WIND ENCOURAGED IN CHINA

China Fine-Tunes Wind Turbine Industry with New Guidelines; China's wind turbine manufacturing industry will undergo significant changes in the wake of new industrial restructuring guidelines which will come into effect on June 1.
Zhangin, May 10, 2011 (Xinhua via CRI English)

"…China's wind power industry, which has developed by leaps and bounds over the past five years, will [as of June 1] have to follow a new series of guidelines and restrictions, according to the 2011 edition of the Guideline Catalogue for Industrial Restructuring, a set of policy guidelines recently released by the National Development and Reform Commission (NDRC).

"The new guidelines state that "new energy" sources, including wind energy, shall be considered as a separate category for ‘encouraged development.’ The 2005 edition of the guidelines stated that wind energy and other sources of clean energy would be grouped in with traditional sources."

click to enlarge

"…[O]nce an investment project is listed in the ‘encouraged development"’ category, the company or companies behind the project can enjoy preferential treatments such as floating shares in the stock market, lighter requirements for new bank loans and tax breaks…[But] China will not extend these preferential policies to companies that produce wind turbines with 2.5-megawatt-capacity or lower…[T]he policies will encourage the development of larger-capacity turbines…[and their] components…

"In March 2010, the Ministry of Industry and Information Technology (MIIT) issued a circular in which it asked for public opinions on the management of the country's wind power industry. In this document, the MIIT stated that new wind turbine manufacturers must have the ability to produce wind turbines with 2.5 megawatts of power generating capacity or higher."

(from Energy Research Institute of NDRC & China Renewable Energy Industry Association March 2010 - click to enlarge)

"Industry officials said that with the new guidelines, China has finished fine-tuning its wind turbine manufacturing industry's policies, and that the production of outdated wind turbines will be eliminated…[This may elimate as many as 70] of China' s 80-some wind turbine manufacturers…[T]he top 10 wind turbine makers account for about 80 percent of the Chinese market, and the top 15 have claimed about 95 percent of the market share…[Officials expect that within] the next three to five years, about 80 percent of China's wind turbine makers will disappear through mergers and acquisitions…

"Wind turbine manufacturers that can't meet the new regulations still have the option of "going global" by selling their outdated wind turbines to other countries…[but] the overseas market is out of reach for most Chinese wind turbines manufacturers, who are largely unfamiliar with international market rules and legal environments…China exported just 13 wind turbines in 2010…less than 0.5 percent of the export figure originally predicted by Chinese wind turbine manufacturers for that year."