80% Chinese Wind Turbines Companies might be Bankrupted as Smaller Producer to lose Government Subsidies (NDRC,MIIT) – Beneficial for Sinovel,Mingyang,Goldwind

12 May, 2011
China,DongFang Electric,Goldwind,Ming Yang,Shanghai Electric,Sinovel,Wind Energy

The Chinese government is set to remove the subsidies to small wind turbine companies in China under a new rule which will be implemented from June 1 .Note the authorities have been concerned about the over investment in the green energy industry boosted by the strong domestic market.The government has already cracked down on small polysilicon producers which  were producing polysilicon at uneconomic costs and causing environmental hazards as well.The Chinese government controls most of the funding through its massive state owned banks and gives a number of incentives to industry as well.With the removal of tax breaks,cheap land and easy loans,it will be difficult for even the bigger wind turbine companies to survive leave alone the small ones.

Chinese companies have become the low cost leaders in the Wind Equipment Industry and sell much below Western competitors.Leading WTG companies from the West like Vestas and Gamesa are reeling from Chinese competition and slowdown in Western markets.Suzlon too has been affected as Korean shipbuilders and Chinese wind producers have become major players.

Chinese Wind Industry facing huge Overcapacity

The Chinese Wind Industry has around 80 wind turbine companies many of which are quite small and dont’ have the money and expertise to compete in the international markets.Though the Chinese dominate the top global wind turbine companies list with 7 of the top 15 WTG companies Chinese,many are not competitive.Sinovel which has become the largest wind turbine company has recently canceled order for Electrical Control Systems from American Superconductor citing high inventory.Other Wind Turbine companies are in even more trouble as the industry suffers from huge overcapacity.The Chinese Wind Capacity has grown at 100% CAGR to reach 18 GW in 2010.However this strong growth has led to saturation of the wind market and price wars are being seen in China.Exports to other countries have been difficult as the cost of transportation of Wind Turbines is high.Besides Chinese Wind Companies don’t possess strong technology and quality unlike established ones like Vestas,Gamesa,GE and Siemens.Though Dongfang and Shanghai Electric have managed to win some Turbine Orders in India,the export percentage is negligible.Wind Power in India too has reached a stable growth level and a number of wind companies in India are fighting for marketshare as well.

Smaller Chinese Wind Companies to be Wiped Out

It is likely that the smaller Chinese Wind Companies will go bankrupt as the Wind Industry reeling under overcapacity will unlikely see acquisitions of these smaller companies by bigger players like Goldwind,Ming Yang and others.The government wants these smaller wind companies to sell their older smaller turbines to outside markets,however that too seemly improbable given that the largest wind turbine companies have failed to export any turbines in a major way till now

China Fine-Tunes Wind Turbine Industry with New Guidelines

China’s wind power industry, which has developed by leaps and bounds over the past five years, will 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).Industry officials say that once 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.However, under the new guidelines, China will not extend these preferential policies to companies that produce wind turbines with 2.5-megawatt-capacity or lower. Instead, the policies will encourage the development of larger-capacity turbines, as well as components for control systems and converters for these larger turbines.However, under the new guidelines, China will not extend these preferential policies to companies that produce wind turbines with 2.5-megawatt-capacity or lower. Instead, the policies will encourage the development of larger-capacity turbines, as well as components for control systems and converters for these larger turbines.

Wind Industry in India – Chinese Wind Turbine Manufacturer Shanghai Electric enters following Dongfang courtesy KSK Energy

11 Apr, 2011
DongFang Electric,Energy,Shanghai Electric,Wind Energy

Wind Energy Companies in India were already facing trouble when China’s largest power equipment producer and the 3rd largest Wind Turbine Manufacture Dongfang Electric won major Wind Contracts from Power Producers.Note Chinese companies have become the low cost leaders in the Wind Equipment Industry and sell much below Western competitors.Leading WTG companies from the West like Vestas and Gamesa are reeling from Chinese competition and slowdown in Western markets.Suzlon too has been affected as Korean shipbuilders and Chinese wind producers have become major players.India is the world’s fifth biggest wind energy market and is expected to continue to build 1.5-2 GW wind power plants per year for the next decade.

Now Shanghai Electric has also won a 250 MW contract to supply 125 2 MW Turbines to KSK Energy Ventures.KSK Energy Ventures has earlier awarded  a contract for 66 units of 1.5 MW direct-drive wind-power equipment from Dongfang.Note Direct Drive Turbines are not available in India presently.Note Shanghai Electric is the 6th largest state owned Wind Power Equipment Company in China.Here is a list of the other major WTG Companies in China.This sales is also Shanghai Electric’s first major international Wind Turbine Sale.

