said.
High cost and a low electricity price are the major barriers for wind power development in China, a study report on the country's pricing policy by the Chinese Renewable Energy Industries Association, Greenpeace and the Global Wind Energy Council showed.
It is also said that the solution depended on either a reduction in cost or at least an increase in the electricity price to cover the existing cost. Wind power is a new and growing industry that needs support, but the current practice of bidding for contracts is in conflict with the aim.