trade council of denmark, beijing, cpower hina · wind turbine producers —— international 13-15...

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Jun

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CHINA WIND

POWER

NEWSLETTER

TRADE COUNCIL OF DENMARK, BEIJING, CHINA

Contents

Editor’s Words 1

Insight of the Month

Industry Development Overview

2

3-4

Wind Farm Investor

Wind Turbine Producers —— Local

5-6

7-12

Wind Turbine Producers —— International 13-15

China Corner: XEMC

DWEG China News

16-17

18

Editor’s word:

By ‘China Corner’ sector of the newsletters from March 2009, we have introduced all the important

provinces in China regarding wind development. I hope you have got a better picture through reading them.

From this edition, we will start to introduce Chinese turbine manufactures in ‘China Corner’ part. Everybody

already knows international players like Vestas, Siemens Wind and GE. And I believe you have heard enough

of Top 3 domestic ones as Sinovel, Goldwind and Dongfang. But we’d like to tell a bit more about some

promising companies though they are not market leader yet.

This time you will find detailed information of XEMC. It was ranked #7 in 2009 in Chinese market with a

market share of 4%.

Subscription:

The price for half a year’s reading is DKK 2,700. Please email Liang Wanliang ([email protected]) for subscription.

Members of DWEGC (Danish Wind Energy Group China) will receive the newsletters

of 2010 directly from Angela Zhang, since Danish Export Association has reached a

group subscription agreement with Danish embassy in Beijing.

A-PDF Merger DEMO : Purchase from www.A-PDF.com to remove the watermark

mailto:[email protected]

http://www.a-pdf.com

2

As everybody can see, installation of wind power and production of wind turbines have grown in a

rapid speed in China. China is not only the largest wind market but also the biggest production base all

around the world. But, it may not be seen by everybody that the lowering of wind turbine prices is

going to hurt the industry.

INSIGHT OF THE MONTH

Wind turbine is the major part of wind investment, which is about

70% of the construction cost for wind parks. ‘Recently in many

bids, the bidding prices from quite a few turbine manufactures are

lower than 5000 RMB per KW. I have been working in this industry

for many years but I still don’t know how they can make it and how

they do the calculation’, Said by Mr. He Dexing, the Chairman of

Chinese Wind Energy Association. ‘The lowering of production

costs should be in a rational range. Otherwise the market will

suffer. We’ve seen some collapse of newly installed wind mill. As a

manufacture, you can’t gain the market and yourself will be ruined

also, if you don’t invest in quality.’

The decreasing of wind turbine price has been the truth duri

ng past years. It was 6700 RMB per KW in early 2007, and

6300 RMB in 2008. When it came to end of 2009, it was as

low as 5000 RMB per KW. A lot of manufactures claim there

is still space to lower costs and prices.

Mr. He Dexing also mentioned, China is already large country

regarding wind turbine production. But there is a long way to go

from a big producer to a strong and leading producer. Quality

should be the key word on this way.

Challenges to Danish Sub

Suppliers:

Low Price of Chinese Turbines PRICE

3

First Offshore Concession Will Take Place in September

Price of Electricity Takes 60% Weight

The year of 2010 is year of offshore wind power for China. Following are some

news about the bidding of China’s first national concession program on offshore

wind development.

INDUSTRY DEVELOPMENT OVERVIEW

China’s first national concession program on offshore wind

development has attracted enough attention from months ago. It’s

said that the bidding documents have been issued from May 18.

The tenders have 4 months for preparation before the bidding

which is going to take place in September.

Official from NEA (National Energy

Administration) mentioned recently that the price

of final electricity will take only 60% weight of the

first offshore concession program. The other 40%

will be on the rationality of tender’s whole

solution on construction and operation. In this

way the situation of ‘project taken by the lowest

price’ will likely be avoided.

The officer also talked a bit about how the prices

will be considered. When the prices are collected

from all tenders, the highest one and the lowest

one will be taken off. They will calculate an

average price of the rest. The standard price will

be 10% lower than the standard price. The tender

will get higher marks if their bidding price is

closer to the standard price.

