Wind Power: Whats Behind Chinas Thriving Wind Market? - By Manuel Esta

Wind Power: Whats Behind Chinas Thriving Wind Market

? - By Manuel Esta

China, a nation overpopulated by the millions, is once again at the forefront of the wind industry in Asia. The dramatic change in wind market growth is largely due to advantageous government policies and subsidies.

The phenomenal growth from 402MW in 2001 burgeoned into a whopping 20,000MW (20 GW) in 2009. The Chinese government enacted national renewable energy law in 2006, and this promoted renewable energy throughout China. A mandate also declared that 70% of all wind power components must be sourced locally. This further contributed to China's already booming wind market.

However, China's power grid fell short in terms of growth in wind power production. Wind turbines were positioned in areas that are inaccessible to the grid. There were also units located in areas where a cheaper power source competes with the energy provided by the wind turbines.

China quickly gained back its impetus by first recognizing the problems in its wind industry. China put aside the 70% wind power component requirement in 2009 to give way to direct competition with foreign wind energy companies.

From six wind power producers in 2004, China contracted more than 70 in 2010. However, only less than 10 of these power producers are equipped with adequate R&D capabilities to keep up with the ever-changing market conditions. To make matters worse, about 70% of manufacturers produce only 37.5 meter wind turbine blades, which are far less efficient than the standard ones.

Because of this, profit margins played at only 10% in 2010, a far cry from the previous 20-30%. This, however, did not prevent top wind power companies from further seeking expansion in operations both locally and internationally.

Despite the problems encountered, China remained fixed in targeting its goal in the wind power market. China has its eyes set on having 100GW of wind power capacity by 2020. As of 2009, China already has 25GW of wind capacity. Most wind farms have 1.5MW to 3MW wind turbines.

Power players in the China wind market are Sinovel Wind Group Co., Goldwind Science and Technology Ltd., and Dongfang Electric.

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