‘Historic breakthrough’: China’s installed wind turbine cost drops to one-fifth of the US in green energy race

The installed wind turbine cost in China has hit a record low price, dropping 45 per cent since last year
It is now just one-fifth the equivalent cost in the United States, solidifying China’s place as a global leader in renewable energy

Science

Holly Chik

Published: 2:27pm, 28 Mar 2024

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Wind power is soaring ahead in China, with the installation price of turbines dropping nearly 45 per cent thanks to technological advancements and economies of scale, according to government tender documents.

The figures from one major project in the Gobi desert suggest that China has solidified its place as a global leader in the green energy race, putting it well ahead of the United States, with the installed wind turbine price just one-fifth of the equivalent cost in America.

The installation price is now slightly more than 2 yuan (US$0.28) per watt, significantly cheaper than last year’s lowest domestic price of 3.9 yuan per watt.

The tender documents for a wind power project of 9.1 million kilowatts in Inner Mongolia, the lowest price offered by companies submitting tenders was 2.15 yuan per watt, with the highest being 2.7 yuan per watt – a pattern likely to be repeated across the market.

Meanwhile stateside, the US Department of Energy reported the average installed cost of wind projects in 2021 was US$1,500 per kW, or US$1.50 per watt (10.8 yuan). This marked a drop of more than 40 per cent from its peak in 2010. The costs between 2018 and 2021 stood at around US$1,600 per kW.

In 2022, the average installed cost decreased further to US$1,370 per kW, according to the Land-Based Wind Market Report published in August by the energy department.

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“[It] is partly attributable to the outsized influence of a single large project in our relatively small 2022 plant sample and to the concentration of wind deployment in 2022 in the low-cost regions of Southwest Power Pool and Electric Reliability Council of Texas,” the report said, referring to the two areas where wind power capacity additions were concentrated.

A WeChat public account following and analysing wind power industry news said the lower cost of the renewable energy source in China had been achieved faster than expected.

“The wind power era of 2 yuan per watt has arrived,” it said.

“This is a breakthrough in the history of China’s wind power cost. But whether it can be achieved safely will take time and joint efforts of the industry.”

It said the new low price “poses both a huge challenge and an unprecedented opportunity” to the Chinese wind power industry.

“If successfully implemented, wind power development in the ‘Three North’ region will double in the future,” it said, referring to northwest, northeast and northern China, which are home to more than 90 per cent of the country’s total wind energy resources.

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In a separate study published on Tuesday in the peer-reviewed journal Energy Economics, researchers in China and the US said that China has become “a global leader in renewable energy” with “remarkable growth and transformation” in wind power in the last two decades.

Wind power capacity grew from 4 gigawatts in 2007 to 329GW in 2021, representing a 31 per cent annual growth rate, according to the researchers from the school of economics and finance at Xian Jiaotong University and the China Project on Energy, Economy and Environment at Harvard University.

The scientists found that when there were end-of-year rushes to install wind power before incentives offered by the government expired, electric system reliability was reduced, increasing the annual outage duration.

As for solar power panels, the International Energy Agency (IEA) said the cost of manufacturing a photovoltaic module last year was estimated to be 30 per cent higher in the US than China.

The difference could grow to 100 per cent by 2028, according to the IEA’s Renewables 2023 report.