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China

China

Chinese onshore tender prices cause concern

CHINA: Senior Chinese wind industry executives are concerned low bidding for the country's first public onshore tender could endanger the development of its wind industry.

10 of the wind farms will be part of the 10GW Hami complex in Xinjiang
10 of the wind farms will be part of the 10GW Hami complex in Xinjiang

The tender involved 24 wind projects with a combined capacity of 3.5GW, in China's Xinjiang and Hebei provinces. The projects required developers to use turbines of around 2MW or more.

The majority of bidders were Chinese manufacturers, although Gamesa was also represented.

Industry officials said the low prices are due to more localized production, falling cost for raw materials and lower transportation costs. However, there are also fears the bidding is descending into a price war.

A senior executive from a leading turbine maker, who asked not to be identified, said: "China does not have prototyping technologies for 3MW wind turbines. It is unimaginable how the enterprises could offer such low prices for the turbines."

The executive also warned that squeezing costs could impair turbine quality.

Onshore details

  • 14 wind farms of 100MW each (with one 200MW) in the Bashang project in ZhangJiakou, Hebei province.
  • 10 wind farms totalling 2GW capacity in Hami 10GW project in Xinjiang. The tender requires developers to use turbines with a capacity of 2.5MW or bigger.
  • Bidders include: Sinovel, Goldwind, Guodian United Power, Dongfang Electric, Shanghai Electric, XEMC, Mingyang and Yunda. Gamesa is the only foreign company joining the public tender.

Goldwind offered the lowest price, CHY3,812/kwh, for 1.5MW turbines for the Zhangjiakou projects. This is about CHY400/kwh lower than the price offered by Sinovel, CHY4,200/khw, for same turbines in the beginning of the year. Most turbine producers offered CHY4,000-4,100/kwh for 1.5MW turbines.

The low bids came in the wake of similar events surrounding China's tenders for four offshore and inter-tidal wind farms. The winning prices were CHY0.6-0.7/kwh, near the benchmark prices for onshore wind farms.

It led Vestas China president Jens Tommerup to remark that prices paid in the offshore tender do not leave enough funds for operations and maintenance.

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