Chinese Wind Power Companies Target Global Markets

BEIJING – China’s Goldwind Science & Technology Ltd. is one of the world’s biggest makers of wind turbines – a cornerstone of the booming clean power business – but is unknown outside its home country. By Joe McDonald – Associated Press –

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Goldwind aims to change that. In a Minnesota farmer’s cornfield, the company is erecting three 20-story-tall windmills in its first American project and hopes it will help to woo other buyers.

“There are a lot of leads and we are following them up,” said Kerry Zhou, Goldwind’s director of development. “We certainly expect that by 2011 we can get good results.”

China’s market for wind equipment is on track to overtake the U.S. this year as the world’s largest, spurred by a government campaign to promote renewable energy to clean up its battered environment and curb surging demand for foreign oil and gas.

Now the biggest Chinese manufacturers want to expand to the United States, Europe and other markets. Western suppliers could face new competition as low-priced Chinese rivals seek to profit from global efforts to limit climate change.

Chinese manufacturers could get a boost if officials at this week’s U.N. climate summit in Copenhagen, Denmark, agree on new measures to spread use of clean energy.

Beijing is promoting the industry as part of sweeping efforts to transform China into a creator of profitable technologies. Utilities have been told to step up clean energy spending even as the global crisis cuts into investment elsewhere.

“China is a major player and will dominate the future development of wind,” said Lars Andersen, president for China of Denmark’s Vestas Wind Systems A/S, the world’s biggest maker of wind turbines.

Chinese wind companies’ technology lags behind global leaders such as Vestas and General Electric Co. But their prices are up to 50 percent lower, which industry analysts say should make them competitive abroad.

“The performance-to-price ratio is quite attractive,” said Victoria Li, who follows the industry for Credit Suisse in Shanghai. “I think they could see strong growth from export revenue within two years.”

Last year, China accounted for 22 percent of new global wind capacity, while the United States was 29.6 percent, according to BTM Consult, a Danish research firm. This year, Credit Suisse says China will install up to one-third of new capacity.

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The industry has gotten a boost from a flow of money through the Clean Development Mechanism. The U.N. program allows industrialized economies to meet commitments to reduce greenhouse gas emissions by paying developing countries to cut their own instead. China is the biggest recipient of CDM money.

Chinese demand is so huge that with almost no foreign sales, Goldwind and rivals Sinovel Wind Co. and Dongfang Electric Co. already rank among top global manufacturers.

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Sinovel, Goldwind and Dongfang together made one of every eight wind turbines sold worldwide in 2008, according to BTM. Vestas led global sales with 19.8 percent and GE was second with 18.6 percent.

Beijing-based Sinovel made its first foreign sale last year, shipping 10 1.5-megawatt turbines to India, said a company spokeswoman, Liu Chang. Also in 2008, Goldwind sold six of its smaller 750-kilowatt units to Cuba.

In Minnesota, Goldwind is installing three 1.5-megawatt turbines on a farm in the town of Pipestone. Zhou said the company hopes the site will prove its turbines operate reliably under U.S. weather conditions.

Beijing’s tactics in promoting its suppliers have caused strains in trade ties at a time when other governments are scrambling to preserve jobs.

The European Union Chamber of Commerce in China complains that foreign producers have been shut out of bidding for major wind projects. Beijing also required that 70 percent of parts in turbines used in China be domestically made – a rule that was dropped in September only after major foreign producers had set up Chinese factories.

November’s announcement that a Chinese manufacturer, A-Power Energy Generation Systems, would build a Texas wind farm prompted an outcry from American critics that stimulus money the project might receive should not go to China. A-Power and its American partners said they would open a U.S. factory.

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A-Power Energy Generation Systems builds 750KW, 1.5MW and 2.7MW Wind Turbine Systems under license from Norwin A/S and Fuhrlaender

“We definitely are closely watching the controversy and obstacles for this current project to see what will happen,” said Goldwind’s Zhou.

