Mainland wind power industry undergoes painful shake-up

The entire supply chain of the mainland's wind power industry - from the manufacturing of components to the generation of power - is undergoing painful rationalisation after years of overly rapid and disorderly expansion.

And the pain will not go away any time soon, analysts say.

The enforced shake-up of the industry may last at least two years, industry spokesmen and analysts warn, since a transmission bottleneck will prevent suppliers from getting all their power to the market until the distribution network is expanded.

"Seven or eight ultra-high voltage transmission lines are planned for sending surplus power from the remote northern and western regions to the main consumption regions in the east and the south," China Longyuan Power Group's president Xie Changjun said last month.

"But it will take three to five years to fully resolve the transmission problem since each of these lines will take at least two to three years to build.

The shortage of transmission capacity meant that 16 per cent of the power generated by wind farms last year in the northern, northeastern and northwestern regions - accounting for 87 per cent of national output - was wasted since it could not be delivered to consumers, according to the State Electricity Regulatory Commission. That translated into revenue losses of 6.6 billion yuan (HK$8.09 billion).