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Steady increase to 2015

ASIA PACIFIC: According to Li Junfeng, deputy director of the energy research institute of China's economic watchdog the National Development and Reform Commission, Asia will have 190-200GW in cumulative installed capacity by the end of 2015.

In 2010, Asia saw a 54.6% increase in installed capacity over the previous year. This growth was mainly down to China and India. China reached 44.7GW installed capacity by the end of 2010, replacing the US as world leader in installed capacity. However less than 40GW is so far connected to the grid.

Steady growth in China

While China will continue the momentum, increasing its 10GW-level wind-power bases from eight to ten, it is unlikely to maintain the three-digit growth seen in recent years.

According to Windpower Intelligence data, it has some 27GW of wind farms currently under construction. The data reveals over 45GW of Chinese projects currently in the pipeline, around 5GW of that announced in 2011. The two largest projects announced in 2011 are a 1GW offshore project in Chongqing being developed by AES Corporation and a 400MW onshore farm in Xiji County by developer China Guodian.

However, the Chinese government has become stricter in approving wind-power projects. In August 2011, the National Energy Bureau provided licenses to 28.8GW of projects, the first batch for the next five years. This represents only about half of the applications that were received.

Grid access is a major problem. About 89% of China's wind capacity is in the north, while power-hungry economic centres are in the east and south. Since wind is a fluctuating and thus unreliable resource, the State Grid is concerned that connecting large amounts of wind power may damage the grid. This fear is not groundless. In the first eight months of 2011, there were 193 grid accidents that disconnected a large number of wind turbines, including 12 accidents that each crippled more than 500MW of turbines.

Li Junfeng stated at the end of 2011 that China would have 100GW of turbines connected to the grid by 2015. This implies an annual growth rate averaging 26 % up to 2015 - a slower but more rational rate.

Developers

Through 2011, wind-farm developers found themselves more strongly placed when buying turbines because of surplus production capacity. Prices accepted at tender have plunged to about half the levels of 2008, and developers could even insist that turbine makers amend signed contracts to lower prices.

Huaneng Renewables, one of China's major developers, says it bought wind turbines 16.9% cheaper in the first six months of 2011, compared with 2010. This has helped to lower wind-farm construction costs.

Datang Renewables, another major wind-power developer, confirmed that it cut wind-farm construction costs, boosting profits. China's leading developers, particularly the top-five state-owned power companies, have all consistently improved financial performance.

Longyuan, another leading developer, boosted generation in 2011 by over 42.7% over the same period of 2010, and revenues rose 40%. Longyuan had 7.04GW capacity by the end of September, up 50% year on year.

Huaneng raised net profits by 112%, with generation surging 94% year on year. However, because it built more projects in areas with low benchmark feed-in tariffs, it sold wind power at a slightly lower price.

Datang generated 3.85GWh of electricity in the first six months of 2011, up 62% year on year, and profits soared 103%. It installed 114MW in the first half of 2011, taking cumulative capacity to over 4GW.

Datang believes the future for developers will be strongly influenced by the wind-rich resources they hold, and therefore gives top priority to seeking areas of quality wind resources and having projects approved there. By June, the company held 85GW of wind resources, half in wind-rich areas.

Despite these positive stories, developers are suffering from China's stringent monetary policy. Bank loans can be hard to come by and interest rates are high. Chinese wind farms rely heavily on the country's clean development mechanism incomes to make a profit, so the uncertainty of finance through this route after 2012 is likely to have an affect.

India

India installed a record 2.14GW of wind-power capacity in 2010, bringing its total to 13.1GW, thereby becoming the world's third-largest annual market after China and the US. It ranks fifth in terms of total installed capacity. That recent strong growth, however, could be a reflection of developers rushing to use the accelerated depreciation tax incentive before its likely phasing out from April 2012.

According to the Windpower Intelligence data, India has a project pipeline of 3.4GW, with 2.5GW of these projects having signed turbine purchase agreements (TPAs), and 1.6MW announced in 2011. Domestic manufacturer Suzlon is the busiest developer, with almost 700MW of the projects, and the country's power producer Greenko takes second place, developing 360MW. Like China, there are grid problems that are likely to get worse as more capacity is ready to come online. Li Junfeng estimates that Indian capacity will increase by 3-5GW annually over the next five years.

Other nations

In 2010, Japan added 221MW to make a cumulative 2.43GW. South Korea had 31MW wind turbines installed, taking it to 342MW by the end of 2010. It is investing $9 billion to construct 2.5GW offshore wind power by 2019.

In Pakistan, wind farms are developed by private companies without government investment or subsidy. Pakistan's National Electric Power Regulatory Authority has fixed feed-in tariffs, with a higher rate for domestic-funded wind farms, encouraging both domestic and foreign developers. The country has 22 wind farms under preparation or construction, with a confirmed pipeline of 1.2GW of announced projects, of which only 350MW was announced in 2011, according to Windpower Intelligence data. In early 2012, it will start to construct 10MW wind farms and seek financing for five others. The government has planned to construct 1.5GW of wind projects in the next three years.

The rate of installed wind capacity in Australia also slowed over 2010, with only 167MW added. This was attributed to the absence of a consistent long-term policy framework to encourage investment.

Jorn Hammer, managing director of Vestas Australia, says Australia has among the highest political risks in the Asia-Pacific region for wind developers. But, there are signs of optimism, with Australia the third-highest nation on the globe (after China and the US) for total capacity of sites acquired in 2011 - 1.9GW was added to the pipeline projects, including two 600MW sites. South Australia will be home to one of these sites, developed by Indian manufacturer Suzlon, and the other is planned for New South Wales, being developed by UK-based developer Wind Prospect.

New Zealand is well on its way to achieving 20% of energy generation from wind by 2030. This goal requires for about 4GW of installed capacity. Currently, wind accounts for about 4% of electricity supply, with 615MW in operation, 1.4GW consented and an additional 700MW lodged for consent by early August. In total its project pipeline currently stands at 3.6GW, although 600MW of this had been set to be up and running by the end of 2011. Of the remaining projects, 570MW is expected to come online this year.

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