“For the Chinese wind industry as a whole, 2012 appears to be another year combining elements of the best of times and the worst of times,” reports a new quarterly assessment from GTM Research and Azure International.
Though 3Q financials from China’s biggest turbine manufacturers like Sinovel, Goldwind, and Mingyang (NYSE:MY) confirm a sharp fall in revenues, the Chinese wind industry installed 2.9 gigawatts of grid-connected and non-grid-connected capacity, bringing China to a cumulative 71 gigawatts at the end of the quarter. It is on track to pass the 50-gigawatt cumulative grid-connected capacity mark in 2012 and reach its highest annual installation number, approaching eighteen gigawatts for the year.
According to the GTM Research-Azure International report, China's wind industry is on track for a cumulative 80 gigawatts by the end of 2012 and 150 gigawatts of installed capacity by the end of 2015. That would dramatically exceed the 100-gigawatt 2015 target set by China’s 12th Five-Year Plan in 2011.
China wind, however, faces “immense challenges,” according to the report, “from ongoing problems with grid connection, ever-growing amounts of curtailed wind generation, new restrictions from State Grid on who can connect, and, perhaps most importantly, uncertainty about whether policymakers will do as they have done in the past to ensure the sector continues its rapid growth.”
The 3Q 2012 numbers show that “more rational allocation of capital toward projects with the largest potential to supply needed energy at low cost is still some ways off: curtailment is still a huge problem, and industry profits are in a nosedive," according to the report.
“China’s wind industry retains its leadership position worldwide, whether looking at policy targets, overall installation numbers or innovation,” said Anders Hove, one of the report’s authors. “Fully understanding the world’s largest wind energy market requires an in-depth understanding of complex issues, and that’s why this report is timely. We need to understand the reasons for interconnection delays, develop an expectation for future curtailment, and look province by province at the cash flow issues created by slow disbursement of renewable energy surcharge funds.”
“China represents the world’s largest and in many ways most important wind power market today,” said Scott Clavenna, CEO of Greentech Media. “By launching a new quarterly report series with Azure International, GTM is aligning with a respected consultancy in the Chinese cleantech market, with a particular focus on wind power.”
The 70-page report includes analyses of wind capacity by manufacturer, wind capacity by developer, wind capacity by geography, curtailed wind power in China by geography, China’s wind policies, and major wind company financial trends.