TECO Leads Development of Taiwan?s Wind Energy

Continually developing wind turbine manufacturing, Taiwan-based Teco Electric & Machinery Co., Ltd., perhaps the oldest name in industrial motor making in Taiwan and world’s third-largest industrial motor manufacturer by market share, is seen as the major player in the sector on the island.

Taiwan’s wind turbine industry is literally being spun faster by Teco, which developed Taiwan’s first domestically-made 2MW permanent-magnet synchronous wind turbine motor in 2010 to put the island on the global map of such motor suppliers, and more notably activated the wind turbine motor supply chain on the island. In comparison, the world’s largest capacity wind turbine is the Enercon E-126, rated at 7.58MW when it was introduced in 2007, according to ECOGIZMO online dated Dec. 2, 2010.

The 2MW wind turbine is a product of Teco’s years-long dedication to researching and developing wind turbine engineering, with the chairman Liu Chao-kai noting that, unlike traditional double-fed induction motors, this wind turbine has a permanent-magnet generator, hence boasting better power-supply stability and power generation efficiency, as well as enabling easier maintenance. Teco, the largest wind turbine manufacturer in Taiwan, is the only manufacturer capable of making such mainstream wind turbines in greater China, says Liu.

Teco runs global manufacturing operations, including a wind-turbine factory in Round Rock, Texas, China’s Jiangsu and Fujian provinces, and Taoyuan in northern Taiwan. In the 1990s, Teco bought Westinghouse and later renamed it TECO-Westinghouse Motor Company, which has a plant in Round Rock.

Teco adopts a localized strategy to enter various markets, by making wind turbines in or near the wind farms to ease delivery, so customers are guaranteed prompt maintenance services. The maker also aims to become an integrated, world-caliber provider, handling production, supply and replacement of key components as well as system integration and maintenance. Such strategy also helps local subcontractors to share a slice of the pie, while accelerating wind power development.

Tapping Wind Power in China

Teco is increasingly recognized by Chinese wind power companies for cutting-edge generator technologies and innovative customer services.

The maker announced the partnership with China Datang Corporation Renewable Power Co., Ltd., the second-largest wind farm operator in China, in late September, stressing the two parties agree to explore the Chinese wind power market, with Teco to help install at least 150 units of 2MW wind turbines at the partner’s wind farms in Hebei, Fujian and Jiangxi Provinces, generating over NT$10 billion in revenue for the Taiwanese supplier.

George Lien, a senior executive of Teco’s new business building center, says the partnership achieves synergy to speed their entry into China’s wind power market, and that the two parties will explore overseas markets including Australia and the U.S. in the near future.

G. Yang, director of China Tatang’s overseas business unit, confirmed that the two companies will install 150 2MW wind turbines in Hebei alone, for which Teco plans to set up a dedicated wind turbine factory in the same province, which will hopefully start delivery in the third quarter of next year with annual output of 100 2MW wind turbines; while the construction plan will be submitted to the authorities soon in Fujian.

The two parties may also engage in cross shareholding to strengthen business ties in the future, which market observers say will help ensure the wind farm operator of stable supply of wind turbines and related services, as well as ensuring the supplier of sustainable business development, to which Chinese officials have given the thumbs up.

Bright Prospects
The first 2MW onshore permanent-magnet wind turbine supplied by Teco to China Tatang has been set up in Inner Mongolia, where winds blow at an average of 8 meters/second for 2,500-2,600 hours of 5 million KW/hr capacity a year, estimated to realize for the farm operator income of RMB2.7 million once operational.

Liu says that China Tatang is very satisfied with the quality and performance of the wind turbine, especially when the permanent magnet generator completely meets LVRT (low voltage ride through) requirements, and hence may order another 149 turbines.

Teco’s prospects in renewable energy in China has become brighter since partnering with China Tatang, especially when the Chinese State Council is focused on development of wind power as part of its 12th Five-Year Development Plan. Local news agencies report that China will implement the so-called “New Energy Rationing” this year, aiming to raise the renewable-to-total-energy-consumption ratio in the country through incentives.

China’s determination to bolster industrial development is also evident in the enactment of the 18 new national standards related to wind power to be effective this November, some of which to regulate offshore wind turbine construction and maintenance, wind farm operation and production, quality of wind power generators and key components, and technological requirements for power supply stability.

With local governments heavily promoting wind power, Teco’s recognized wind turbine engineering and partnership with China Tatang will give the Taiwanese company an edge in the market.

Expanding into Vietnam

Teco confirmed in June the Thuan Nhien Phone (TNP) wind farm in Vietnam ordered 30 2MW wind turbines, with 10 of which to be shipped at the end of this year and the remainder next year.

Liu says the order will generate another NT$2-3 billion in wind-turbine revenue, further proving productivity of his company’s move to focus on green energy. Personally signing the contract with the Vietnamese customer, Liu says the TNP is a new wind farm developed to accommodate about 30 2MW wind turbines initially, all of which to be supplied by Teco.

In the short term, wind turbines have become Teco’s third moneymaker following industrial electric motors and household appliances. Having gained solid ground in greater China, Teco will supply 150 to 200 wind turbines in each of the coming few years, says Liu.

Upbeat About Taiwan

Liu is also upbeat about Taiwan’s wind power market, believing the industry output is very likely to exceed NT$1 trillion once wind power engineering matures, and Penghu, archipelagos off western Taiwan to bear specially great potential for wind farms.

Liu says Taiwan’s Bureau of Energy plans to set up two experimental wind farms off the Penghu coast, ownership of which will be transferred to the state-owned Taiwan Power Co. and then a private company. The Penghu coastal area can accommodate 400 5MW wind turbines in a large offshore wind farm with estimated maximum generation capacity of 8 billion KW/hr a year. Based on NT$2 per KW/hr of electricity supplied in Taiwan, the offshore wind farm can generate NT$16 billion in annual revenue, a huge business opportunity for local companies.

Therefore, Liu advises the government to initiate teamwork among state-owned enterprises. For example, the shipbuilder CSBC Corp., Taiwan can build vessels as platforms for construction of offshore wind turbines; CPC Corp., a petroleum refiner, can tap its pile driving technologies for submarine construction; and Taipower can lay submarine cables and transformer stations. Meanwhile private enterprises can play a part to supply wind turbine components as blades, generators and rotors.