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Eric Ng

'Harness the wind to the maximum to get the biggest bang when the circumstances are favourable,' a Chinese proverb says.

Last year, the wind power industry witnessed an investment frenzy. An estimated five billion yuan worth of new turbines began churning out electricity.

The big five state-owned power groups - Huaneng, Datang, Huadian, China Power Investment and Guodian - have all invested in wind, as have Guangdong Nuclear Power and hydro-power giant Yangtze Three Gorges Project Development.

Shenhua Group, a coal-mining company, has set itself a target of 1,000 megawatts of wind power capacity by 2010.

Petroleum companies are keen too. China National Offshore Oil Corp has made offshore wind power the focus of its renewable energy investment strategy and plans to bid for a project east of Shanghai.

At the end of last year, the mainland had 59 wind farms with 1,854 generators. Its installed generation capacity surged 65.6 per cent to 1,266  MW, making it the world's tenth-largest wind power producing nation.

Germany was the world's largest producer last year, with 18,000 MW of capacity. Then came Spain with 10,027 MW and the United States with 9,181 MW.

China's capacity may surpass 2,000 MW by the end of this year, according to the Chinese Wind Energy Association which represents both wind farm operators and equipment suppliers.

This is negligible, however,  compared with  the entire power industry's expected capacity of 575,000 MW by the end of this year.

Beijing has set ambitious targets for the wind power industry - 5,000 MW of generating capacity by 2010 and 30,000 MW by 2020.

To reach the 2020 goal, some 200 billion yuan of investment will be required, estimates Chan Ka-keung, managing director of renewable energy at CLP Power Asia, a  unit of Hong Kong's largest utility.

According to industry sources, the National Development and Reform Commission's targets originally were 4,000 MW for 2010 and 20,000 MW for 2020 but  state leaders prevailed upon it to accelerate the  pace  to help ease air pollution.

If the revised targets were met, wind power would account for about 0.6 per cent of China's electricity market in 2010 and 3 per cent in 2020. Last year, its share was 0.2 per cent.

'Industry whispers have it that the government wants to raise the 2020 target to 40,000 MW,' Chris Raczkowski, managing director of renewable energy consultancy Azure International, told a recent power conference in Hong Kong.

Internationally, wind power has captured the largest market share in Denmark (23 per cent), Germany (13 per cent) and Spain (12 per cent).

No one expects China's reliance on wind power to come  near such levels in the next two decades, given coal's dominance and the time required to build up the domestic turbine manufacturing industry.

China is estimated to have exploitable wind power resources of one million MW, of which 750,000 MW are located offshore. They are concentrated in the sparsely inhabited northern and western regions, as well as offshore of its densely populated coastal regions.

The Inner Mongolia Autonomous Region offers the biggest development potential, containing 40 per cent of national wind resources, the official Xinhua News Agency reported. The region stretches from the northwest to the northeast, forming almost half of the country's northern border but its advantage is its relative nearness to major energy markets such as  Beijing, and Hebei and Liaoning provinces.

According to the draft 11th Five-Year Programme (2006-2010) submitted to the State Council, the government aims to develop 30 wind power projects of at least 100 MW each in the next five years. Inner Mongolia, Hebei, Jiangsu and Gansu would even see individual wind farms as big as 1,000 MW.

Equipment suppliers are expecting explosive growth.

Goldwin Science and Technology, based in the Xinjiang Autonomous Region, was the nation's largest wind power equipment maker with a 26 per cent market share last year. According to a Reuters report, it hoped to expand sales eightfold from 2005  to 2008.

Goldwin has selected investment bank Goldman Sachs to help it arrange an initial public offering in the US to  fund its expansion, sources said. Both the company and the bank declined to comment.

China Aerospace Science and Industry (Casi), a national leader in defence-related production, last year joined forces with Spain's Acciona to build a US$29.8 million wind farm equipment plant in Jiangsu province.

Han Shuwang, head of Casi's civil products division, said at the time the company hoped to grab 20 to 40 per cent of the domestic wind turbine market in five years, with cumulative sales of 10 billion yuan.

Foreign players such as India's Suzlon Energy, Spain's Gamesa, Denmark's Vestas and GE Energy of the US have either opened or are setting up plants in China to reduce their production costs and comply with Beijing's requirement that at least 70 per cent of the components in wind turbines used in China should be domestically made.

The latest to join in the action is Germany's REpower Systems which last month announced a 300 million yuan turbine-making venture in Inner Mongolia with China's North Heavy Industries Group and the British wind farm developer Honiton Energy.



Utilities eye bang for the buck in wind power