① The three ministries and commissions jointly issued the “Notice on Organizing and Implementing the “Thousand Villages to Harness the Wind” to directly address the pain points of the original industry and comprehensively accelerate the promotion of wind power to the countryside; ② The potential development space for decentralized wind power in rural areas may reach 1,000 GW, which will effectively complement onshore wind power installations after acceleration.
Financial Services Association, April 7 (Editor: Feng Lin) Recently, the wind power direction has once again ushered in major benefits. The National Development and Reform Commission, the National Energy Administration, the Ministry of Agriculture and Rural Affairs, and the three ministries jointly issued the “Notice on Organizing and Carrying Out the “Wind Management Action in Thousands of Villages”, which may be expected to open up incremental space in the distributed wind power market and accelerate the overall cycle reversal of the industry.
Policies increase direct industry pain points
In recent years, the policy side has been actively promoting the decentralized development of wind power. However, due to restrictions on the approval process, land expropriation and use, and economy, the full implementation of the support policy has been delayed. Now, the three departments have jointly issued a “Notice” to directly attack the above industry pain points.
Optimized approval mechanism: In the past, decentralized wind power processes were similar to centralized ones. They needed to go through complex processes of research, planning, site selection, wind measurement, investigation, and approval. Land ownership involved many units, and approval was complicated. The “Notice” encourages exploration of filing systems; the same village and neighboring villages can unify preliminary formalities, and non-sensitive regional projects can be processed expedited.
Secure land for wind power projects: Clarify land for rural wind power projects that do not occupy pressure on cultivated land, do not change surface morphology, and do not change land use, and explore the acquisition of land through leasing, etc. Encourage the promotion and use of land-saving techniques and land-saving models that cover a small area, do not change surface morphology, and do not damage the cultivated layer
Clarify electricity consumption, electricity prices, and consumption issues: Wind power projects are connected to the grid on a guaranteed basis, with local consumption nearby as the main focus. Feed-in tariffs are implemented in accordance with the new energy feed-in tariff policy of the year when connected to the grid. Participation in market-based transactions is encouraged. Electricity participating in market transactions does not participate in ancillary service cost sharing.
Innovative revenue distribution mechanisms: Encourage exploration and formation of a new model of “co-construction and sharing” rural energy cooperation through land use rights investment and the establishment of public service jobs to ensure collective income growth. On the financial side, it is clear that support for rural wind power projects will be further strengthened in terms of financing, loans, etc.
Decentralized wind power is expected to usher in a sharp rise in volume and price
Judging from the market space forecast, according to data from the Ministry of Housing and Construction, China had 478,000 administrative villages at the end of '22. If 100,000 villages with conditions are selected, an installed capacity of 2,000 GW can be achieved according to 20MW installed capacity estimates in a single village (the potential for development resources in the Middle East and South China low wind speed resource region exceeds 3000 GW), which will effectively complement land wind demand.
Furthermore, the sharp drop in wind power costs in recent years and technological innovation have effectively solved the problem of wind power costs and resource development thresholds. Currently, the cost of decentralized wind power in the south-east region has exceeded 5 yuan/w. According to the number of hours generated between 2200-2500H and the electricity price of 0.4 yuan/kwh, the yield is also impressive. Overall, decentralized wind power is expected to replicate the growth path of distributed photovoltaics to a certain extent and further open up space for wind power growth.
Specifically, as far as the industrial chain is concerned, wind power can be broadly divided into segments such as complete machines, towers, blades, castings, and forgings, transformers, distribution networks, etc. The overall valuation level of the industry is still at a relatively low level. However, judging from the market performance in the last month, the direction of transformers, castings, and blades is relatively strong. There is also continued attention to whether the rest of the segments will see if they can make up for the increase.
