20 Oct 2010 12:42

Chinese wind turbine manufacturers eye overseas market

Beijing. October 20. INTERFAX-CHINA - China's booming wind power market, the world's largest, has given rise to over 80 domestic wind turbine manufacturers during its ascent. However, these manufacturers have largely remained unsatisfied with the current state of the sector's development and have been seeking to broaden their scope by entering the overseas market.

At home, China installed 10,129 wind turbines having a total capacity of 13,800 megawatts (MW) in 2009. In the same year, Chinese manufacturers began trying their hand abroad and exported 20 wind turbines with a total installed capacity of 28.75 MW to four countries, according to the China Wind Power Outlook 2010 report.

Below is a table specifying these exports.

China's wind turbine exports in 2009

Company Number of exports Capacity (MW) Country
Sinovel 10 15 India
Goldwind 3 4.5 United States
Shanghai Electric 5 6.25 UK, Thailand
New United 2 3 United States, Thailand
Total 20 28.75 -

Source: China Wind Power Outlook 2010

This looks to be the beginning of a larger trend among domestic turbine manufacturers as they gear up to target the overseas market on a much larger scale.

Hrseas sales to account for between 30 and 50 percent of its total sales revenue in fivean Junliang, chairman and president of Sinovel Wind Group Co. Ltd., said at the China Wind Power 2010 forum on Oct. 14 that the company is aiming to boost its ove years.

In addition to leading the country in the development of large-capacity wind turbines, Sinovel surpassed Goldwind in 2009 to become China's largest wind turbine manufacturer. This year, the company has received orders to supply wind turbines to three wind farms in Jiangsu Province with a total installed capacity of 900 MW.

Han said that the company hopes to break into the overseas market by upgrading its manufacturing technology, as offshore turbines need to be of a higher quality and have a larger capacity than onshore turbines. As part of this plan, Sinovel announced earlier this month that it successfully produced China's first 5-MW wind turbine.

"If a [wind turbine] company cannot succeed in the US and European markets, then it cannot be considered a truly international company," Han said.

Sinovel is not alone in its ambitions; its domestic rivals also have plans to sell their turbines abroad.

In 2009, Goldwind invested in a wind farm in the United States that currently has three of its wind turbines in operation. The company also won a bid earlier this year to supply its turbines to a project in Cyprus.

Wang Haibo, vice president of Goldwind, said at the China Wind Power 2010 forum that the company's overseas strategy includes selling its turbines in Europe, investing in wind farms in the United States and selling licenses in India and Brazil.

Qi Xinping, chairman of Shanghai Electric Windpower Equipment Co. Ltd., told Interfax that his company is developing an overseas expansion plan which includes selling its turbines in Southeast Asia and the Middle East.

However, as companies' ambitions continue to grow a rapid pace, some officials and experts have expressed concerns over the "impulsiveness" of the approach and possible misunderstanding of policies concerning overseas market access.

Liang Zhipeng, director of the National Energy Administration's (NEA) Renewable Energy Department, said that because Chinese companies have such a large manufacturing capacity, their export could be viewed as an unfair trade practice, resulting in anti-dumping actions.

Chen Hang, president of USFOR Energy LLC, works to help Chinese wind power manufacturers and wind farm developers enter into the U.S. market. When he spoke with Interfax, he said that what the American public cares most about at the moment is job opportunities. "It is essential for Chinese companies to make it extremely clear that they will help create more jobs when they invest in the U.S.," Chen noted.

Chen said that although domestic manufacturers boast strengths in capital and manufacturing, they should source at least a portion of their components in the U.S., thereby creating employment opportunities, rather than shipping all fully assembled wind turbines to the U.S. market.

In September, the United Steelworkers (USW) union filed a petition accusing China of "employing a wide range of practices that are inconsistent with World Trade Organization (WTO) policies...aimed at protecting and unfairly supporting its domestic producers of goods including wind and solar energy products, advanced batteries and energy-efficient vehicles as it seeks to become the dominant global supplier of these products." Though Chen thinks that the Office of the United States Trade Representative is not likely to submit the petition to World Trade Organization (WTO) after reviewing it, he stressed that China must address the issues systematically and rationally.

"The petition incorrectly interpreted some of China's renewable energy subsidization policies," Chen noted. "In fact, many countries, including the United States, are subsidizing this industry."

He suggested that domestic wind power companies express to their U.S. counterparts that what they are selling are high-tech products which cannot easily be dumped. "Additionally, the low prices of Chinese wind turbines are actually attributable to the current market situation rather than to government subsidy programs," Chen said.

"In the long run, the best option for Chinese wind turbine companies looking to develop their businesses in the U.S. is to invest in a manufacturing base there and employ local workers," Chen thought.