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China idles 40% of windpower turbine output capacity

"The overcapacity in manufacturing is caused by slower growth in wind-farm construction due to power-grid constraints," Dave Dai, an analyst with CLSA Asia Pacific Markets, said by telephone from Hong Kong. "The issues with the grid aren't expected to ease in the near term but should improve with the development of smart-grid investment over time."

China is idling as much as 40 percent of its wind-turbine factories following a surge in investment driven by the government's renewable-energy goals, the vice president of Shanghai Electric Group Corp. said.

Prices of turbines have tumbled more than 30 percent from 2004 levels in the world's third-biggest windpower market by generating capacity because there are "too many" plants, Lu Yachen said in an interview in Beijing today.

China set a goal to increase its power-production capacity from wind by fivefold in 2020, spurring investment in turbine factories. There is a surplus of such plants, National Energy Administration head Zhang Guobao said in September, without giving figures.

"The overcapacity in manufacturing is caused by slower growth in wind-farm construction due to power-grid constraints," Dave Dai, an analyst with CLSA Asia Pacific Markets, said by telephone from Hong Kong. "The issues with the grid aren't expected to ease in the near term but should improve with the development of smart-grid investment over time."

Currently, only part of China's power grid is able to take delivery of the electricity produced by renewable energy. Grid constraints in China may leave as... more [truncated due to possible copyright]  

China is idling as much as 40 percent of its wind-turbine factories following a surge in investment driven by the government's renewable-energy goals, the vice president of Shanghai Electric Group Corp. said.

Prices of turbines have tumbled more than 30 percent from 2004 levels in the world's third-biggest windpower market by generating capacity because there are "too many" plants, Lu Yachen said in an interview in Beijing today.

China set a goal to increase its power-production capacity from wind by fivefold in 2020, spurring investment in turbine factories. There is a surplus of such plants, National Energy Administration head Zhang Guobao said in September, without giving figures.

"The overcapacity in manufacturing is caused by slower growth in wind-farm construction due to power-grid constraints," Dave Dai, an analyst with CLSA Asia Pacific Markets, said by telephone from Hong Kong. "The issues with the grid aren't expected to ease in the near term but should improve with the development of smart-grid investment over time."

Currently, only part of China's power grid is able to take delivery of the electricity produced by renewable energy. Grid constraints in China may leave as much as 4 gigawatts of windpower generation capacity lying idle, Sunil Gupta, managing director for Asia and head of clean energy at Morgan Stanley, said in November.

‘Fierce' Competition

"Most of China's wind-turbine makers are suffering from fierce competition and some smaller players may be forced to shut because of the squeeze in profits in the future," Lu said. The number of windpower equipment makers has surged to 78 from about six in 2004, he said.

Shares in Vestas Wind Systems A/S, the world's largest turbine maker, fell 0.3 percent to 277.9 Danish kroner in Copenhagen at 11:57 a.m. local time. That brought their loss for the year to 12 percent, greater than the 10 percent drop in the 86-member WilderHill New Energy Global Innovation Index.

Even with price pressure, the market will grow 15 percent in 2010, MAKE Consulting forecast March 4. China, Canada, Brazil, Romania and the European offshore segment will lead the gains, while all other markets will decrease or stay stable, the Hoejbjerg, Denmark-based wind-turbine consultant said.

China is unlikely to export more wind turbines currently because "homegrown technology is not as competitive," Lu said, without elaborating.

Order Decline

Shanghai Electric Group expanded into wind-turbine manufacturing in 1997 to tap growing demand for clean energy sources including the sun as China seeks to scale back consumption of more polluting coal.

Domestic orders for equipment used in coal-fired power plants received by Shanghai Electric Group Corp., the parent of Hong Kong-listed Shanghai Electric Group Co., fell between 30 percent and 40 percent last year while exports rose, Lu said.

As much as 90 percent of overseas orders for coal-fired power equipment came from India, according to Lu. "Our coal- fired power equipment business will be in trouble without India," he said.


Source: http://www.bloomberg.com/ap...

MAR 11 2010
http://www.windaction.org/posts/25062-china-idles-40-of-windpower-turbine-output-capacity
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