Major Wind Energy Countries from China
State-owned or State-controlled Enterprises

  1. Sinovel
  2. Goldwind
  3. Dongfang (DFST)
  4. United Power
  5. HARA XEMC
  6. Sewind (Shanghai Electric)
  7. Windey
  8. Beizhong
  9. CSR (ZhuZhou)

Private Wind Energy Companies in China

  1. Mingyang
  2. CCWE (Huachuang)
  3. Hewind
  4. CPC New United

Shanghai Electric to supply 125 wind turbines to KSK Energy

China”s Shanghai Electric (SE) has said it has signed a deal with KSK Energy to export 125 units of 2-MW wind turbines.India is expected to become a major destination of the company”s export strategy, absorbing one half of its exports, including thermal power units and wind turbines, an executive of SE is quoted as saying today by Chinese official newsagency Xinhua.So far, Shanghai Electric, one of China”s largest equipment manufacturers, had exported 5 MW level wind turbines, with three to Britain and two to Thailand.

To tap the emerging new energy business, Shanghai Electric which had set up a wind power equipment manufacturing branch in 2006 is able to produce 1.25 MW wind turbines with Germany”s Dewind technology, 2 MW wind turbines with Germany”s Aerodyn technology, and independently designed 3.6 MW offshore wind turbines, he said.

Chinese capture 7 of the Top 15 Positions in rankings of Wind Turbine Manufacturers

19 Mar, 2011
China,DongFang Electric,Goldwind,Ming Yang,Offshore Wind,Sinovel,Wind Energy

The Chinese have not only captured most of the top rankings of the biggest solar panel producers in the world,they have extended their lead into Wind Energy as well.7 of the top 15 positions in Global Wind Turbine Producers are Chinese according to a new ranking.Sinovel and Goldwind have become the No.2 and No.4 rankers in the world with more than 10% global marketshare each.Dongfang is the other top Chinese wind power company with a 7% marketshare.United Power is at 10.Other top Chinese wind energy companies are Mingyang,Sewind and XEMC China.

The slowdown in the Western Markets has led to huge problems for dominant Western firms like Gamesa and Vestas.It has led to painful restructuring for Vestas which has fired thousands of  workers from its domestic manufacturing base in Denmark.Gamesa has also seen management and ownership turmoil as WTG Orders have evaporated and its competitive position has eroded.GE,Suzlon,Gamesa and Vestas are all investing in the Chinese market which has grown exponentially in recent times and which is expected to form 50% of the Wind Energy Demand till the next few years.

Strong Chinese Wind Market,Domestic Content Requirements Key Reason for Chinese WTG Players

Chinese companies have risen from virtually nothing 5 years ago to become Top 5 Global Wind Energy Players.The Chinese companies have seen massive growth on the back of a strongly growing domestic market.China which now accounts of 50% of the world Wind Turbine market in 2010 is expected to see continued strong growth with the Chinese government setting a target of more than 100 GW by 2015.The growth of  the Chinese Turbine Producers has been mainly due to the domestic content requirement set by the Chinese government earlier.The government owned utilities also favor the domestic companies leading to their astounding  growth.

China rivals narrow gap on wind leader Vestas

Chinese manufacturers accounted for four of the top 10 and seven of the top 15 positions in the rankings, it said. By comparison, European wind turbine makers held six positions in the top 15 in 2010, it added.The Global Wind Energy Council (GWEC) forecast on Tuesday that global wind power capacity will more than double by 2015 — growing to 450 gigawatts from 194.4 GW at the end of 2010.

MAKE Consulting gave the following ranking of wind turbine manufactures, and their shares of the total 2010 market:

Company Country Market share (pct)

1) Vestas Denmark 12

2) Sinovel China 11

3) GE United States 10

4) Goldwind China 10

5) Enercon Germany 7

6) Gamesa Spain 7

7) Dongfang (DEC) China 7

8) Suzlon India 6

9) Siemens Germany 5 10) United Power China 4 11) Mingyang China 3 12) REpower* Germany 2 13) Sewind China 2 14) Nordex Germany 2 15) XEMC China 1

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List of Top Wind Power/Turbine Companies/Stocks – Chinese Rising

10 Mar, 2011
China,DongFang Electric,GE,Germany,Goldwind,Ming Yang,Offshore Wind,Siemens,Sinovel,USA,Vestas

Wind Turbine (WTG) Companies are increasingly facing competition from a host of new entrants into the industry.The dominants firms like  Vestas,Gamesa,GE,Siemens and Suzlon have seen their stock prices fall steeply due to declining revenues and margins.A number of  Giant Industrial Firms have entered the Wind Energy Industry to diversify from the slow growth in their own sectors.Korean Shipbuilders have invested heavily in the Wind Turbine Manufacturing en masse to take advantage of the secular growth of Wind Energy.Chinese companies have risen from virtually nothing 5 years ago to become Top 5 Global Wind Energy Players.The Chinese companies have seen massive growth on the back of a strongly growing domestic market.China which now accounts of 50% of the world Wind Turbine market in 2010 is expected to see continued strong growth with the Chinese government setting a target of more than 100 GW by 2015.Here is a list of the major Wind Power Companies in the World.

