RUDONG, China, June 4 The world's biggest wind
farm, China's Rudong, is unlikely to blow any business the way of
foreign turbine manufacturers such as Vestas (VWS.CO), Gamesa
(GAM.MC) and Suzlon (SUZL.BO), according to local officials.
Those foreign companies complain that despite jumping through
hoops to meet "localisation" rules requiring 70 percent of their
equipment to be sourced and built domestically, they are still
unable to win orders from state projects like Rudong, which form
the bulk of China's ambitious wind build-up over the next decade.
They also say China's efforts to eliminate turbines with
capacities of less than 1 megawatt is also a form of restrictive
practice that plays into the hands of domestic firms.
"Vestas and Gamesa have spoken to me many times about this,"
said Shi Liyan, the head of renewable energies at the National
Energy Administration, briefing reporters at Rudong, which lies
in the midst of a big expansion plan close to the prosperous
Yangtze River Delta, dubbed "Three Gorges on Sea", after the
world's largest hydropower project on the same river.
"The size of the turbine isn't a strict government policy,
but it is a market decision made by enterprises," he said. "It is
about wind conditions and the use of land, and investors are
willing to choose bigger turbines."
Preferential policies in China, including higher tariff
prices and lower rates of tax, were available to all wind power
manufacturers regardless of nationality, he said.
"Overall, the competitive awareness of Chinese enterprises is
stronger and they like to offer lower prices," he said.
"The European companies probably hope China will construct
(wind power projects) in accordance with European methods, but I
have told them, our countries are different culturally, legally.
There is no discrimination against foreign turbine manufacturing
companies in China."
GE PULLS OUT
In the ocean mist, it is impossible to pick out the sleek
white General Electric-built (GE.N) turbines already running for
several kilometres along Jiangsu's coastline.
The project owner -- the Jiangsu Longyuan Group, owned by
state power group Guodian -- is on the verge of expanding further
seaward, but the firms competing to be part of the project, due
to start in the second half of 2009, are likely to be domestic.
"Goldwind and Shanghai Electric will be among the bidders,"
said Jin Ji, the general manager of Jiangsu Longyuan.
Goldwind Science and Technology Co (002202.SZ) is China's
wind power leader, while Shanghai Electric Group (2727.HK)
(601727.SS) is China's top power equipment maker.
"We haven't told GE that they cannot compete. They have
themselves decided to pull out of the bidding," Jin said.
A spokesperson for GE in China could not immediately be
reached for comment.
Li of the National Energy Administration said China's wind
power capacity was likely to rise from 12,000 megawatts at the
end of 2008 to 30,000 megawatts by the end of 2011, a goal that
will need about 100 billion yuan ($14.6 billion) in investment.
Jiangsu, which has 700 megawatts of installed wind power
capacity, hopes to host the bulk of China's aggressive expansion
plans, Longyuan's Jin said.
"The Three Gorges has around 20,000 megawatts and we also
want to create about 20,000 megawatts of capacity. This plan
might seem far away, but the pace of development is really
He said most of the new capacity growth would be in the sea.
"You don't need to relocate people, there's no pollution and
you don't use land, so there are many advantages to building
(turbines) on the sea," he said.
But he conceded that by building turbines in the ocean
itself, China was heading into uncharted territory.
The company is currently looking into planting wind turbines
in the deep waters of the East China Sea, some 50-100 kilometres
away from the coast, but there are huge technical challenges.
"There hasn't been a successful deepwater turbine in the
entire world. Once they go into operation, they start to have
problems," he said. "There is one unit at Bohai Bay already in
operation, run by the China National Offshore Oil Corporation,
but it has also faced problems.
"We just don't know how these units will operate yet."
(Editing by Ken Wills)