Chinese developer investing €5.7 billion in 3 GW of offshore wind, construction starts this month

Renewable energy arm of a major Chinese project developer has revealed its decision to invest more than €5.7 billion in new offshore wind farms on which construction will start as soon as this month. The projects will bring a total of 3 GW of new offshore wind capacity to the country that is leaping forward with erecting wind turbines at sea and is set to overtake the top spot from the world leader the UK.

According to the latest update on the Shanghai Stock Exchange from China Three Gorges Corporation’s (CTG) renewable energy company China Three Gorges Renewables Group, CNY 41.17 billion (approximately €5.72 billion) will be poured into three new offshore wind farms, each with a capacity of 1 GW.

The projects include China Three Gorges Yangjiang Qingzhou Five, China Three Gorges Yangjiang Qingzhou Six, and China Three Gorges Yangjiang Qingzhou Seven. The wind farms, set to be built off Shapa Town in Yangjiang City’s Yangxi County, Guangdong Province, are the first batch of ultra-large-scale deepwater offshore wind projects to be constructed in the country, according to the developer.

The wind turbines making up Yangjiang Qingzhou Five will be installed at a site located 71 kilometres from shore, in water depths ranging from 46.5 to 52.5 metres. Yangjiang Qingzhou Six will be built 52 kilometres offshore, in water depths of between 37 and 46 metres, while Yangjiang Qingzhou Seven will be located 85 kilometres off the coast where water depths reach between 44 and 54 metres.

China Three Gorges Renewables Group plans to start with first offshore construction works this month and have the Qingzhou 6 project connected to the grid at full capacity in June 2024, with Qingzhou 5 and 7 following suit six months later.

In China, the on-grid electricity price for new projects as of 2021 will be based on the local coal-fired power generation benchmark price, which is currently at CNY 0.453/kWh (approx. €0.063/kWh) in Guangdong, according to CTG Renewables.

The new tariff policy soon entering into effect has pushed offshore wind developers in China to accelerate building their projects and hooking them to the grid, which lead to several projects making headlines lately with announcements of full commissioning and the country soon to pass the UK and take the lead in terms of installed capacity.

However, even after the cancellation of state subsidies, CTG’s Qingzhou projects will still be economically feasible, the developer said, citing three main reasons why its new offshore wind farms could achieve parity on the grid: resource and technological advantages, project cost reduction, and large-scale development.

Firstly, wind speed at the locations where Qingzhou 5, 6, and 7 will be built is about 8.5 m/s and with 8 MW, 11 MW, and 12 MW wind turbines used, the number of power generation utilisation hours amounts to between 3,600 and 3,900, which greatly compensates for the adverse impact of the drop in on-grid power prices on the projects’ power generation revenue.

On top of that, the costs of major equipment have dropped, brining lower overall cost for the projects. After the rush to install offshore wind power projects in 2021, the purchase price of wind turbines for the Qingzhou 5, 6, and 7 projects is expected to be significantly lower, according to CTG.

Finally, as the three projects adopt large-capacity wind turbines and large-scale development, this reduces the number of wind turbines required to make up the total project capacity, which consequently reduces tower, hoisting, foundation, installation and management costs.

China Three Gorges Renewables Group is investing in and building the three offshore wind farms through its wholly-owned subsidiary Three Gorges New Energy Yangjiang Power Generation Co., Ltd. The new projects, together with the 2 GW Yangjiang Shapa project that will be soon completed and put into operation, will bring Yangjiang Power Generation’s installed offshore wind capacity to a total of 5 GW.

China Three Gorges put the Yangjiang Shapa Phase 2 offshore wind farm into full operation in November, two years after its predecessor, Yangjiang Shapa Phase 1, delivered its first power.

In July, CTG announced that its Shapa offshore wind project, having a total of five phases, had surpassed an installed capacity of 1 GW, making it China’s first gigawatt-range offshore wind farm.