Market conditions force Sinovel Q1 profits down 87%

CHINA: Market policy, competition and falling wind turbine prices have caused an 87% plunge in Sinovel's Q1 net profits.

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Sinovel estimates that profit will fall by 50% in the first half of this year. In 2011, Sinovel lost its position as China’s largest wind turbine maker, in terms of newly installed capacity, to Goldwind.

Sinovel had 2.9GW turbines installed in 2011, occupying 16.7% of the Chinese market. It was in contrast to the 3.6GW installed by Goldwind, making up 20.4% of the Chinese market.

In 2011, Chinese wind turbine manufacturers are struggling with current market conditions. China’s National Energy Bureau (NEB) removed the authority from provincial governments for approving new wind farms.

Existing wind farms had to abandon over 20% power generation capacity because of limited capacity of the grid to transmit wind power from the wind-rich north to end users of electric power in the east.

In 2012, dark clouds will continue to shroud the Chinese wind power industry. The second batch of wind farm projects for the 2011-15 period, approved by NEB, has dropped to 14.92GW. This is a reduction of almost nearly 50% from the 28.81GW for the first batch.

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