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BEIJING (XFN-ASIA) - Representatives from a number of foreign wind power firms have expressed concern that the Chinese regulatory environment is hindering their progress in the industry and damaging the country¡¯s renewable energy prospects.
At a seminar held in Beijing by the European Chamber of Commerce, the representatives said that restrictions on the foreign ownership of Clean Development Mechanism (CDM) projects, along with regulations forcing developers to source at least 80 pct of their equipment from China-based firms, are slowing the growth of the industry in China.
All CDM projects should be 51-pct owned by a Chinese partner, according to government rules.
The representatives noted that despite the massive potential of wind power in China, the industry was being held back because of the government¡¯s insistence on promoting domestic firms.
There are now more than 50 domestic equipment suppliers, many of which are selling turbines and other components that do not meet international standards, they said.
Calling for the creation of a ¡¯level playing field¡¯ in which companies from home and abroad can compete fairly, foreign companies also urged the government to consider a fixed ¡¯feed-in tariff¡¯ system that would provide greater incentives for project developers and allow them to compete effectively.
At present, China uses a tendering system to determine which company gets to build a wind farm.
Because one of the criteria of the tender is the price of electricity, developers are forced to undercut one another by offering lower prices.
This is one of the reasons why many foreign companies are reluctant to enter the Chinese market, said one foreign company manager.
Chen Deming, vice-director of the state regulator, the National Development and Reform Commission, said recently that the bidding system was the only way the government could ensure a gradual fall in costs.
In the short term, setting a fixed price for wind-generated electricity would not be the most effective solution because the ¡¯technological conditions¡¯ were not yet appropriate, Chen said. The costs varied according to location and season, he noted, and the pricing system had to reflect that.
He also said that the policy stipulating that 80 pct of wind power equipment be produced domestically was also aimed at reducing costs.
¡¯If we want to reduce the cost of wind power, we need to use relatively advanced and relatively cheap equipment, and if we are using just expensive foreign equipment, that won¡¯t be possible,¡¯ he said. wind turbine,wind energy,wind power,wind generator ,wind generators,wind turbine
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