80 BILLION YUAN CAKE

China is determined to build up its offshore sector, as the best onshore sites have already been taken.

Compared with Europe, China has just broken the ice for offshore wind power. China' s offshore capacity remains a tiny proportion of its total installed wind-power capacity. And yet China has rich offshore wind power resources.

According to the China Meteorological Administration, China has up to 750 GW exploitable wind resources in the sea, three times that of onshore wind resources.

These offshore wind resources are based at the eastern and southern coasts, large economic centers with growing demands for power and a diminishing supply of fossil-energy resources.

In 2010, China awarded four contracts, through a bidding process, to power companies to construct 1 GW offshore and inter-tidal concession projects. They are scheduled to be completed in four years.

Eligible companies were restricted to domestic wind-farm developers or joint ventures that are more than 50 percent Chinese-owned. Sinovel, Goldwind and Shanghai Electric, leading Chinese turbine makers, supply the turbines.

Industry officials say China might issue a second request for tenders for offshore concession projects in the first half of 2012. The projects, totaling up to 2GW, will be located across the provinces of Jiangsu, Hebei, Shandong, Zhejiang and Guangdong.

China is planning a major offshore development push. According to the National Energy Bureau (NEB), China will construct 5GW of offshore wind projects by 2015, five percent of its total wind installed capacity, while developing full technology and setting up a complete industrial supply chain.

By 2015, China will enter into scaled development of offshore wind power and its technology, and by 2020, China will construct 30 GW offshore projects, becoming the largest country for offshore-wind power development.

Industry officials believe the 5GW installation capacity in the next five years will create 80 billion yuan in market opportunities.

Tao Gang, senior vice-president of Sinovel, said China needs around 6,000 offshore turbines with a 5MW capacity to meet the 30GW target for 2020.

China' s leading wind turbine makers are vying for a slice of that market. In May 2011, Sinovel rolled out a 6MW prototype, and in October installed the 6MW offshore turbine in Sheyang county, Jiangsu province.

Other leading Chinese wind turbine makers, including Guodian United Power, Shanghai Electric, Goldwind, and Chongqing Haizhuang, are also developing 5MW or 6MW turbines.

Last September, Shanghai Electric won a 100MW deal to supply 3.6MW offshore turbines for the second stage of China's Shanghai East Sea Bridge project.

Zheng Fangneng, energy section chief under the Ministry of Science and Technology, said that over the next five years, China will support development of big-capacity wind turbines, key components, and industrialization technology. Priority will be given to 3MW to 5MW turbines and 6MW to 10MW experimental offshore turbines.

Foreign turbine makers are also eyeing this lucrative market. In 2010, GE set up a joint venture with Harbin Electric Machinery Company to develop wind turbines for the Chinese market.

In February 2011, Shanghai Electric and Siemens signed a joint venture to supply Siemens blades to the Chinese market. In June, Longyuan handed Siemens its first ever offshore turbine order in China, 21 units of SWT-2.3MW turbines, for the Rudong inter-tidal project.

Siemens Wind Power CEO Jens-Peter Saul said: "We see good opportunities for offshore wind power in China with its shallow water near the consumption centers on the coast. This order is an important step in entering the rapidly growing Chinese wind power market."

In December, Shanghai Electric and Siemens announced plans to expand their existing collaboration and set up two new joint ventures.

In September, Gamesa' s new chief executive for China Jose Antonio Miranda said he hoped to introduce the company' s upcoming offshore wind turbine, G11X 5MW, to China within the next two years.

Gamesa opened its sixth manufacturing plant in Tianjin city in November as part of its aim to expand market share in the country. The assembly plant takes Gamesa's capacity in China to 1GW.

In the same month, Scottish First Minister Alex Salmond said he was looking to increase the level of cooperation between Scotland and China on the development of offshore wind energy.

Hyundai Heavy Industries, the global shipbuilding giant, said in September it expected to generate sales of $300 million a year by 2015 from a new wind turbine factory in China.

"China is a market you can't ignore," said Kim Kwean Tae, head of low-carbon business at Hyundai.