China’s Wind Engineers Argue Merits of Going Big or Scaling Back
(Bloomberg) -- Renewable power is plentiful and cheap in China, a boon for consumers but a strain on firms that manufacture the equipment. Leading wind turbine makers are meeting the challenge with radically different solutions.
Pricing reforms this year are putting electricity from Chinese renewables at a steep discount to coal, the country’s mainstay fuel. It means stable returns on wind and solar are no longer guaranteed. The imperative is to reduce costs, and scaling up or scaling down seems to be the choice for turbine engineers seeking to deliver the most competitive power.
Ming Yang Smart Energy Group is all in on the first option. At this week’s annual China Wind Power conference in Beijing, the company unveiled plans for a twin-headed, offshore behemoth capable of delivering 50 megawatts, nearly double the size of the largest design currently available. The pitch: a per-kilowatt cost that’s much cheaper than Chinese rivals and perhaps just a fifth of similar turbines deployed in Europe.
“It’s obvious that electricity prices have dropped because of the new policy,” Chairman Zhang Chuanwei told reporters. “And the return on investment does not meet the standard.”
For Goldwind Science and Technology Co., smaller is better. At the same event, China’s top wind company launched products with capacities of between 10.5 and 14 megawatts, much less than its current offerings.
It’s a strategic shift for the firm, which until recently was focused on delivering ever-larger turbines to ward off ferocious domestic competition. Now, Goldwind is touting the longer service life and cheaper installation costs of its new models, as well as a smarter assessment of when power is most needed.
“Many projects can’t be approved because of power prices,” said President Cao Zhigang. “Therefore, we need to realize the value of electricity.”
Goldwind’s new products won’t generate as much power as other models when the wind’s up and turbines are flooding the grid. But they can produce more at lower wind speeds, when fewer turbines are operating and prices are likely to be higher.
Both approaches have merit. On land dotted with turbines, Goldwind’s nimbler models would have an advantage. But Ming Yang’s monster is a floating turbine that can be towed out as far as subsea cables will allow. On the less crowded ocean, its extra punch could be more decisively brought to bear.
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This Week’s Diary
(All times Beijing)
Thursday, Oct. 23:
- China’s Communist Party holds Fourth Plenum, day 4
- CSIA’s weekly solar wafer price assessment
- China Petroleum & Chemical International Conference in Ningbo, day 2
- EARNINGS: EVE Energy
Friday, Oct. 24:
- China’s weekly iron ore port stockpiles
- SHFE’s weekly commodities inventory, ~15:30
- China Petroleum & Chemical International Conference in Ningbo, day 3
- EARNINGS: Shenhua, Gotion, Goldwind, Tongwei, CMOC, Shandong Steel
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