China’s wind power industry faces slowdown as tariff cuts loom
Profitability will also be hit by grid bottlenecks and intensifying competition amid capacity oversupply
Mainland China’s wind farm developers and equipment suppliers face a substantial drop off in installation volume in 2018 when Beijing’s proposed cuts to wind power tariffs are expected to take effect, industry executives warned.
Profitability will also be hampered by further power grid bottlenecks and intensifying competition over price and sales volume amid wider capacity oversupply, they told the China Windpower conference.
“What worries us is [plant] utilisation, which has been falling much more than expected,” said Alvaro Bilbao, the Asia Pacific chief executive of Gamesa, one of the world’s largest wind turbine makers.
The Spanish firm has stayed in the China market – the world’s largest - despite its market share dropping to 0.27 per cent in 2014 from 36 per cent a decade earlier due to stiff competition from domestic rivals.
How can we be confident that our projects will be profitable during their 20-year operating period?
Hu Guodong, deputy general manager of state-backed, Hong Kong-listed wind farms developer China Datang Corporation Renewable Power, said he believes Beijing is likely to stop offering guaranteed subsidised wind power tariffs after 2018.