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Turbine makers take breather

Updated: 2012-04-05 08:04

By Liu Yiyu (China Daily)

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Turbine makers take breather

Technicians check the power grid at a wind farm in Chuzhou, Anhui province. In 2011, China's newly installed wind power capacity reached 18 gigawatts, or about 40 percent of the global total. [Photo / China Daily]

Grid connections and quality issues undermine wind-power efficiency

China's wind power industry is slowing down as foreign participants retreat from the world's largest market.

Suzlon Energy Ltd is believed to have axed 75 percent of the staff at its Tianjin plant. The India-based wind turbine manufacturer had more than 600 workers at the plant in 2011.

The company said it only secured 64 megawatts of orders in the first nine months of 2012, compared with 201 mW a year earlier.

A company spokesman declined to confirm the job cuts.

Suzlon's profits fell in the fourth quarter, partly due to grid infrastructure delays in China, the company said.

Meanwhile, Vestas Wind System A/S, the world's largest wind turbine maker, announced plans to cut staff this year, including 400 people in China.

Repower, a subsidiary of Suzlon Energy, announced last year it would withdraw from the China market, having sold only 200 mW of wind turbines during the previous five years in China.

"A lot of the weak suppliers will die, pushed out by quality demands from the government. In the end, this market will have maybe 10 mature Chinese players and a few foreign firms," said Wolfgang Jussen, Repower's CEO in China.

Sinovel Wind Group Co, China's largest wind turbine maker, has estimated its 2011 profit fell 50 percent, while Goldwind Science & Technology Co, the third-largest, estimated that profit fell 50 percent or even vanished.

Sinovel added 3,700 mW of installed capacity last year, down 16 percent, the first time that China's largest wind turbine maker recorded a drop in new installations.

"Production capacity outstripped demand and market uncertainty increased as the grid system needs reform," said Xiao Han, industry analyst at China Investment Consulting, an industry researcher.

This is "pushing foreign players whose market share has been declining out of the market."

"Both manufacturers and operators are suffering from falling profits," Xiao said.

China installed 18 gigawatts of wind turbines in 2011, accounting for about 40 percent of the global total, and pushing the nation's total installed wind power capacity to 62.7 gW, the Global Wind Energy Council said in a report.

Despite China's leading position in the world's wind power sector, the industry's growth slowed last year to 50 percent from previous years in which it often doubled.

Grid connections and quality issues have undermined China's wind-power efficiency and effectiveness.

Massive grid disconnection incidents were reported last year in Jiuquan of Gansu province in Northwest China, one of the largest wind power bases in the country, as project growth outstripped grid infrastructure development and quality control failed to keep up.

China said it would curb excessive expansion of the wind and solar industries in the latest government work report, raising concerns over the country's continued support for the renewable energy sector.

The government then revised the word "curb" to "prevent", showing its policy goal of cooling down the industry, which has overcapacity, while maintaining a supportive position.

"The industry is undergoing consolidation," said Shi Pengfei, vice-president of the China Wind Energy Association. "Wind operators are expanding into the downstream manufacturing business while bigger wind turbine manufacturers are buying smaller ones."

liuyiyu@chinadaily.com.cn

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