Aggressive government goals issued in 2005 call for at least 15 percent of China’s power to come from wind, solar and hydropower by 2020. Officials say that target might be boosted to 20 percent.

In July, Beijing raised its wind power goal to 150 gigawatts of generating capacity by 2020 – the equivalent of 300 standard coal-fired power plants – up from the 2005 plan’s target of 30 gigawatts.

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But the industry faces technical hurdles to its growth.

Wind farm construction has raced ahead so fast that 25 percent have yet to be connected to the national power grid. Like the United States, China faces the problem that its windiest areas in the desert northwest and northern grasslands are far from populous cities, requiring expensive transmission lines.

Other companies are developing technology ranging from solar panels and fuel cells to more far-out systems that make power from garbage and used cooking oil.

China’s solar cell producers have competed abroad in Spain, Germany and California since they got into the business early this decade because the technology was too expensive for Chinese buyers. The biggest, Suntech Power Holdings Ltd., is on track to pass Germany’s Q-Cells SE as the world’s top supplier as early as this year.

“In an incredibly short space of time China has taken the lead in the race to develop and commercialize a range of low-carbon technologies,” said the Climate Group, a London-based environmental organization, in a report in August.

Many manufacturers still rely on technology licensed from General Electric Co. and other foreign producers but Goldwind, Sinovel and others are developing their own. Zhou said Goldwind has spent 500 million yuan ($75 million) since 2007 on research and owns the technology used in its turbines in Minnesosta.

Goldwind, founded in 2001, says more than 1,200 of its 1.5-megawatt units have been installed at 40 wind farms across China. Last year, it bought a German company, Vensys, with a factory that can produce 100 turbines a year.

Zhou stressed that Goldwind plans to make or buy most components wherever its turbines are installed, rather than shipping bulky towers and blades up to 90 meters (300 feet) long from China. That could help to avert political strains by creating local jobs.

“We don’t want to aggressively enter a market with simple thinking that we can just export our equipment there,” Zhou said.

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Chinese Wind Power Companies Target Global Markets

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3 thoughts on “Chinese Wind Power Companies Target Global Markets”

  1. Dear sirs,

    We have the required license for setting up Wind power in the States of Karnataka and Tamilnadu in India. We will do the total development and handover the site to you for installation of machinery. If any turbine manufactures wants to have base in India to develop their turbines business. We can provide them the required sites and permissions to develop/market their turbines.

    Regards
    KK Rao
    91-9959444017

  2. Hi
    Our activities are in scope of new energies, so we need the Wind turbines in power of 2kw through 5 kw , i appreciate if you send me the list of prices together with the catalog of your productes (Wind turbines).
    best regurdes

  3. ,, L I S I N A ,, DOO Arandjelovac . Serbia
    Private Company.Manufacturing, Export-Import trading, service providing, Adress Company:Kneza Mihaila 90/C-3, 34300 Arandjelovac SERBIA, Pib -105020475 ; Mat..br. 20291729 ; Fah:+38134713658 ; Tel +38134701659.
    E-mail : ftolisina@gmail.com
    01.02.2010.
    Subject: Letter of Intention
    General Manager

    Dear Sir
    I hope that the cooperation we can achieve a common interest. I want to read your proposal of cooperation. The proposal of cooperation please describe the details of how you want to work, what products.
    I expect support for addresses of companies small windmill for electricity production, the capacity to use the house.
    Several proposals of cooperation:
    I took the liberty of informing you about our intentions and proposals about our future business cooperation , which include :
    – office of your firm in Serbia
    – representation of your firm in Serbia
    – selling your product in Serbia
    – mutual business investment.
    We would be very grateful if you considered these proposals. We are also open for any suggestions that you might have and we would be happy to consider them very carefully.
    Hoping that we will find mutual interest and develop business cooperation, we look forward to hearing from you soon.
    Yours sincerely
    Milun

    Aranđelovac , Serbia
    ,,LISINA,,D.O.O Arandjelovac,Serbia
    General Manager Milun Radovanović

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