China's Wind Power Development to Show Three Major Trends in 12th Five-Year Plan

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Researched by Industrial Info Resources China (Beijing, China)--During China's 12th Five-Year Plan (2011-2015), the country's wind power development will show three major trends:

• Steady growth in installed capacity with an increasing proportion of offshore wind
• Capacities of individual units will be larger, and units will cost less
• Wind power equipment manufacturers will experience high merger and acquisition activity, with profit shifting toward developers.

The predicted trends were iterated at the International Wind Energy Conference & Expo 2011, held recently in Beijing.

Because of the rapid wind power development in the past years, the accumulative installed capacity of wind power in China is quite large, and the growth in installed capacity will continue steadily into the future, according to Pengfei Shi, the vice director of the Wind Energy Commission of the China Renewable Energy Society. It's expected that the annual average growth of the wind power market in China will about 15-20 gigawatts (GW) per year during the 12th Five-Year Plan. Offshore wind installations will represent about 1 GW per year.

The generating capacities of individual wind turbines will become larger as costs of the units decline. Huayi Electric Apparatus Group (SHA:600290) (Yueqing, Zhejiang), one of the listed leading wind power manufacturers in China, just announced that its is researching the development of a 6-megawatt (MW) wind turbine. Sinovel Wind Group (SHA:601558) (Beijing), another leading wind power manufacturer, has announced its research and development program for a 10-MW wind turbine. Following the improvement in wind power technology, wind turbines become cheaper and have higher efficiencies. The cost of wind power projects will also be reduced, following the reduction in financing cost and the gaining of operational experience. The improvement in the reliability of wind turbines will also reduce the average cost for operation and maintenance.

Wind power equipment manufacturers will see profits shift to wind power developers. Presently, China has more than 80 wind turbine manufacturers. The top 20 manufacturers control 96% of the market. Many small and medium-size turbine manufacturers will be forced out of the market. Following the further consolidation in the market, profits will shift to development.

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