China's National Energy Bureau (NEB) is drafting new regulations to standardize the examination and approval of small wind farm projects, industry sources said.
According to the rules, estimated to be promulgated in the first half of this year, local governments must first win approval of the NEB before they give licenses to wind farm projects that are smaller than 50MW each.
This move will cool down China's wind power industry that has become overheated in recent years, industry experts said.
At present, China's local governments have the power to approve wind farm projects smaller than 50MW each in installed capacity, after they put the projects on record with the National Development and Reform Commission (NDRC). Wind farm projects larger than 50MW each shall be approved by the NDRC.
To have their projects approved by local governments, which are easier and faster than the approval of the central government, some wind farm operators segment their wind farm projects into multiple stages, with each smaller than 50MW. As a result, China has countless 49.5MW wind farms across the country.
To date, only about 10 percent of the 60GW wind farm projects reported by local governments are examined and approved by the NDRC.
Those projects not approved by the NDRC will possibly not be included in the national plan for grid-access. It is one of the important reasons why the grid and wind farms do not develop in harmony.
Since they are not brought into the overall development plans of the grid, many wind farms approved by local governments have to put wind turbines idle from time to time.
So far, about 30 percent wind turbines are not connected to the grid in China.
A senior official with Longyuan, China's largest wind farm operator, said that the random approval of wind farms by local governments makes some wind farm operators transfer the rights of constructing wind farms at higher prices as soon as they have the approval. In the end, the companies with real intentions of investing in wind power have to pay higher costs.
Wang Haisheng, a senior analyst with Huatai United Securities, said the new regulations will be able to standardize local governments in examining and approving wind farm projects.
"This will cool down the fever of wind power development in China," Wang said.
"This is in harmony with the government's keynote to develop wind power in the next five years that pays higher attention to the quality than quantity."