Many Chinese wind, solar and hydropower plants are unable to deliver all their power to consumers

* Yanan tries lottery to decide which projects go ahead this year

* Grid deficiencies still causing renewable curtailment

* New renewable energy certificate scheme could also cut waste

SHANGHAI, April 18 (Reuters) - The city of Yanan, a major wind power base in northwest China's Shaanxi province, has introduced a lottery system to decide which wind projects will go ahead this year, a sign that grid constraints are forcing local governments to restrict capacity.

China has been aggressively developing alternative power as part of its efforts to cut pollution and greenhouse gas emissions. Grid-connected wind power reached 163.7 gigawatts (GW) last year, up 10.1 percent on the year and amounting to 9.2 percent of total generating capacity.

But capacity expansion has outpaced grid construction, and large numbers of wind, solar and hydropower plants are unable to deliver all their power to consumers as a result of transmission deficiencies, a problem known as curtailment.

According to a Yanan planning agency notice seen by Reuters, the city was given permission to build 900 megawatts of wind capacity this year, but 1,300 megawatts (or 1.3 GW) have already been declared eligible for construction, forcing authorities to whittle down the total number of projects.

"After study it was decided that the lottery method should be used to determine what plans will be submitted (for approval) to the provincial development and reform commission," it said.

The authenticity of the document was confirmed by a local municipal government official. He declined to give his name or provide details.

China aims to raise the share of non-fossil fuels in its total energy mix to around 15 percent by the end of the decade, up from 12 percent in 2015.

But while renewable power has grown rapidly, around 80 GW of wind capacity was still unable to transmit electricity to consumers in 2015. Wasted wind power amounted to around 12 percent of total generation in 2017, according to the energy regulator.

An environmental group is currently suing grid companies in the northwest for failing to fulfil their legal obligation to maximise purchases of local renewable power.

To try to prevent waste, China has drawn up guidelines aimed at preventing new plant construction in regions already suffering from surplus capacity.

It also released draft guidelines last month for a new renewable energy certificate system that will force regions to meet mandatory clean electricity utilisation targets. The scheme is expected to help alleviate curtailment.

(Reporting by David Stanway in SHANGHAI and Meng Meng in BEIJING Editing by Joseph Radford)

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