Installed wind capacity in China to date is about 30 MW, mostly made up of machines from Denmark. Over 12 MW of this is concentrated at the Dabancheng demonstration facility in Xinjiang province. Projects of about 4 MW each are also running in Guangdong and Liaoning provinces and in Inner Mongolia. Among the German wind industry, Aeromann was the first on the Chinese market, installing ten 33 kW machines, financed by KfW. Husumer Schiffswerft (HSW) was also among the early pioneers with two projects of four 250 kW machines, one installed at Dalian in Liaoning and the other at Zhurihe in Inner Mongolia. Both were supported by the German government.
In November 1995 HSW completed a third wind plant of four 250 kW units, this time at Xilinhot, again in Inner Mongolia. This was a wind plant developed with a difference, though. The project was supported under the German Eldorado programme as the first stage of phase one of a four phase co-operation contract with China for the transfer of know-how. Some 20% of the turbine components were manufactured in China. The remaining stage of phase one is for installation of six HSW 250 units, which will go in the ground on the island of Hainan in March.
HSW agreed on the four phase co-operation to meet China's desire for greater involvement in wind turbine production. In 1994 HSW signed a co-operation contract with one of China's largest mechanical engineering operations, the China First Tractor and Construction Corporation in Laoyang. The deal was aimed at local manufacture of HSW 250-T turbines. The third signatory to the co-operation agreement was Aeropropeller Factory of China, based in Baoding. It will manufacture blades for HSW.
Under the four phases of the agreement, the share of Chinese involvement will be increased from the current 20%, to 80% at the end of the contract. HSW will not levy licence fees as long as the Chinese partners buy parts from Germany. In total, the contract involves the production of 200 turbines and should yield a turnover for HSW of DEM 40-50 million. Beyond that an annual production of 300 turbines is planned, with HSW supplying 20% of components from Germany. So far China has contributed towers, including cabling, as well as the foundations. German quality standards were achieved, according to HSW.
Phase 2, just starting, involves the construction of 60 turbines with 40% of the parts made in China along with assembly of the machines. Preparation for blade manufacture in China will also begin with the aid of German wind turbine rotor blade supplier, Abeking und Rasmussen. The company, based in Bremen, builds blades in Germany for HSW.
The entire four phase project could still come to grief though. Last month negotiations were still underway to get phase two on the road. According to HSW, American and Danish competitors are offering wind turbines at extremely competitive prices, making it difficult for China First Tractor to find customers for its Chinese-German product. On the other hand, it is not clear what price policy China First Tractor is pursuing. Chinese pricing remains an area of great mystery to most wind turbine manufacturers doing business there.
HSW argues that once phase two is complete, and 55% of the turbine is produced in China, manufacturing costs will be reduced sufficiently for China First Tractor to compete quite happily with what appear to be very low prices from America and Denmark.
Just starting out
In contrast to HSW, AN Maschinenbau is just starting out in China, although more Bonus turbines -- made in Denmark -- are installed in China than any other single make. Three AN Bonus 450 kW turbines were shipped to Dabancheng, near Urumqi in the province of Xinjiang, at the end of November, a journey involving 4000 kilometres by rail and truck into the interior of north west China. Extreme winter weather, with temperatures as low as minus 30 degrees Centigrade, will probably delay installation until May or June next year, says the company.
The DEM 4 million project is supported under the Eldorado programme, with the German government paying 70% of the hardware and transport costs to the Chinese border. The three machines have been bought indirectly by the Xinjiang Wind Energy Company (XWEC) of Urumqi through the China National Scientific Instruments and Materials Import/Export Corporation of Beijing.
The Dabancheng wind facility is located in an 80 kilometre long valley at a height of 1200 metres. The valley provides a north-south passage for alternately cold and warm air. The wind can blow from the same direction at a steady 6.2 m/s for anything up to a week at a time. Power is fed into a high voltage cable, originating from a hydro station, with room in the valley for several hundred megawatt of wind plant, claim the Chinese.
Tacke Windtechnik also has several projects planned in China, apparently including sales to XWEC, but is keeping its head down. "In view of the considerable competition in China, we prefer not to give details until we have contracts signed," says the company's Jürgen Beigel. He also complains about the lack of assistance from the German government.
KfW disagrees with Tacke's view. "The government does more than perhaps is recognised," says the bank's Klaus Möller, pointing out that negotiations are underway for wind energy to get a slice of the annual German aid going to China. If the negotiations are successful, 12 wind turbines, with capacities of 450-600 kW, will be installed on Hainan Island for the local utility, to come on line in November. The German supplier of these turbines was due to be named shortly before Christmas. A second project is to be located in hills near the city of Hang-Zhou, north of Shanghai where 5 MW will be installed. The tendering process for the turbines will be completed within the next three months.
Work on further projects has also started with another site chosen on the island of Changdao, where wind measurements are underway, while China is assisting in the search for further sites. These projects are expected to each be of 6 MW.
KfW is responsible for co-ordinating the financing of the projects with the electricity utility concerned. The financing usually takes the form of a "combination credit:" 50% is borrowed from a normal bank at normal interest rates for a ten year period, but the payments on the loan do not begin until the second five years. The remaining 50% is supplied by the Federal Ministry for Research from its budget for financial co-operation with developing countries. Here, the credit runs for 30 years with an interest rate of just 0.75%, whereby the first ten years is a grace period so the payback time does not begin until the normal bank credit has been paid.