Success in China takes flexibility

Foreign wind project developers looking to succeed in China need to take a relaxed attitude to accepted business practices in the West and would be advised to find good strong local partners, said Mark Kelleher of Australian Roaring 40s, speaking at the Wind Power Shanghai Conference and Exhibition last month. Roaring 40s is the most successful foreign wind developer in China so far. "Firstly, we needed to let go of the rules about how one does business outside of China," he said. "You need to be more flexible."

Developers, foreign or Chinese, must come to terms with not knowing what power purchase price might be on offer when a wind station comes online. Not only are prices low, but often "you do not know what they are and once you know, there is no guarantee it won't change," said Kelleher. "Instead, you have to have faith in the Chinese government, local and national, that they want this industry to succeed."

James Pennay from IW Power, a company linked to Britain's Wind Prospect and with about 2000 MW in its Chinese wind development portfolio, tells a similar story. "The approach is to build it and worry about the tariff later. Things are done on trust," he said.

Kelleher noted that another "key ingredient to our success is we have chosen to work with very important and very good corporations." These are two of China's biggest state companies, Datang and Guohua. "They are teaching us to work in a Chinese working environment." In return, Roaring 40s shares its commercial expertise.

As for foreign wind turbine manufacturers like Vestas, Acciona, Gamesa, Nordex and Suzlon, which are building up factory capacity in China, they could be pushed out of the market by local companies in a very few years, said Paulo Soares from Indian Suzlon. His view is that foreign turbine companies should be building up their Chinese production lines with a view to exports.

Nordex's Thomas Richterich is of like mind. He sees China as a base for export as well as market. "Nordex China is to act as our bridgehead for our forays throughout all of Asia," he said.