Flying the wind flag high in Beijing

The growing importance of China as a key market for the wind industry was well in evidence in Beijing in late June. Government targets for 5000 MW of wind power capacity by 2010, 15,000 MW by 2015, and 30,000 MW by 2020 had the world's leading turbine manufacturers all vying for attention on the exhibition floor of the China World Trade Center. The third Asian Wind Energy Conference & Exhibition also pulled in several of the industry's most recognisable personalities to front a round table summit.

1 September 2006

With so much wind business up for grabs in China the third Asian Wind Energy Conference & Exhibition was a bustling affair. Some, however, opted for a quick exit

The mood was mixed, however. While the government's targets were welcomed, the new policies for achieving them, announced earlier this year (�u�X��ʘ��, February 2006), drew much criticism from the industry -- in particular the requirement that 70% of a wind power plant be made in China. Neither is the industry happy with the government's decision to base the national wind market on a series of tenders for state concessions instead of adopting a policy for achieving long term stable growth.

Any chance for engaging with government in open debate at the conference was short lived. Government officials opted to make their escape as fast as they could on day one of the three day event in a bid to avoid facing the barrage of questions and concerns on market policy that many delegates went armed with. Having already had to defend their policies in Beijing at both a wind energy summit and a finance forum earlier this year (�u�X��ʘ��, May 2006), they appeared less than eager to do so again. Some delegates said they were trying to avoid the media pack, while others speculated their hasty exit had more to do with an upcoming reshuffle at the National Development & Reform Commission, the department responsible for issuing state wind power project concessions.

Summit concerns

Whatever the case, delegates were left none the wiser, with policy concerns dominating much of the conference sessions as well as a round table summit convened in a small, dimly lit meeting room in the afternoon of day two. Arthouros Zervos of the Global Wind Energy Council, Per Hornung Pedersen of Suzlon, Thomas Richterich of Nordex, Thorbjørn Rasmussen of Vestas Asia Pacific, Barry O'Flynn of Airtricity, Lin Qi of LM Glasfiber, Jorge Cortina of Gamesa Energía, and Li Junfeng of the Chinese Renewable Energy Industries Association (CREIA) all acknowledged that China's targets for wind are impressive and the market big. But they also expressed concern about market transparency and the uncertainty of government policy. While a vow by Suzlon's Pedersen "to take the challenge to work the Chinese way" was well supported, O'Flynn of Airtricity called on China to treat foreign and domestic companies equally.

The number of domestic companies in the market is increasing everyday -- Chinese wind turbine manufacturers now total around 30 -- and many have little or no experience in the wind industry. Moreover, with a system which has so far favoured the lowest bid option for project concessions, many overseas firms are concerned that their more realistic pricing will see them left empty handed and the local market impeded. "Low cost, low quality will harm the Chinese wind industry," O'Flynn warned. Indeed, a day later in the last conference session of the event, Pan Weiping of Garrad Hassan and Partners stressed the importance of technical due diligence. He told the audience that the electricity output of many wind plants in China failed to live up to expectation. That was usually caused by inaccurate assessment of wind resources at the select sites, he said.

Policy optimism

Still, many were optimistic that policy will shift in the right direction. Li Junfeng said CREIA and others are still trying to persuade the Chinese government to alter the policies to give wind preferential treatment. "Many developers and suppliers in China believe wind has a bright future and the policy will finally change," said Chinese Wind Energy Association vice president Shi Pengfei. This year China will see 700-1000 MW of new wind capacity added to the end 2005 total of 1260 MW, up to double the 500 MW installed last year. "The only problem is the short supply of equipment and that is a global problem," Shi said.

Given the size of the potential market, the absence at the event of mainline project developers, including Longyuan Electric Power Group and Guohua, surprised some. Longyuan is the kingpin of China's wind sector, operating 23 wind plant with a combined capacity of 416 MW at the end of 2005, nearly a third of the country's total installed capacity. It is also developing 1600 MW of wind plant in Weichang, Hebi province (�u�X��ʘ��, July 2006), with construction work started on 200 MW at Tongyu, a concession project issued for tender in 2004. Similarly, Guohua has been an aggressive wind energy player and won the concession to develop the 200 MW Dongtai wind plant in East China's Jiangsu province. It also has wind projects under development in North China's Zhangjiakou and West China's Xinjiang provinces.

Exhibitors

With the main developers absent it was left to the turbine manufacturers to make a splash on the exhibition floor. Gamesa, Acciona, Vestas, GE Energy, Suzlon and Nordex were all present from overseas, alongside China's leading domestic supplier Goldwind, the Dongfang Steam Turbine Works, which partners German turbine supplier Repower, and Dalian Heavy Industry. More than 110 exhibitors jostled for attention in three halls, including component suppliers, service providers and smaller wind farm developers. Germany's Nordex had the biggest stand and Spain's Gamesa, the event's partner sponsor, took prime position in the centre of the lobby. Keen not to be outdone by its larger overseas rivals, Goldwind's display was arguably the most impressive.

The biggest group stand was the Danish Pavilion, organised by the Danish Wind Energy Group under the Danish Export Association and representing 13 companies. With the help of the Danish embassy, the Danish Wind Energy Group also staged a one-day special promotion at a hotel near the World Trade Center. One of the likely outcomes will be a three-day wind training program in Beijing for Goldwind mounted by the Center for Wind Energy at Denmark's University of Aarhus, if negotiations go well, said the centre's Peter Rosenberg.

"I see a fantastic potential. Demark has so much to offer," Ulrich Ritsing, chairman of the Danish Export Association and the Danish Wind Energy Group, said. "We are here to support our Chinese partners as much as we can. I see big prospects for us and China in the coming years," continued Ritsing. "Some Danish exhibitors were surprised to see how quickly things have moved. They're also surprised to see how many new Chinese companies are starting to think about manufacturing wind turbines. The market is so big and so interesting."