HIGH WINDS IN CHINA

Numbers from China are always impressive. Reports of new coal plant construction and burgeoning greenhouse gas emissions are mind boggling. Numbers for New Energy building in China, especially wind energy installation, are also impressive.

Steve Sawyer, secretary general, Global Wind Energy Council: "China's wind energy market is unrecognisable from two years ago, It is huge, huge huge. But it is not realised yet in the outside world…A few years ago wind energy was boutique, something to show off to foreigners to prove how green they are but now it is a very serious part of their energy policy…They can make things happen so quickly in China compared to the west. When they make up their minds, it is incredible how fast things happen."

China’s installed wind capacity has doubled every year for the last 3 years and looks like it will double in 2008, 2009 and 2010. China is already or will soon be the world’s biggest turbine manufacturer and will likely lead the world in new generating capacity by 2010.

Huitengxile Huadian Wind Farm in Inner Mongolia is China’s biggest installation and supplies electricity to Beijing.

Li Yanjun, duty operator, Huitengxile Huadian Wind Farm: "We call it the Three Gorges of the sky. The hydroelectric dam there taps the water, here we tap the wind…I've been here since the beginning. The turbines are like my children. It took 10 years to reach 64,000 kilowatt/hours because that period was the research phase, but now the government is committed to wind energy so we can grow quickly."

NOW they can grow quickly? Doubling every year isn’t QUICKLY?

Nope. Jiuquan in Gansu province will soon pass Huitengxile Huadian and become a bigger biggest wind installation. Jiuquan’s 1st phase will be 3,800 megawtts. When it is completed it will be more than 10,000 megawatts. China is planning the long-term development of a national wind corridor and the necessary new transmission to support it in Gansu province.

That’s the same concept T. Boone Pickens called for on the midwestern plains. Does this represent a classic challenge between free markets and central planning?

The China turbine industry has been dominated by multinational giants Vestas (Denmark), Gamesa (Spain) and GE (the U.S.) but Chinese manufacturers took 50% of the market in 2007. The biggest player is Goldwind, based in Urumqi. It specializes in the world wind industry standard 1.5 megawatt turbine and is planning a 3-megawatt model for 2009.

Sebastian Meyer, director of research/advisory, Azure International: "It is probably going to be the most competitive turbine market in the world very quickly. Elsewhere, it is a seller's market. Now in China, we are on the tipping point of it becoming a buyers' market…In 2008 it is likely to grow 1.5 times so growth is actually decelerating, but in terms of volume, size and scale this has become a respectable market globally."

When there is a report of such growth in the west, there is an inevitable next question: Is it a bubble?

Due to huge demand for electricity and tightening coal mine safety regulations, domestic coal prices are so high power plants in southern China import coal from Australia.

The logic is obvious: Spend to develop domestic wind instead of importing coal.

The only obstacles to more wind development in such a market: New coal and hydro are still cheaper in China.

But the air quality in China is so bad from coal and water shortages are so severe from hydro projects and the impacts of radical weather events from global climate change are so unavoidably apparent that the logic of wind will inevitably become irresistible.

China President Hu Jintao: "Our task is tough, and our time is limited. Party organisations and governments at all levels must give priority to emission reduction and bring the idea deep into people's hearts…"

Everything about China wind here.

The working man. (click to enlarge)

Energy in China: ‘We call it the Three Gorges of the sky. The dam there taps water, we tap wind.’ Wind energy output is trumping targets, and competition between operators is fierce, but coal still reigns supreme.
Jonathan Watts, July 25, 2008 (UK Guardian)

WHO
China’s wind industry, its political leaders and its power companies

WHAT
The ferocious winds of Dabancheng drive one of Asia’s biggest wind installations. It exemplifies the ferocious growth of China’s wind industry, part of Chinese leaders’ efforts to turn around the terrible Chinese air quality and environmental situations.

The trend is toward domestic development. (click to enlarge)

WHEN
- From 2005: China’s wind capacity has grown 100% or more per year.
- China goal: To obtain 15% of its power from New Energy sources by 2020.
- The 1st phase of the Jiuquan wind project is scheduled to be completed in 2010.
- 2004: The share of world wind investment from China, India and Brazil - 12%.
- 2007: The share of world wind investment from China, India and Brazil - 22%.
- 2009: Goldwind, China’s biggest turbine manufacturer, will introduce its 3-megawatt turbine.

WHERE
- Dabancheng, a 6-mile wide plain, was once part of the Silk Road.
- Dabancheng is near the city of Urumqi in Xinjiang, the most westerly region of China.
- Bigger facilities operating or under construction in Gansu, Inner Mongolia and Jiangsu.
- Goldwind recently sold turbines to Cuba and (with other Chinese turbine companies) is negotiating with Pakistan, the Philippines and South Korea.

WHY
- Winds on the Dabancheng plain have blown trains off the tracks and overturned trailer trucks. The Dabancheng winds now drive 118 turbines tha send electricity to nearby Urumqi.
- Chinese policy makers doubled predicted wind capacity for 2010 because the 1st goal of 5 gigawatts came 3 years early.
- 202 projects now produce 6 gigawatts. 445 sites are being planned or developed. One estimate has 130 gigawatts in the pipeline.
- Goldwind, China’s turbine manufacturer, has grown 100% or more every year for the last 8 years.
- The China wind industry is dominated by 5 state-owned utilities and a few other companies. They kicked off the industry but competition is growing.
- Greenpeace says China can have 120 gigawatts of wind by 2020, 10% of its power.

click to enlarge

QUOTES
- Junfeng Li, secretary general, China Renewable Energy Industries Association: "China is witnessing the start of a golden age of wind power development, and the magnitude of growth has caught even policymakers off guard…It is widely believed that wind power will be able to compete with coal generation by as early as 2015. That will be the turning point in China, which by then will be the world's largest energy consumer."
- Li Yanjun, duty operator, Huitengxile Huadian Wind Farm: "This is the future in China…Everyone is opting for big turbines. It is more economic to have one 1,500 kw turbine than two 750kw turbines and the maintenance costs are lower."
- Unnamed Goldwind executive: "There is still a gap between Chinese companies and western companies in terms of research and development because we started later…Most of our technology comes from Germany. But in the first half of this year, we bought the company that taught us how to do things. That has solved the problem of research and development. Now we want to start selling overseas."
- Sebastian Meyer, director of research/advisory, Azure International: "China is catching up fast…The market is ripe for China not replicating what Europe and US did in the past, but doing it better."