The wind power plant, having investment of 20 billion yuan and planned sea area of 240 square kilometers, has an installed capacity of 1,250 MW.
It will promote the rapid development of China’s offshore wind power industry after construction is completed. It will also be the model base for China’s offshore wind power plants and will stand for a new standard in the industry.
The wind energy project is undertaken by Guangdong Baolihua New Energy Stock Corporation.
China Longyuan to spend $13b to lead wind power league
China Longyuan Power Group Corp plans to spend about 92 billion yuan ($13 billion) over the next five years to become the world’s No 1 wind-power producer as global demand for clean energy increases.
The Hong Kong-listed company aims to install at least 16,000 megawatts of wind turbines in China and overseas by 2015, President Xie Changjun said in an interview after a climate conference in Beijing today.
The expansion plan comes as the Chinese government encourages the use of renewable energy to cut reliance on more polluting coal. The Beijing-based company in December raised a net HK$16.7 billion ($2.2 billion) from the sale of 2.14 billion shares in Hong Kong in the world’s third-biggest IPO by an alternative energy company.
"China so far has used only about 1 percent of its total estimated wind power resources and there is vast potential for future growth," Xie said. "We are also looking at opportunities overseas, including in South Africa, the US, Australia and Europe," he said.
Global investment in renewable energy surged 31 percent in the first quarter from a year earlier, driven by wind power and demand in China, Bloomberg New Energy Finance said on April 12.
China Longyuan ranks fifth globally by wind-power capacity and plans to be third by 2012, according to Xie. The company had 4,503 megawatts of capacity last year and may have 6,500 megawatts by the end of this year, it said in March.
China Longyuan’s shares fell 0.6 percent to HK$7.81 in Hong Kong trading on May 7, the stock’s lowest level since listing. It has dropped 13 percent since its Dec 10 debut, compared with an 8.2 percent decline in the benchmark Hang Seng Index.
China Longyuan may issue bonds in the domestic market to raise funds, Xie said without elaborating. The wind-farm operator’s profit more than double last year to 894 million yuan from 337 million yuan as it expanded capacity, it said on March 30.
China’s domestic wind-power developers may see increased profit because of lower turbine installation costs and government-set fixed tariffs, Xie said. The cost to China Longyuan to erect each kilowatt of wind turbines may fall about 10 percent to 8,000 yuan this year because of "intense competition" in the manufacturing sector, he said.
China, the world’s biggest polluter, burns coal to produce about 80 percent of its electricity and wants at least 15 percent of its energy to come from renewable sources by 2020.
China Longyuan purchases wind turbines from domestic suppliers whose prices are about 20 percent less than those of their overseas rivals, according to Xie. Xinjiang Goldwind Science & Technology Co and Sinovel Wind Group Co are among the largest suppliers to China Longyuan, Xie said.
"If foreign manufacturers want to boost their market share in China, they need to cut costs and reduce prices," Xie said.
The company hopes to see carbon markets set up in China after 2012 to boost renewable energy development, he said.
The Chinese government is considering establishing exchanges for carbon trading in selected areas, as a nationwide market looks unlikely for the moment, Gao Guangsheng, director of the National Coordination Committee Office on Climate Change under the National Development and Reform Commission, said at the conference today. The plans aren’t completed yet, Gao said, without giving details.
The lack of industry professionals may be a challenge for China’s domestic wind-power developers, the executive said today, without providing specifics.
Gamesa charts China entry plans
Spanish wind turbine maker Gamesa is planning to enter China’s offshore wind power sector by the end of next year. Gamesa is currently in talks with a German wind power company for a possible acquisition, and will enter China’s offshore wind power market by the end of 2011 or the beginning of 2012 if the deal goes through, said Jorge Calvet, chairman & CEO.
If the deal does not take shape, the company has an internal plan to enter the sector during the same period, said Calvet. Gamesa plans to bring its advanced 5-megawatt (MW) wind turbine to China, he said.
Meanwhile the company on Monday started building a wind turbine plant at Baicheng city in Jilin province, in line with its plan to tap into the fast growing wind power market in China. The new plant is expected to come on stream in the middle of 2011. It will produce wind turbines with a capacity of 2 MW.
The facility will have annual production capacity of 250 wind turbines in the first phase. Products will be sold to wind farms in Jilin province, the company said in a statement.
"The new plant represents a great opportunity to keep serving our clients as a reliable partner in the province that the government has identified as the one with the highest wind power capacity in China," said Calvet.
China plans to build seven wind power bases, which will have 74 percent of the country’s wind power capacity by 2020. Wind power in Jilin is expected to account for 39 percent of the nation’s wind power capacity by then, 30 percentage points more than now.
Gamesa installed its first wind turbine in China in 2000, and has since sold over 2,000 turbines. The company employs around 1,000 people in the country.
The company’s fast expansion is due to China’s rapid development of wind power. The wind power industry in China has been witnessing annual growth rates in excess of 100 percent in the past four years.
China has chosen the sea off eastern Jiangsu province to build the country’s first batch of offshore wind power projects, according to the National Energy Administration (NEA). Public bidding for the four projects will start later this month.
Construction of offshore wind power projects will be the main focus of China’s wind power industry in the future. As the country boasts rich offshore wind energy resources, China has great potential in this field, said Shi Lishan, deputy director of the new energy department under the NEA.