China

China

Law sparks record year of development -- Market fires up with 500 MW

With just under 500 MW in new wind capacity added in 2005, China's wind market finally showed signs of powering up, growing 63.5% in a single year. The 498 MW installed brought the country's cumulative capacity to 1260 MW by the end of 2005.

The sudden surge in development coincided with a renewed sense of confidence in China's market after the government passed the country's renewables law in February 2005. It came into effect at the beginning of this year and is designed to achieve China's goal for 10% of its electricity to come from renewables by 2010 and 15% by 2020.

The year ended with a further bang when China upped its wind target from 20,000 MW to 30,000 MW by 2020 (Windpower Monthly, December 2005). Most of the wind industry's leading turbine manufacturers have confirmed plans to establish or increase manufacturing capability in the country to meet the legislation's mandatory requirement for local content in turbine supply -- 50% for projects approved prior to 2005, and 70% as of last year.

Turbine supply

In all, by the end of 2005 China had 1859 turbines across 59 wind farms installed in 15 provinces and regions, with 26 units totalling 2.2 MW decommissioned, according to primary statistics compiled by China Hydropower Engineering Consulting Group Company. Even with legislation requiring a set proportion of local content in manufacturing of products, the overseas grip on the market for turbine supply also held steady, with three of the five leading suppliers from abroad. Spain's Gamesa again led the field, maintaining its 36% share of the annual market with 179.35 MW installed across seven projects in 2005.

China's undisputed leader for domestic turbine manufacturing, Goldwind, is hot on Gamesa's heels, having increased its share of the market from 20% in 2004 to just under 27% in 2005 -- perhaps a sign that the local content mandate is starting to have an impact. It outperformed both GE Energy and Vestas to rise from third place in 2004 to second place, with 132.45 MW installed across seven projects, compared to the 93 MW installed by GE and the 73.1 MW installed by Vestas, which slipped from second place in 2004 to fourth in 2005, behind its US rival.

Purchase price

With all the main overseas players implementing plans for local manufacturing (Windpower Monthly, February 2005), it remains to seen whether or not Goldwind will maintain its impressive rate of growth. The surprise announcement in January that purchase prices for wind will continue to be based on competitive bids for government concessions rather than a system based on fixed prices in standard offer contracts, as many had long expected, could play in its favour. Some fear that without guaranteed purchase prices, Chinese market growth may slow (Windpower Monthly, February 2006).

Most of the country's regions or provinces are now active in wind power development. While the north-east province of Jilin topped the list for the most capacity installed in 2005, with a total of 79 MW to bring its cumulative installed capacity to 109 MW, it was Xinjiang in the north west of the country which rose from 2004's third place to pole position in terms of cumulative capacity -- it installed 68 MW last year, taking its total to over 180 MW. Inner Mongolia falls to second place having installed just 30 MW in 2005 to bring its total to 166 MW. Meanwhile Hebei province achieved 73 MW last year, the second largest volume installed in a single province in 2005. Hebei now has 108 MW of wind, ranking it the seventh province measured by installed wind generation capacity.

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