1) Vestas – Vestas the largest Wind Turbine Company in the World has been facing one setback after another.The Danish Company which used to be a Green Investor Favorite till a couple of years can’t seem to find a buyer these days.Stiff competition from China,Slowdown in Wind Energy Farms in the West and now  Wind Blade Problems have formed a perfect storm for this company.

2) General Electric (USA) - General Electric is looking to Invest Heavily in the new Age Green Industry like other Industrial Giants like Siemens,ABB etc.General Electric or GE as it is popularly known is one of the biggest players in the Green Industry globally.It generated $18 billion in Ecomagination revenues in 2009 with $1.5 Billion in Investment.General Electric like other industrial conglomerates like Siemens,Areva and others are in fact low risk plays in the Green Investing sector.GE is strong across most of the Green Sectors today particularly in the area of Smart Grid and Energy Efficiency.GE has a 40-50% marketshare of the US market which is the 2nd largest in the world.Due to its vertical integration,it has one of the highest margins in the industry and remains a formidable player with its acquisition Enron’s Wind Turbine arm proving to be a masterstroke.

3) Gamesa (Spain) - Gamesa the Spanish Wind Turbine Producer and Wind Farm Operator has faced the worst year of its history in 2010.Like Vestas and Suzlon,2010 has been a cruel year for the Wind Industry in the Western Markets and the WTG Players dependent on those markets.Gamesa is one of the worst performing Wind Energy Stocks in 2010.Gamesa is looking to restructure its operations and concentrating on the offshore wind market by focusing on higher megawatt turbines.Gamesa is leading a massive Spanish Research Effort to develop a colossal 15 MW Turbine meant for the fast growing offshore wind sector.But this is a long term plan with 2020 set as the target for the complete development of this new Turbine.Meanwhile Gamesa has become the target of takeover speculation by one of the bigger Chinese Wind Turbine players like Sinovel,Goldwind etc.Gamesa has seen its revenue fall by 28% and profits by  71% with Operating Margins of 4-5%.Things don’t look too good for 2011 either though Orders have started ticking up

4) Suzlon Energy is the biggest Indian Wind Energy Company by far with 4-5 Gigawatts of WTG Capacity per year.However Suzlon has languished in red ink since the beginning of the Global Financial Crisis in 2008.The company started by Tulsi Tanti in 1995 was a shining example of Asian CleanTech with a 10% global marketshare and ranking amongst the top 5 Wind Turbine Makers .Suzlon buoyed by its success had bought controlling equity stakes in Turbine Gears producer Hansen Transmission and European Wind Turbine producer Repower.Suzlon seems to be recovering with increase in orders particularly at its German subsidiary RePower,however a huge debt burden poses problems.

5) Siemens – The largest Green Company in the world,Siemens has a strong presence in the Wind Turbine Segment.The company is strong in Europe and is now expanding to emerging markets like Asia.Given its huge technological strengths in electrical equipment,power transmission and large project construction,Siemens is looking for a dominant role in the growing offshore wind market as well.

6) Goldwind - The Wind Energy Market in China has witnessed the growth of almost 90 companies with little differentiation competing fiercely on prices.This has led to low to zero margins for most of these companies.Goldwind has managed to rise above the competition by becoming the single largest Chinese player and looks to takeover the No.1 position in the world in the next few years.By taking bold risks and with the support of the government,Goldwind has become a threat to the established Wind Turbine Order

7) Sinovel – The 2nd largest Chinese Wind Power Company managed to do a successful IPO in Hong Kong last year despite long delays.The company is looking to expand in the foreign markets particularly the US market and has gotten a local management to help it penetrate the newer market.

8) Dongfang Electric - Dongfang Electric Corporation,China’s largest power equipment producer  is also the 3rd biggest Wind Turbine Producer in China as well .The company has managed to grow impressively like the rest of the Chinese and is looking to expand in foreign markets as well.Recently  bagged a 276 MW $203 million WTG supply contract with Abhijeet Group.

9) Ming Yang Power- Ming Yang is the only significant non-state owned Chinese Wind Energy Company with a 2009 marketshare of around 4%.The Company has a very short history installing its first Wind Turbine just 2 years ago and has seen an exponential growth riding on the incredible Wind Industry Growth in China.

