China offers research subsidy to wind turbine firms

BEIJING (Reuters) - China plans to offer a small subsidy to domestic firms that develop new wind turbines in a bid to support home-grown innovation, industry regulations published by the Finance Ministry showed.

Chinese wind turbine makers can get a payout of 600 yuan ($87.79) per kilowatt for the first 50 units they produce of any new turbine with capacity of 1 megawatt or more, the regulations said.

The subsidy should be shared equally between manufacturers of key parts and the companies that assemble the finished product, according to the ministry Web site (www.mof.gov.cn).

Only turbine manufacturers with majority Chinese ownership will be eligible for the support, which is designed to foster domestic technology development.

"The funds should be used specifically for the expenses associated with the research and development of new wind power equipment," the regulations said.

The industry is growing fast as Beijing rushes to boost use of clean energy and cut greenhouse gas emissions.

By the end of this year China's installed wind power generating capacity is expected to top 10 gigawatts (GW), the official target for the end of the decade, the vice-president of the Chinese wind energy association said in January.

It is also expected to be the top wind turbine producer next year, with local content regulations that require 70 percent of wind turbine parts to be manufactured in China giving Chinese contenders a massive boost.

But as turbine manufacturers proliferate to cash in on the new market, wind farm developers say they have faced quality issues with some products from less experienced manufacturers.

(Reporting by Beijing Newsroom, Editing by Emma Graham-Harrison and Jonathan Hopfner)