Friday, 23 January 2009

Are the winds of fortune blowing in the direction of China?

With more and more frequency I hear about China when I’m on the internet catching up on news and development in the global Wind Energy market, or talking to professionals in the market place. Just this week I read about Gamesa winning an order for 347 turbines which will create an installed capacity of 295MW for a Chinese Wind farm owned by a major Chinese Electricity provider. Suzlon has also won 200MW+ orders from Chinese companies.

Photo by Clemson

ResearchInChina, a portal for business intelligence in China has released a new report: China Wind Power Industry Report, 2008. For details of this please see ResearchInChina’s report. In the report they say that at the end of 2007 China was one of the top five regions in terms of installed capacity, and they are continuing to invest and install more and more, on an ambitious race to become the global leader. China more than doubled its wind power capacity in 2008, installing 4.66GW of additional capacity and passing the government’s 10GW target two years ahead of schedule. (from Renewable Energy Information)

However, there’s something else bubbling on my radar. As I’ve talked to people about the Chinese market I’ve heard of a few doubts and concerns about the way the Chinese are going “guns blazing” into this market. Their installed MWs are impressive, but what about the MWhs (mega-watt hours)? Are they focused on building effective, efficient and reliable wind farms? Are the MWs being installed in an integral and profitable manner?

BP moved out of the Chinese market despite joint ventures being formed and deals done for about 150MW of wind capacity (but then they’ve left the UK too). I have heard further rumours that another global wind developer has decided not to pursue any further with their Chinese due diligence.

Is wind energy in China a political game (remember that the Chinese government had to order the closure of polluting factories during the Olympics because the smog over there is so bad) rather than a genuine desire to generate “clean” electricity? I tried to do a bit of background research on this to back up the rumours I’m hearing, but actually I’m not seeing a lot of hard evidence out there one way or the other.

Food for thought and an interesting space to watch. I’d be interested to hear your views and ideas on this.

By Clare Buxton
Wind Energy Sector Lead

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