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Company and Power China International installations, says Fitch Ratings. Chinese which accounted for around 94% per year,
Group, which have jointly committed over thermal power generators (gencos) remain on average, of the total in 2015-2020. Higher
US$9 billion to the project, are Chinese state- keen to optimise fuel mix, but cost declines onshore wind capacity installations in 2022
owned enterprises. will shape the pace of wind power capacity can be supported by the robust turbine
But in a letter to Fossil Free SA on 9 installations in the long run. tendering of 40.9GW in 9M21, almost tripling
November , China’s ambassador to South China’s offshore wind capacity installations the quantum for 9M20. State-owned thermal
Africa, Chen Xiaodong, confirmed that China may slow from the 2021 peak, as prior- gencos, driven by self-imposed mandates
“will not build new coal-fired projects abroad”. approved central-level subsidies, which to peak carbon emissions ahead of the
The ambassador said: “China is willing account for roughly half of the on-grid tariff, government’s agenda, are taking advantage
to work with all countries, South Africa will be phased out from 2022 onwards. China of the falling wind turbine prices to rapidly
included, to establish and improve a green and plans to expand offshore wind capacity by 5x- optimise fuel mix. The average turbine
circular economic system development system 6x in 2021-2025 from end-2020 levels. Even bidding price dropped by around 26% yoy by
[and] green and low-carbon energy .” so, we expect the remaining installations to end-9M21 and the price decline is continuing.
The MM-SEZ proposals had included be largely backloaded to 2024-2025 because We expect the weight of wind power in
at least 20 industrial plants for processes of concerns on project returns in the absence rated Chinese thermal gencos’ fuel fix (by
including coking, coal washing, a coking of central-level subsidies. By end-2020, the capacity) to rise by around 2pp in 2022, before
plant, ferrochrome and ferromanganese and levelized cost of offshore wind power, which gradually approaching 18%, on average,
stainless steel, and lime and cement plants, had already declined by near-half in the past by 2024. Fitch views such a transition as
powered by a bespoke giant 3GW coal-fired decade, was still twice that of onshore wind credit positive, because renewables have
power station. All these facilities would be power. Onshore wind subsidies were phased dispatch priorities and are not exposed to
very high emitters of greenhouse gases out in full by the end of 2020. fuel cost volatilities. Meanwhile, state-owned
FOSSIL FREE SOUTH AFRICA The economic viability of new offshore enterprises’ strong financing capability can
wind installations after 2021 will hinge on the help to alleviate the debt-servicing pressure
speed of further cuts in levelized cost and, from high capex.
WIND to a lesser extent, the strength of provincial FITCH RATINGS
governments’ potential fiscal support. Many
China’s 2022 wind power offshore wind developers adopted a wait-
and-see strategy, halting turbine tendering
growth to stay strong this year. Public tendering of offshore wind
turbines in 9M21 was only 18% of that in
Strong growth in China’s wind power capacity 9M20, and the market did not see much bids
installations will continue in 2022 despite the coming until September 2021.
complete phase out of central-level subsidies, Nevertheless, we expect China’s annual
as more rapid additions of onshore wind wind power capacity installations to rise in
capacity will offset the slowdown of offshore 2022 on stronger onshore wind additions,

Week 47 24•November•2021 www. NEWSBASE .com P15