China's installed wind power generating capacity reached 15.85 Gigawatts (GW) by the end of September, up 30 percent from the end of 2008, the official Xinhua news agency reported on Friday.
China's wind power equipment manufacturers are now able to satisfy domestic demand and are expanding their presence in international markets, said Shi Pengfei, vice president of Chinese Wind Energy Association (CWEA) on October 21 at "China Wind Power 2009".
Shi said that the Export-Import Bank of China is prepared to offer credit to support the construction of a wind power project in Africa, enabling China's wind power equipment manufacturers to export wind power generator sets to Africa and construct wind power plants on the continent. At the same time, some relevant Chinese enterprises have acquired overseas rivals or established branches overseas. In summary, China's wind power equipment enterprises are "going global".
Shi noted that enterprises must have a 500,000kW manufacturing capacity in order to have economies of scale. With this standard in mind, 80 wind power equipment enterprises have 40 million kW manufacturing capacity in China. The world's installed capacity increased by 27 million kW in 2008, and is expected to increase by 30 to 50 million kW per year in the future. Due to limited electricity supply, China's installed capacity is expected to increase by 10 million kW this year. Given the growth rate, the potential manufacturing capacity of China's wind power equipment enterprises will clearly exceed market demand.
At the same time, Shi stressed that only wind power equipment manufacturing enterprises and not the whole wind power industry, face a surplus manufacturing capacity. At present, China's wind power plants generate very little electricity. In 2008, the electricity generated by wind power plants accounted for just 0.35 percent of China's total. Li Junfeng, vice director of the Energy Research Institute under the National Development and Reform Commission said that a modest surplus manufacturing capacity is one of the characteristics of a market economy, and only a modest surplus manufacturing capacity can facilitate the elimination of backward enterprises and promote technical progress.
Shi Pengfei added that relevant Chinese manufacturers are now able to satisfy domestic demand, and are likely to expand into international markets in the future. "The localization of China's wind power equipment manufacturing industry has been completed and relevant Chinese enterprises are going global this year. The foreign market requirements and foreign quality standards will also promote the development of China's wind power equipment manufacturing industry."
Gold Wind Science and Technology Company and Xiangtan Electric Manufacturing Corporation Ltd (XEMC) have bought European wind power companies, taking the lead in going global. Wu Gang, board chairman and CEO of the Gold Wind Science and Technology Company, said that the company will increase efforts to expand overseas to gradually transform into an international company. Wu previously said that the company will build wind farms and sell wind turbine equipment in the U.S., but will continue to focus on manufacturing wind turbine equipment. XEMC has bought a Dutch company, with whom it will co-develop five-megawatt wind turbines, and is targeting the European maritime wind power market.
Shi believes that China's wind power enterprises merging with overseas enterprises involves more than a simple acquisition and merger approach; the enterprises actually aim to absorb foreign technologies through purchasing overseas enterprises, or transform into research centers to become international enterprises.
However, Shi added that the wind power industry started developing in China only five years ago. Although China has huge potential to expand production capacity, its ability to independently develop or master new technologies to develop new products is still relatively weak. Shi believes that Chinese enterprises should cooperate with developed countries to jointly develop new products adapting to different wind situations.
Wind power enterprises are also cautious about the transformation into international enterprises. Wu said that Gold Wind's transformation into an international enterprise should be advanced gradually. He believes that a process is required to expand the international market, and enterprises need at least three years to study and grow. During this period, the Chinese market will not experience big adjustments and Gold Wind will continue to focus on the domestic market.
Zhang Guobao, head of National Energy Administration, told a forum that China would work out more policies including technology, fiscal, tax and price incentives, to facilitate better and faster development of the wind power industry, according to the report.
The figure was in line with China's plan to bring its total wind power capacity to 100 GW by 2020 -- part of a broad energy target to generate 3 percent of total electricity from non-hydro renewable energy.
Adding to the new capacity was Jiuquan mega wind power base in the northwest Gansu province with a total generating capacity of 10 GW, which will be completed by 2010.
China has been seeking more clean power to fuel its fast economic growth. The country plans to lift installed wind power capacity to 35 GW by the end of 2011, five GW of which are to be from offshore wind farms.
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