10) Mitsubishi Heavy Industries , the massive Japanese Conglomerate is looking to overseas market for growing its Wind Energy Division.Mitsubishi like other Japanese companies are looking towards Green Industry for growth.Japan already possesses solid strengths in this area with its traditional focus on resource efficiency.While companies like Panansonic and Toyota looks towards Electric Vehicles and Batteries,Sharp and Kyocera towards Wind Energy,Mitsubishi is focusing its energy on the Wind Sector.

11) Enercon – Enercon is a privately listed German company which has almost 22 GW of Wind Turbine Installations in the world.Enercon was the first company to build a gearless Wind Turbine which is one of the biggest innovation in the Wind Energy Industry in recent times.

12) Nordex - Nordex is another German company in the Wind Turbine Industry which was the first one to build a 1 MW Turbine.The company has  not managed to grow fast as the other German companies like Enercon,RePower and Siemens.

13) United Technologies Corporation (UTC) - This US Giant Technology Conglomerate is still a small player in the World Wind Power Market.However it has increased its footprint by acquiring struggling independent US Wind Power company Clipper.

Summary

The list of the top Wind Turbine Companies in the world is changing rapidly with the entry of the Chinese companies such as Goldwind and Sinovel.Though it will take time for these companies to penetrate the foreign markets,their low cost has made the formidable rivals though quality remains suspect.On the other hand foreign WTG Leaders like Gamesa,GE,Suzlon are rapidly expanding in China and other emerging markets to lower their costs and gain access to these fast expanding markets.Newer companies like Samsung,Hyundai,Northrop  Grumman are also entering the Wind Power field as Offshore Wind Energy becomes a multi-billion dollar industry

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Alarm Bells Ring for Indian Domestic Wind Players as Chinese Giant Dongfang bags first Indian WTG contract

21 Dec, 2010
China,DongFang Electric,Energy,Goldwind,Ming Yang,Suzlon,Wind Energy

Dongfang Electric Corporation,China’s largest power equipment producer has bagged major contracts in India.Dongfang Electric is the 3rd biggest Wind Turbine Producer in China as well and has managed to bag a 276 MW $203 billion WTG supply contract with Abhijeet Group .This is the first major contract wind in the Wind Equipment Sector for a Chinese company and could be start of a major trend.Dongfang has also won a small a massive $2.5 billion contract to supply 6. GW of super critical coal equipment to KSK Energy. Note Chinese companies have become the low cost leaders in the Wind Equipment Industry and sell much below Western competitors.At almost $700,000/MW,the Turbine order is a steal for the Abhijeet Group and cannot be matched by Indian or Western players.Leading WTG companies from the West like Vestas and Gamesa are reeling from Chinese competition and slowdown in Western markets.Suzlon too has been affected as Korean shipbuilders and Chinese wind producers have become major players.Using domestic content requirements and technology transfer,Chinese companies have become top global producers from zero presence just 5 years ago.

Chinese Wind Turbine prices have fallen by almost 25% over the last year  due to heightened competition in China’s wind market.This has made local companies look outwards for expansion despite a burgeoning domestic market.Goldwind,Ming Yang have already raised capital from the stock markets as they look to increase their scale further.Like China’s Huawei and ZTE which have captured the Telecom Equipment market using low cost and Chinese Bank Lending,Dongfang is looking to capture the power equipment market as well.Note the proposal to put a 10% import duty on power equipment imports has been put in cold storage.There are a number of  small wind players in India which are trying to find a foothold alongwith India’s largest company Suzlon.The entry of Chinese Wind Companies should ring loud alarm the domestic industry as the Chinese could overwhelm the local industry here.The scale,size and government support of Chinese companies are on a simply different level compared to Indian companies.Like the Solar Industry,the Indian government might have to give a thought on domestic content for Indian Wind Industry as well.

Dongfang bags 20.4 bn yuan Indian, Chinese orders

China”s leading power equipment manufacturer Dongfang Electric Corporation has received orders worth around 20.4 billion yuan from Indian and Chinese companies.In a regulatory filing to the Hong Kong Stock Exchange, Dongfang Electric said it has bagged three orders in the field of thermal power export, wind power export and nuclear power amounting around 20.4 billion yuan.

The company has bagged two orders from India — one from Abhijeet Projects and the other from KSK Energy worth USD 2.5 billion and USD 203 million, respectively — the filing added.As per the contract, Dongfang Electric would supply 10 sets of 660 MW super-critical units for burning coals power stations to Abhijeet Projects and 166 units of 1.5 MW direct-drive wind-power equipment to KSK Energy.The Dongfang Electric-KSK Energy contract entails the first time bulk export of wind power equipment made in China and also the first time for wind power equipment of Dongfang Electric entering into the overseas market.

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