Energy

Wind turbine makers see fresh breeze abroad

By Wang Ying (China Daily)
Updated: 2011-05-27 11:06

SHANGHAI - While China's wind turbine makers are in a cut-throat price war in the domestic market and one-third of wind turbines stand idle, there's a silver lining: the demand for wind power equipment in developing economies, analysts said on Thursday.

"Chinese wind turbine manufacturers have limited means to make a profit as the price has hit the bottom. But when you look beyond China, you will find there is great potential in some developing countries," said Patrick Dai, China electrical equipment analyst with UBS Securities.

"Currently, China has more than 5 million kilowatts of wind turbine overcapacity, making the price war inevitable," Dai said.

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In the first five months of this year, wind turbine makers have found it hard to make any profit with prices at about $1 million a megawatt, according to Dai. However, the price in the global market is between $2 million and $2.5 million a megawatt.

Capital is still flowing constantly into the local wind turbine market to gain domestic market share, analysts said.

China exported between 15 and 17 percent of wind turbines annually, and the figure is growing steadily. The overcapacity will be digested easier in global market in the future, Dai said.

"In the next few years, Chinese manufacturers will play an important role as wind turbine exporters with a highly competitive price," said Stephen Oldfield, managing director in UBS Asian investment research, head of the Asian utility research and co-head of global utilities research with UBS AG.

Oldfield said he expected wind turbine demand would see 8 percent global growth annually.

"Our main target is India. Of course, the choices are becoming more and more diversified, such as Brazil, Russia, North Africa, the Middle East, and etc," Dai said. India's power shortage stays above 12 percent every year, and Brazil is going to be more reliant on wind power in coming years.

"While developing economies are making efforts to meet the power shortage, we should grab the opportunities," Dai added.