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WIND power is a priority for Chinese policy makers, who see turbines
as a way to wean the power-hungry nation off coal and oil. Wind
is also potentially an industry in which China can lead the world,
as turbine producers crowd into the country to cash in on a remarkable
ramp-up in local wind capacity. Wind farm operators are guaranteed
a market as the government compels power companies to buy their
electricity. Operators also sell credits to Western corporations
as carbon offsets under the Kyoto Protocol’s Clean Development
Mechanism (CDM).
Four of the largest windmill and wind power organizations in
the world have offices in the northern Chinese city of Tianjin:
Vestas, Gamesa, Winenergy and Suslon. World number-two wind energy
manufacturer Gamesa employs 1,000 people at its Tianjin operation,
making the company’s 850 kilowatt (kW) G52 and G58 models.
Danish company Vestas manufactures generators, nacelles and hubs
at its Tianjin facility. A factory opened last year to make blades
is “state of the art,” says the company’s China
head, Jorn Dalsgaard Pedersen.
Tianjin’s location has made it the center of China’s
wind turbine/equipment industry, explains Gamesa’s China
manager Jesus Zaldua. “It makes for easier transportation
because wind farms are mainly located in the north of China.”
The city’s port and history of heavy industry are also draws,
along with a proximity to the headquarters of China’s largest
power companies. “Tianjin is located near Beijing, where
customer decision-makers are located,” says Zaldua.
Tianjin’s turbine makers boast spectacularly full order
books. The locally registered operation of Indian-owned Suzlon
recently sold 100 megawatts (MW) of turbine capacity to Chinese
power generator Jingneng. Suzlon claims an eight percent market
share in China, with a per-annum manufacturing capacity of 220MW
at its plant in Tianjin. The company’s local chief Paulo
Soares hopes that by the end of 2008 the company will be making
turbines totaling 600MW capacity per year. That is considerable
in the context of China’s energy needs, given that 1MW is
sufficient to provide a daily electricity supply for 900 households.
China had wind power facilities with a combined installed capacity
of 6.05 million kW at the end of 2007, increasing from 2.67 million
kW only a year earlier. Another 4.2 million kW will be added in
2008. At this rate, China will quickly catch up with Germany,
the top wind power producer with a total installed capacity of
20.62 million kW. China plans to have wind capacity of 30 million
kW installed by 2020 (China had an overall capacity of 713 million
kW at the end of 2007 according to the policy-setting National
Research and Development Commission).
Chinese government policy has encouraged the growth of a domestic
turbine manufacturing base by demanding that turbines used on
Chinese wind farms contain at least 70 percent locally made components.
Hence companies like Gamesa have set up manufacturing operations
in China. While 100 percent of the turbines produced in Tianjin
are for the local market, in 2008 the company began shipping some
Tianjin components to plants in Spain and the U.S. Gamesa’s
G52 and G58 turbines, both 850kW capacity, boast a “robust
design” which has been proven in global markets. More than
10,000 units are already operational worldwide, claims Jesus Zaldua.
“Our turbines have a high and sustainable availability.”
Local wind turbine makers have grown quickly alongside foreign
brands like Gamesa. Nine Chinese turbine makers, including market
leaders Goldwind and Zhejiang Windey, have export capacity. Most
Chinese turbine makers have licensed technology from overseas
counterparts. Zhejiang Windey, which licensed its core technology
from Germany’s REPower, opened a factory in Zhangjiakou,
Hebei Province late last year, with an annual output capacity
of 600MW.
Lower labor costs mean Goldwind can sell its turbines cheaper
than many foreign competitors. “But we don’t want to
be seen as competing solely on price,” says Eric de Vrij,
international business director at the company. “We have
the quality for export markets.”
Ding Jianping, marketing manager at Zhejiang Windey, says his
firm can “totally” compete with foreign turbine makers
on quality and price. “We are entitled to use the same advanced
foreign technology, but our cost is lower by a third.” The
company has installed its own R&D team to build better turbines.
The days when Chinese firms concentrated on small-capacity turbines
are over. “We can make turbines of the same size and capacity
as those big foreign brands.”
Others disagree. Chinese competitors will “take time”
to produce turbines of the same quality and range as Gamesa, says
Zaldua. “Long experience is needed to make robust machines.
Gamesa’s G52 and G58 machines were first delivered in 2000.”
Wind turbines have improved drastically in size and efficiency
since the 1970s. Today’s 60-meter blades replaced their 10-meter
predecessors, allowing for greatly increased power generation.
More efficient turbines make wind-powered electricity cheaper
to produce: US $2 per kWh in 1976 compared to US $0.03 with today’s
5MW turbines.
Boasting more powerful machines, foreign turbine makers have
so far dominated the Chinese market. Yet Chinese counterparts,
hitherto soaking up the market for small-capacity and lower-spec
turbines, are catching up.
China may revolutionize the business with a new turbine that
uses magnetic levitation to replace conventional bearings in wind
turbines. A recent design by the Guangzhou Energy Research Institute
of the Chinese Academy of Sciences allows turbine blades to turn
with much slower wind speeds. Power output at such velocities
is low however.
A firm linked to the Institute, Guangzhou Zhongke Hengyuan Energy
Science & Technology Co., Ltd, which invested RMB 400 million
in building a prototype of the Maglev turbines, predicts revenue
of RMB 1.6 billion from the generators. The new machine boosts
wind energy generating capacity by as much as 20 percent over
traditional wind turbines, explains company marketing manager
Du Hainan. The Maglev turbines will also be 20 percent more expensive
than conventional ones, he adds.
Though most of the customers are domestic, orders are also “pouring
in” from overseas, says Du. Makers of conventional turbines
have reason to worry. “I’m sure we’ll take away
part of those conventional turbine makers’ market, but only
a small part.” Price-conscious customers and smaller-scale
wind farms will stick with conventional turbines, he predicts.
“It’s like a racing car in that it’s much more
advanced in its capabilities compared to a family passenger car,
but it can never occupy the whole market.”
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