Dongfang Electric Signs Supply Contract for Six Wind Power Projects in Inner Mongolia

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Researched by Industrial Info Resources (Sugar Land, Texas)--Dongfang Electric Corporation (SHA:600875) (Chengdu, Sichuan) has signed a contract with Huaneng New Energy Holding Company Limited (Beijing), a subsidiary of the China Huaneng Group (Beijing), to supply wind turbines that will generate 297 megawatts (MW) in six wind power projects in Inner Mongolia. The $279 million contract follows another large contract worth $643 million that was signed in May.

Despite experiencing major losses after the magnitude-8 earthquake in the Sichuan area earlier this year, Dongfang Electric's wind power business maintained steady development throughout the year. The company has completed three wind power manufacture bases aimed at improving the localization rate in the manufacture of wind power equipment as well as revenues. The bases are in Deyang in southwestern China, Tianjin in northern China and Xiaoshan in eastern China. The bases cover a broad range of products, including double-feedback, direct-driven and semi-direct-driven series. The company has begun production of independently developed 1.5-MW wind turbines in Deyang and 2.5-MW wind turbines in Tianjin. Dongfang Electric expects to have manufactured 800 wind turbine sets by year's end, compared with just 208 in 2007, to become China's largest wind power equipment supplier.

The installed capacity of wind power across China is expected to reach 15 gigawatts in 2010. According to the National Development and Reform Commission, newly added wind power in the country will largely be made up of units with capacities of 1.5 MW, 2 MW or higher; therefore, enterprises capable of producing large wind turbines will become major competitors in the market.

So far, Dongfang Electric has more than $2.9 billion of wind turbine orders in hand with another about $1.45 billion set to be signed. The company expects to manufacture 1,200 sets of wind turbines in 2009.

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