Can China’s offshore wind power achieve grid parity in time?

ABSTRACT

Facing an increasing financial burden and declining costs, China plans to phase out supporting policies for renewable energy before 2030. In this context, whether offshore wind power can achieve grid parity by the time the subsidies are eliminated is a great concern for policy makers as well as potential investors. To address this issue, we employ the learning curve framework to analyze the critical conditions under which the key factors of offshore wind power technology should evolve to achieve grid parity in time. Ceteris paribus, to achieve grid parity in 2030, the learning rate needs to be as high as 12.0%, the annual deployment needs to be 5.9 GW, and the capacity factor needs to be improved to 40.7%. The feasibility of achieving these key conditions is discussed, and we conclude that the enhancement of innovative technologies is crucial for offshore wind power to improve its cost competitiveness in a finite time without policy support.

KEYWORDS:

• Learning curve model
• offshore wind power
• grid parity
• policy change
• determining factors

Conflicts of interest

The authors declare no conflicts of interest.

Notes

¹ Although the central government will stop the subsidies in 2020, it is still possible for local governments to withdraw slowly to ensure a smooth transition of the reform.

² Here we eliminate the fluctuation of coal-fired power’s FIT during the period 2015–2017 for simplification.

Additional information

Funding

This research was funded by Economic Research Institute of State Grid Zhejiang Electric Power Co., Ltd. Research Project (grant number SGTYHT/19-JS-218; SGZJJY00JJJS2000148).