4

Electricity Price is Sensitive

Proper Functional Division to be Set

Tenders Should Deliver a Package Solution

The First Concession, The First Test

INDUSTRY DEVELOPMENT OVERVIEW

Price is no doubt the most important element for developers and

manufactures. The final electricity from offshore wind parks will be

more expensive than onshore ones since the construction costs are

much higher.

The only offshore reference case in China is Donghai Bridge project

in Shanghai. And the price of its electricity is 0.978 RMB per KWh.

The officer believes the first concession will come up with a lower

price than Donghai Bridge project due to competition between those

tenders.

The concession bidding this time is looking for ‘combined’ tenders,

which means the tender should be a union of wind farm developer,

turbine manufacture and offshore installation company. It will be

interesting to find out who will cooperate will whom at the bidding.

China has little experience regarding offshore wind

development. We can feel that the government wants to use

the first concession program as a test, to formalise a detailed

strategy and plan on China’s offshore wind market.

Especially, it will be a practical test on pricing structure and

subsidiary of offshore wind electricity.

5

WIND FARM INVESTOR

Longyuan keeps pace with China’s wind market

China Longyuan Power held Shareholders Annual

Meeting in Hong Kong on May 27th. Longyuan

introduced last year’s business conditions and

reported a net profit attributable to parent

company (China Guodian, one of ‘Big 5’ power

companies) of 894 million RMB, increasing by

165.3%.

For the year of 2009, Longyuan has

performed well and kept a rapid growth

of wind power installation and total

operating capacity. 41 new wind

projects have been constructed and

contributed a newly installed capacity of

2 GW. By the end of 2009, Longyuna’s

total installed capacity of wind power

reached 4.5 GW, remaining in the first

place in Asia and fifth worldwide.

Meanwhile, it added a new wind power

reserve capacity of 16 GW and reached

the total amount of 45 GW.

Longyuan generated 6.2 billion kWh wind electricity which is an increasing of

69.9% from the year before. The average availability of wind turbines was

97.69% and the average utilization time were 2268 hours.

6

On the Fifth Chinese Renewable Energy Sources

Investment and Financing Forum, Jia Nansong, the

Board Secretary of Longyuan stated, Longyuan

would attach great importance to offshore wind

power which was considered to be a new business

point of growth. Longyuan has attended China’s

first offshore concession and is preparing bid

proposal now.

After listed on Hong Kong stock market, Longyuan

is now well financed. It was disclosed that Longyuan

would still focus on domestic market but would try

to expand overseas market at meanwhile. It would

be more of direct investment instead of purchasing.

At present Longyuan has investment intents in USA,

East Europe and South Africa. Among them,

cooperative development agreements have already been signed and the preliminary

phase has been put in operation in South Africa.

In 2010 Longyuan would like to generate 10 billion kWh wind electricity which is 60%

more than the amount of 2009. Longyuan will also work hard for newly increasing

wind power installed capacity of 2 GW, and reaching the total amount of 6.5 GW at

the end of 2010.

WIND TURBINE PRODUCERS —— LOCAL

Longyuan’s Major Regional Wind Areas

7


Manufacturers: Time to Play

Gearbox from DHI·DCW Group Gets GL Certificate

May 24 to 26, the gearboxes made by DHI·DCW Group

have passed the on-site inspection by experts from GL

(Germanischer Lloyd) Wind Energy. This certification

indicates the R&D capacity of DHI·DCW Group on supply

chain especially gearbox has reached a new level. It also

forms a solid foundation for future development in

Chinese market and expanding to overseas market.

DHI·DCW Group is the mother company of Sinovel. Sinovel is now the largest turbine manufacture in

China’s wind market (Close to a quarter of market share in 2009). Within DHI·DCW Group different kind of

components can be supplied to Sinovel.

From 2008, DHI·DCW Group started to work on R&D of gearbox, yawing, pitch control, control system, hub

and foundation for 3 MW turbine. In February 2009, the first 3 MW wind turbine for offshore and onshore

was off lined in Sinovel. And now 34 sets turbines of this type have been installed in China’s first offshore

wind farm – Donghai Bridge project in Shanghai.

