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Power base generates winds of change

By Li Jing (China Daily)
Updated: 2008-08-18 13:49

Standing on the vast Gobi desert at Jiuquan, Gansu province are about 400 giant wind turbines. Together they compose a spectacular matrix that attracts lots of tourists, making a new hot spot along the ancient Silk Road.

The matrix is still being expanded at this natural "wind reservoir" in the country's far west.

By 2015, Jiuquan will become the first wind power base in China with 28 wind farms and a combined installed capacity of 12 gW. In the long run, the base will be expanded to having a capacity of 35.65 gW, according to Wang Jianxin, director of the development and reform commission of Jiuquan.

"We hope to accomplish a Three Gorges Project on land," Wang was quoted as saying by Xinhua News Agency when the National Development and Reform Commission (NDRC), the country's top economic regulator, approved the construction plan in May.

Tucked between Qilian and Helan mountains, Jiuquan was once a crucial military outpost on the Silk Road in ancient times. For hundreds of years, the harsh environment of the strong winds and the vast expanse of the Gobi desert challenged travelers. But in the recent years, they have become resources for a burgeoning green energy industry.

According to the latest assessment by meteorological departments, the wind energy reserve in Jiuquan is placed at 150 gW, of which 40 gW is exploitable for an area covering nearly 10,000 sq km.

The dry climate and the flat topography provide an ideal environment for developing wind power industry.

Jiuquan started to tap wind resources in 1996. But it was not until the recent several years, when China began to encourage investment in the sustainable energy sector, that Jiuquan saw a real boom of the wind power industry.

By the end of 2007, five large-scale wind farms were constructed in the area, and the capacity of installed wind turbines reached 410 mW in Jiuquan, accounting for 6.8 percent of the country's total. Now, about 800 million kWh of wind power electricity is generated annually.

The wind power base plan is about to stir a new round of investment, as the budget for the massive development is estimated at 120 billion yuan ($17.47 billion), says Liu Shengping, deputy director of the energy affairs office of the development and reform commission of Jiuquan.

Last month, organized by the NDRC, the first phase of the 12-gW Jiuquan wind power base finished bids for the equipment provision with a total capacity of 3.8 gW, according to the National Energy Administration, with most bid winners being domestic manufacturers.

Sinovel Wind Co and Xinjiang Goldwind, China's two largest wind turbine manufacturers, are among the winning manufacturers with wind turbine orders of 1.79 gW and 0.81 gW respectively.

Dongfang Steam Turbine Co, a subsidiary of Dongfang Electric Corp, received a 7.3-billion-yuan order of 1.15 gW wind turbines, the largest of its kind the company has won. The successful bid is of great importance to the Hanwang based company, which lost at least 1.6 billion yuan in the earthquake that jolted Sichuan province in May.

Experts say that the bidding for wind turbine manufacturers has boosted the rapid development of the wind power industry, as it improves the manufacturing abilities of wind turbines in China.

"When Jiuquan first started to build large scale wind farms, the insufficient supply of wind turbines was a big headache," says Wang, from development and reform commission of Jiuquan.

As recently as late 2007, China's wind power equipment providers were incapable of producing megawatt-class wind turbines, but now leading manufacturers, such as Sinovel, Xinjiang Goldwind and Dongfang Steam Turbine, are able to manufacture wind turbines with a capacity of 1.5 mW.

Statistics indicate the China's turbine industry has accounted for 56 percent of the newly installed wind turbines in 2007. This is vastly different from the situation a year before, when foreign manufacturers dominated the market.

According to a UNEP report published recently, investment in the country's sustainable energy sector grew by 91 percent last year to a record high of $10.8 billion, most of which has flowed to wind power generating units.

With this large investment, China's combined installed capacity of wind power facilities reached 6,050 mW at the end of 2007, increasing from 2,670 mW a year earlier.

The government has also created favorable policies to help spur the development of domestic wind power equipment and components manufacturing industry.

Under government regulations, all new wind power projects must be made up of at least 70 percent Chinese components. Wind power equipment manufacturers now enjoy a 50 percent discount on value added taxes (VAT) payable in China.

The country has also canceled its tariff-free policy on imports of wind turbines with a capacity less than 2.5 mW in April 2008, which will give added impetus to the domestic production of increasingly large wind turbines.

However, some of the core components in producing wind turbines, such as bearings, still depend on imports.

Xinjiang Goldwind has announced that the localization rate of the wind turbines it will provide to the Jiuquan wind power base will reach 90.5 percent. But other followers in the market fell short of this level.

The dependence on the imports of crucial technologies and components makes wind power equipment expensive, a factor that is hindering further development of the industry in China.

Many of the largest wind turbine manufacturers have licensed technology from western companies, such AMSC Windtec, REpower, Aerodyn, Vensys and Garrad Hassan.

China currently ranks fifth in the world in terms of wind power installed capacity. The country plans to increase its wind power capacity of 10,000 mW by 2015, and to 30,000 mW by 2020.