China - Wind power industry faces overcapacity

It is reported that China wind power industry is striding forward under the guidance and encouragement of Chinese government but is burdened with a potential overcapacity of backward equipment manufacturing, an obstacle in the way of wind power development.

As a clean and renewable energy, wind power has gained great favor in China's energy development in recent years. Especially after the Chinese government promulgated the Renewable Energy Law, which offers explicit support to new energy industry, wind power industry has got on an expressway.

By the end of 2008, the installed capacity of wind power in the country had amounted to 12.17 million kilowatts, compared to 460,000 KW only at the end of 2002. The country 238 wind farms generated 14.8 billion kilowatt hours of electricity in 2008.

Fast growing wind power industry also drove the development of wind power equipment manufacturing which received 70% of the total investment in wind farm construction. By the end of 2008, homemade equipments had taken 75% shares of the domestic market. However, craving for good returns, some investors lacking technology and financial strength have forced their way into wind power equipment manufacturing industry which is resulting in a relative excess of production capacity.

At present, there are about 60 enterprises producing and prepared to produce wind power equipment. And over 10 enterprises have been capable of lot producing 1.5 MW and 2 MW wind power generating units.

Experts point out that wind power equipment manufacturing is a highly integrated industry of aerodynamic, automation, machinery and information technologies. The blind entry of some enterprises is not only a waste of huge capital, but also does harm to the sustainable development of wind power industry. Nevertheless, the development of wind power in China is still at the infant stage. Compared to the nation 800 million installed power capacity, wind power capacity occupies a very small proportion and wind power generation hasn't reached 0.5% of the national total.

Mr Shi Lishan vice director with New Energy and Renewable Energy Bureau of the National Energy Administration said in the long run, wind power would brace faster development worldwide, and the problem of overcapacity of wind power equipment manufacturing might not be so prominent if looked from the global market. But Mr Shi further added that China's wind power equipment manufacturers should follow up the latest technologies globally and make great effort in independent technology researches so as to accommodate the fast development of wind power industry.

China wind power installed capacity is expected to reach 150 million kilowatts by 2020, which would drive CNY 1.5 trillion of investments, generate 300 billion kilowatt hours of clear power, save 100 million tons of standard coal and reduce 200 million tonnes of carbon emission each year.

For more information please contact Trevor Sievert at ts@windfair.net