8


The global first 2.5/3.0 MW ultra compact wind turbine

came off the production line in Mingyang Electric

The 2.5/3.0 MW ultra compact wind turbine of

Mingyang Electric came off the production line

on May 29th in Zhongshan City, Guangdong

Province. It indicates a new height for turbine

production in China’s wind power industry. It’s

also meaningful for promoting the development

of China’s offshore wind power development.

Mingyang and German company Aerodyn have spent 3 years on research and

design of this new type of wind turbine especially according to the characters of

offshore development. It gathers the merits of international and domestic wind

turbines. The drive chain consists of main bearing, two stage planetary gears and

permanent magnet synchronous generator, with a lighter weight, a compacter

composition, a smaller volume and higher efficiency than traditional 1.5 MW

doubly fed generators (DFIG). The offline of this wind turbine indicates that the

full range of products from 1.5 MW to 3.0 MW of Mingyang has already been

formed.

Mingyang Electric is one of the five manufacturers who are engaged in new energy

equipments production including megawatt scale wind turbine systems. Last year

Mingyang realized a turnover amounted to RMB 5 billion. It delivered wind

turbines of 630 MW. So far it has manufactured wind turbines with an

accumulated amount of 1.2 GW. Mingyang persists in independent innovation and

has capability in design and developing MW scaled wind turbines.

9

Just at the rollout ceremony, Yangming Wind Power signed a series of agreements.


Strategic Cooperation Agreement with Huaneng

New Energy Holding Ltd.

Strategic Cooperation Agreement on Lease

Operation with ICBC Financial Lease Company

Framework Agreement for Joint Venture of

Offshore Wind Power Engineering Company with

China Zhongtie Major Bridge Engineering Group

General Contract on Dabancheng 50.75 MW Wind

Power Project with Xinjiang Huaran New Energy

Ltd.

Further Agreements for Strategic Cooperation

with ICBC Guangdong Branch concentrating on

domestic comprehensive and outbound financing

business

Framework Agreement on Guangdong Yangming

New Energy Industrial Park Investment with

management of Zhongshan Torch High-tech

Industrial Development Zone.

Including:

Basing on the agreement for joint

venture between Mingyang and China

Zhongtie, these two companies will be

combined as a tender for the first

offshore concession (more info see page

3-4) bidding. Mingyang is of course the

turbine manufacuture and Zhongtie will

be the installation company.

Special:

10


Goldwind Moves from Turbine Manufacturer to Solution Provider

At the same time of keeping high speed of stable growth, Goldwind

has successfully moved from a single wind turbine manufacturer to a

wind power whole scheme provider.

On an investor conference the president of Goldwind Wu gang stated

that Goldwind had bonded its advantages in market, technology and

capital to realize its vertical and horizontal integration. Goldwind

would become the discoverer and creator of value in wind industry.

Eight years ago, Wugang’s dream was to produce direct drive wind

turbines. At present, Goldwind has already put nearly 2000 sets of

1.5 MW permanent magnet direct drive turbines into operation.

They have been well regarded for stable running and high efficiency.

The prototypes of 2.5 MW permanent magnet direct-drive and 3.0

MW mixed-drive wind turbines developed by Goldwind itself have

started testing at Beijing Guanting wind farm and Dabancheng wind

farm.

From turbine manufacturer to solution provider

‘Now we are enjoying the value generated by direct drive’, Wu Gang stated with pride. Goldwind is the

only domestic company experiencing the general circulation of designs, manufacturing and

industrialization in China’s not long wind history, and also the only one with the ability to derive dozens

of sequences from one machine type.

Goldwind has also made great achievements on wind farm development. Goldwind’s wholly owned

subsidiary Beijing Tianrun New Energy Investment Co. has set up 14 wind companies in either sole

proprietorship or purchasing way. In this way it brings the competences of Goldwind and regional wind

resources in integration. It has been proved to be very successful, vice president of Goldwind Wang

Haibo said.

Meanwhile, the globalization strategy included product research internationalization, human resource

internationalization, and market internationalization has already been implemented, and made

significant progress.

