China installed nearly 18 GW for the second year running, but for the first time in nearly a decade, we didn’t see double or triple digit growth. It seems that the market is entering a consolidation phase, to work out some of the issues created by its tremendous growth. First of all, there is the grid, and the lacklustre efforts of the grid companies to improve the grid infrastructure to keep up with the installations. New planning and operational rules which came into effect in 2011 should help with this, but there is still the matter of political will, and although State Grid’s rhetoric has changed, it seems that its behaviour has not, as of yet. There is also the matter of the substantial manufacturing oversupply, which is a large enough problem to have warranted a mention by Wen Jia Bao at the National People’s Congress in Beijing this March.
China’s offshore target of 5 GW by 2015 seems less likely to be achieved with each passing month; regulatory and siting issues are still problematic. But there is great appetite both on a governmental and industrial level to move forward with this segment, as there is for new developments in lower wind zones in the south and east of the country; both have moved up the priority list as a result of some of the grid and interconnection issues mentioned above. The message seems to be that it’s time to build more wind power closer to the load centers.
The Indian market passed the 2 GW milestone for the first time in 2010, and the 3 GW milestone in 2011. Continued increase in demand and policy priority for renewables has turned India into one of the most dynamic markets in the world. At the same time, the introduction of a new tax code and uncertainty about the future of the tax benefits that have driven much of India’s growth to date are cause for concern.
While the rest of Asia didn’t make much progress in 2011, there are some bright spots on the horizon. The Japanese market is potentially on the verge of a new round of growth, depending on how the debate over the future of the country’s energy sector pans out. While nuclear power is rejected by the overwhelming majority of Japanese, the incumbents are fighting back. This will be clearer once the new feed-in tariff and connection regulations are agreed and enter into force, no later than 1 July. South Korea is also a country to watch, and with major offshore ambitions and improvements to the onshore regulatory regime, wind power will likely play a role in the Korean government’s ‘green growth’ strategy.
Finally, 2012 will mark the commissioning of Mongolia’s first commercial wind farm of 50 MW some 40 km outside the capital city of Ulaanbaatar. While this is a small development, it could be the harbinger of major developments to come: the largest mining operation in the world is being constructed in the southern Gobi desert, where there are no roads, no power and no water. Mongolian officials and the private sector are keen to help supply this operation from Mongolia’s more than 1,000 GW of wind potential as well as its massive solar resources. This potential energy bonanza has attracted the attention of Japanese entrepreneur Masayoshi Son who, through his newly established Japan Renewable Energy Foundation, is spinning out plans for an ‘East Asian Supergrid’ which would, among other things, bring Mongolia’s massive renewable energy resources to market in China, Russia, Japan, Korea and elsewhere.