Paving the way for growth in China

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Spain's Iberdrola and Acciona -- two of the world's top three owners of wind power assets -- continue to bore their way into the renewables market in China. Iberdrola has secured exclusive prospecting rights for up to 1000 MW of wind development by 2010 and Acciona has signed a long term blade supply agreement for its Chinese turbine manufacturing operation.

Iberdrola's agreement is with local authorities in Bayannaoer, in the windy north of the country, where it will conduct wind measurements and site viability studies. It has committed to "installing a minimum of 300 MW by 2008 and 1000 MW by 2010, "providing the necessary conditions are met to ensure investment returns."

It regards China as a key market for meeting its global wind aspirations and is already committed to buying 700 MW of projects planned in the country by Gamesa, in which it has a key ownership stake. Gamesa, is building a factory in Tianjin.

For its part, Acciona Windpower has secured blades from LM Glasfiber's Chinese factory for 560 MW of its turbines, formerly known as Ingetur, over four years. The deal was made through Acciona's Chinese joint venture, Nantong Casc Wanyuan Acciona Wind Turbine Manufacture Co (NCWA), on the eve of its factory start-up in the city of Nantong. So far, NCWA has contracts for 73 turbines totalling 110 MW. The rest of the 560 MW is being negotiated with large electricity companies, says Acciona's José Arrieta. Acciona holds a 45% stake in NCWA, as does state-owned China Aerospace Science and Technology Corporation. The remaining 10% is held by Sino-Spanish merchants Inceisa.

The deal with LM helps NCWA meet China's 70% local content requirement for wind projects, although Arrieta says Acciona has set a target "aimed at sourcing 90% of supplies locally in two years." The China facility will also serve as a springboard to the rest of Asia-Pacific, he says: "We have started moving in South Korea and we do not discount initiatives in other countries [in the region]."

For LM Glasfiber the deal has prompted it to expand its blade production facility in Tianjin by 50%. "New production facilities adjacent to the existing blade factory are scheduled to go online by summer 2006," it says. China is aiming for 30 GW of wind power by 2020.

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