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China

China

Special Report - Opportunity and Risk in China - Knowledge transfer

The four winners of this year's largest Chinese government concession contract, for the first 3.8 GW phase of its 10 GW Gansu project (main story) all started batch production of wind turbines through licence agreements with international manufacturers. For most Chinese firms it has been a common route, says Shi Pengfei of the Chinese Wind Energy Association. "Most Chinese manufacturers have introduced, digested and absorbed foreign technical knowledge either by buying production licenses from foreign turbine producers or by hiring foreign engineering firms for joint design," he says.

It has been the only way they can catch up with the rest of the world. "Even before Chinese companies could start batch production of 200 kW turbines, the world market was dominated by 600 kW class turbines," he says. Domestic firms accounted for just 15% of China's installed capacity in 2003, increasing that only slightly to around 18% in 2004. Goldwind, he notes, accounted for 80% of the capacity installed by Chinese firms in both years. The technological difference between the turbines produced domestically and those produced by international companies was akin to that between a black and white television and a colour one, he says.

How times have changed. With the introduction of China's renewable energy law in 2006 and regulations to support implementation of the law, domestic turbine manufacturers have been shooting up. At least 40 companies are now making wind turbines, though less than a handful of those are doing so in serious numbers.

Chinese companies in conventional machine building industries see the wind power industry as a new growth area, says Pan Weiping, head of the China office for Garrad Hassan, a wind energy consultancy based in the UK. These newcomers, like the original group of domestic producers such as Goldwind and Windey, took a shortcut and chose to acquire foreign technology, he says. So far around ten domestic companies can provide megawatt size machines.

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