Wu Gang said, these strategic works has been matured in 2009 and it is helping Goldwind to

accomplish its plan to be listed in Hong Kong stock market. Now what Goldwind would have to do is to

cultivate its core competences such as wind energy technology, manufacture, service and project

development, then provide systematic solutions to domestic and overseas customers.

11

What is more, Goldwind has established its

overseas development recently. After successfully

kicking off the listing plan in Hong Kong stock

market, it has signed a financing contract amounted

6 billion RMB with CDB (China Development Bank),

for the purpose of expanding international market.

The president of Goldwind Wu Gang led his team take participate in the USA Dallas

wind power convention and announce that American Goldwind, the wholly owned

subsidiary had founded.

Goldwind in USA was registered late in 2009 with office located in Chicago. The goal

is to provide total wind power solutions to North American market included sales,

service, manufacture, etc. It is an important component of Goldwind’s globalization

strategy.

Besides, the wholly subsidiary of Goldwind in Australia has recently established and

started to operate.


Overseas Establishments

12

The blade length of this 3.6 MW wind turbine

reaches 56 meters. Its rotor diameter reaches

116 meters and the hub height will be 90 meters.

It’s claimed to have advanced anticorrosion

system and excellent aerodynamic performance,

also easy for installation and maintenance.


3.6 MW wind turbine introduced by SE Wind

Shanghai Electric Wind Power

(SE Wind) has declared that China’s

most advanced offshore wind

turbine with a capacity of 3.6 MW

will come off the production line in

June and be installed at SE wind’s

test plant by the Donghai Bridge. It

is an important chip for SE Wind to

lead the Chinese offshore wind

market. Donghai Bridge

To face the fierce competition in Chinese market, SE Wind has enhanced its production

capacity. The construction of manufacturing base in Lingang, Shanghai has been

finished. This base covers more than 40,000 m2, with a production capacity of 1500

sets and also a testing system for wind turbines. The second base located in Jiangsu

province will be completed in the coming August as well. Shanghai Electric expects its

sales for the next year to reach 8 billion yuan, and further more than 10 billion in 2012.

13

The global wind energy leader Vestas has recently started its second phase wind turbine

production project located in Hohhot, capital of Inner Mongolia, China.

The president of Vestas China, Jens Tommerup said, the second phase of this factory could

produce products which can apply for different wind conditions and involved all parts of

business such as research and development, production, sales, transportation and after

service.

After the completion of the second phase, this manufacturing base would become the

technology leader for similar products in the industry, which indicates that the capacity of

Vestas in Inner Mongolia will serve both of the internal market of China and the international

wind power market.

The construction of Vestas’ manufacturing base located in Hohhot was started from 2008

July. The first phase has started operation from 2009 April, was having now an annual

production capacity of 800 sets of 850 KW turbines.

WIND TURBINE PRODUCERS —— INTERNATIONAL

Vestas Starts its Second Phase

Wind Turbine Production Project

in Inner Mongolia, China

This Vestas project is located in Hohhot Jinshan

Development Zone, and covers a vast area of 333,000

m2, with a construction scale of production capacity of

800 sets of 850 KW wind turbines each year. Its total

investment is 90 million US dollars, of which

investment on fixed assets is 77 million and working

capital is 13 million dollars. All of capital comes from

Vestas itself.

14

GE Wind Power published a set of data which indicates that its first quarter energy

business revenue is 7.2 billion dollars, falling 7 percent compared with the same

period last year. Revenue from wind power has declined the most, showing a number

of 20 percent.

Data published by AWEA indicates, in the first quarter of 2010 America merely added

539 MW of wind power installed capacity, falling 82.5%. It is the lowest quarterly

number among the last three years. However, USA mainland is just the most

important market for GE Wind Power.

China National

Investment &

Consulting Co.


The First Quarter Data Shows

A Big Slump of GE Wind Power

The Chief Researcher for CIC consultants in Energy Industry stated,

the reason for the big slump of GE Wind Powers revenue is the

downturn appearing on USA wind energy market.

