Wind Curtailment in China Tempers Growth, Masks Imminent Rebound

All eyes are on China, as the world’s leading wind power market faces wind curtailment, offshore project delays and a tough financing environment. While these challenges are expected to cause a 9% reduction in new installed capacity in 2012 (16GW), MAKE expects these factors to reverse and drive installed MW growth of 19% in 2013 (19GW).

As China focuses on closing the gap between installed and grid-connected MWs, MAKE expects grid-connected capacity to rise from 17.5GW to 22GW by 2016e.

2012 will prove to be a bittersweet year for the Chinese wind industry; on one hand, the nation surpassed the U.S. and became the world’s largest wind market in June by installed MWs, while on the other hand tough market conditions have prompted a 1.6GW decrease in new installed capacity. 2012 will also prove to be a transitional year for the Chinese wind industry as the government plans to increase project developments in heavy load centres and also expand wind transmission from wind bases to such heavy load centres, in an effort to balance wind resources and power consumption. New developments will be located in fast growing central regions of China that have denser populations, better grid infrastructure and higher power demand as compared to many of the existing wind bases.

The shift to these new wind regions with Class III wind resources and different geographies necessitate new types of wind power plants that are designed for low wind speeds, high altitudes, low temperatures, and resistance to typhoon conditions. While adapting to new wind segments will pose a technical challenge for developers, OEMs and suppliers, it will also bring forth opportunities for new wind markets. Nevertheless, MAKE finds the manufacturing industry still challenged, with capacity across the supply chain on average 2.5 times expected 2012 demand. There are signs of consolidation and closures, but these remain insufficient to close the overcapacity gap at present.

With the Chinese market maturing, Chinese companies are also rapidly expanding their overseas presence with State Grid and Chinese IPPs looking to internationalize. MAKE expects these efforts to support turbine exports, making 2012 a record-setting year. MAKE expects that the Chinese share of the international turbine market will be around 4%.

China Power Market 2012 is a 120-page in-depth Business Study providing the reader with MAKE’s expert analysis of the Chinese wind market, regulatory environment, asset ownership and supply chain. The report also contains a market forecast for 2012-2016, key strategies of the leading IPPs, OEMs and suppliers and analysis of the top 10 provinces in wind. Detailed research outlines changing trends in operations and maintenance, transmission, wind turbine technology, turbine cost and price analysis and market shares of turbine vendors and their customers.

[mappress]

Press release, November 08, 2012