Policy analysis for grid parity of wind power generation in China

Abstract

The “13th Five-Year Plan” for wind power has proposed that it will reach grid parity and compete with power and hydropower. Accordingly, many doubts have been raised. Is the wind power in China already equipped with conditions for grid parity? What is the impact on the development of wind power? To solve these doubts, this study employs a system dynamics model to judge whether China can achieve grid parity for wind power. First, the factor indicator system is constructed from the aspects of wind power production, consumption, and curtailment. Second, the trend of wind power curtailment, cost, revenue, and installed capacity are predicted from 2005 to 2030. Third, three scenarios are set to simulate the impact of grid parity on wind power. Empirical results show that: (1) Net revenue and installed capacity will continue to increase, while the wind power curtailment will gradually reduce. (2) When the subsidy is decreased to 0, revenue will significantly reduce, and the installed capacity will reduce by nearly 1/4. (3) The Chinese government should not abolish all subsidies for wind power to achieve grid parity in 2020. To prompt the process for the grid parity of wind power, some policy implications are proposed.