The newest Investment Analysis and Prospect Forecast of Chinas

Wind Power Industry for the years from 2010 to 2015 by CIC

consultants indicates, the downturn of USA wind power market

not only affects GE’s performance. The total revenue for the first

quarter of Industry giant Danish Vestas is only 75.5 million euro,

also falling by 32 percent in comparison with the number of

110.5 million for the same quarter of 2009.

15

However, the downslide of GE Wind Powers performance is perhaps just temporary. GE has

recently strived to develop on a global scale to reduce dependence on USA market and

operational risks.


GE’s New Development

Opputunities in Europe & Asia

On March 25th, 2010 it’s announced to invest

340 million euro to expand the development

of production, design, engineering and service

facility of wind turbines in four countries in

European (Britain, Norway, Sweden and

Germany). European Union expects wind

energy to supply more than one fifth of

Europes power needs by 2020. Merely in the

offshore wind power field, EU plans to raise

the total installed capacity from the existing

1.5 GW to 150 GW of the year 2030. It is a

great opportunity for GE to develop its wind

power business.

Besides, GE Wind Power is developing

faster and faster in Asia. GE declared at the

end of 2009, it would recover the Indian

business and construct 300 sets of 1.5 MW

wind turbines in South Indian. The reason

was Indian government had improved its

incentives. Also in September, 2009, GE

Wind Power indicated that its sub-divisions

were seeking for opportunities for joint

venture, for the purpose to expanding its

business scale of wind power in China.

16

China Corner

Xiangtan Electric Manufacturing Corporation Ltd.

Hunan Province

Hunan Province

Xiangtan City

Xiangtan Electric Manufacturing

Corporation Ltd. (XEMC) is a long

established mechatronics (mechanical

and electronic) company. It has

advantages in synthesis techniques and

product support ability, and leads in

development and manufacturing in the

same industry of China. Its principal

activities include the production of

wind turbine and related components,

AC motors, DC motors, mass transit

vehicles, water pump, etc.

17

XEMC sold 244 sets of wind turbines in 2009 and the number is expected to be 500 sets in 2010

and increase to 750 in 2011. Now the sales contact for 2010 has been basically determined.

XEMC can expect a 100% growth rate on total revenue this year.

China Corner

For China 2010 is the kick-off year for offshore wind. Xiangtan

Electric shows strong competence in this aspect after

purchasing Dutch company Darwind.

The wind business of XEMC could be divided into two parts,

one is manufacturing of wind turbines, and the other is the

development and production of key components including

generator, converter and main bearing. Besides 2MW

permanent magnet direct-drive wind turbine which has

already been put into mass production, the prototype of

2.5MW turbine with independent intellectual property has

come off the production line and the most design tasks of

3.6MW and 5MW turbines have been finished and are striven

for launching in 2010.

XEMC is producing the key components by itself, which can

help to reduce costs. For example, the R&D of converters for 2

MW direct-drive turbines has come to an end and will enter

mass production phase soon.

Another example, XEMC and bearing company Timken’s joint

venture Timken XEMC bearing Ltd. has entered into pilot

production phase. The company was designed to have an

annual capacity of 300 sets main shaft bearings for 2 MW

direct drive wind turbines.

18

Wind power is a key industry that Trade Council of Denmark in China is looking

at. We have built up network with wind companies, associations and also

relevant government agencies.

During preparation of this edition, we not only selected news from Chinese

media and translated them into English, but also talked to people in our

network to get latest and most reliable information. In upcoming editions, we’d

also like to have articles like interviews, introduction and comparison of

different locations and industrial parks in China, deep insight of major players in

Chinese wind market.

We are looking forward to hearing your comments and suggestions. Our goal is

making this China wind power newsletter a valuable handbook for all Danish

wind companies.

- Liang Wanliang

- Xing Xiaoxing

- Henrik Martens

Editor’s Contact:

LIANG WANLIANG / [email protected]

Commercial Officer, Trade Council of

Denmark, Beijing, China

Tel: +86 10 8532 9983

Fax: +86 10 8532 9999

HENRIK MARTENS / [email protected]

Commercial Counsellor, Trade Council of

Denmark, Beijing, China

Tel: +86 10 8532 9981

Fax: +86 10 8532 9999

DANISH EMBASSY

1 DONG WU JIE, SAN LI TUN / BEIJING

100600 / P.R. CHINA

PHONE +86 10 8532 9900 /

WWW.AMBBEIJING.UM.DK



Danish Wind Energy Group China


Danish Wind Energy Group China (DWEG China) was established on the 1st September, 2009 to service the Danish Wind Industry in

China and currently consists of 49 member companies. All companies are highly specialized Danish Wind Turbine sub suppliers, and are

very active on the Chinese market.

The network serves as a local forum where members meet and discuss common challenges and set up new initiatives in the market. As a

member you get access to a network of experience, knowledge and connections.

____________________________________________________________________________________________________________________________________________________________

DWEG China VIP Event in Expo 2010

DWEG China hosted VIP RECEPTION in the

Meeting and Business Event Area in the

Danish Pavilion at the EXPO2010 on May 31

successfully. Almost 70 participants including

12 member companies e.g. IFU, Hempel, LHG

Group, DAFA, Zero-max, Blue Water, Lund &

Sorensen, AVN Energy, CC Jensen, Electricon,

Svendborg Brakes, NIP, as well as VIP guests

from SIEMENS Wind Power, Vestas, Sinovel,

SEWIND, and etc.

Mr. Michael Norgreen, Director of Engineering

Asia Pacific, and Mr. Gregory Glen, Sales

Manager China, Offshore, SIEMENS Wind

Power, delivered a very interesting speech

about the Offshore Wind Power. Ms. Anette

Eberhard introduced how the Danish State

Export Credit (EKF) can help the Chinese and Danish Wind Energy Company. Mr. Morten Sondergaard, Senior International Technical

Advisor of WED presented how to benefit from the results of the Danish Chinese Wind Energy Program. Finally, Mr. Christopher Bo

Bramsen, Commissioner General of Denmark made a fantastic introduction about the story behind Pavilion and the little Mermaid.

After enjoying the good atmosphere at the dinner time, all the Chinese VIP guests have been given a newly published book – The Little

Mermaid written by Mr. Christopher Bo Bramsen. The participants also visited Danish Pavilion, French Pavilion, Belgium Pavilion and

Italian Pavilion together.


Offshore Wind China 2010, Shanghai, June 7- 9, 2010

A Danish Pavilion will be organized for DWEGC members in Offshore Wind

China 2010. As the door opener, DWEG China will promote Danish Offshore

Wind Technology by joining this exhibition as a National Pavilion. 11

companies, including Resolux, Baltship, K2 Management, Liftra, Densit(ITW),

Niebuhr Gears, AVN Energy, Mita-Teknik, Hempel, COWI and Svendborg

Brakes joined the national pavilion. Meanwhile, AVN Energy, HEMPEL, COWI

and Mita-teknik will also deliver presentations and attend the panel

discussion during the conference held in Sheraton Hotel.

Member Company who will be in the Danish Pavilion:

Company Keyword Company Keyword

AVN Energy Hydraulic and cooling system Liftra Lifting and transport equipment

Baltship Project shipping Mita-Teknik Control systems

COWI Design, operation, maintenance Niebuhr Gears Gears

Hempel Coating Resolux Standard light fixtures

ITW polymers and fluids products Svendberg Brakes Hydraulic brake systems

K2Management Consultancy business

Wind Power Asia, Beijing, June 23 - 25, 2010

The Danish Wind Energy Group and its members are going to Wind Power Asia, June 23 - 25, 2010. 10 member companies will join the

national pavilion, including AVN Energy, Blue Water Shipping, Electricon, Eltronic, Fritz Schur Energy, Hydra-Grene, Lund&Soerensen,

NIBE Wind Components, OLAER DK, Avendborg Brakes.

More information about DWEG China’s activities, please visit www.dk-windchina.com

____________________________________________________________________________________________________________________________________________________________

DWEG China Members


Address: Rm1703, 1277 Beijing Xi Rd, Shanghai

Contact person: Angela Zhang

E-mail: [email protected]

Website: www.dk-windchina.com

http://www.dk-windchina.com/


http://www.dk-windchina.com/

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