Executive Summary

Current Development Status and Outlook of the Chinese Wind Power Industry

In 2011, the annual newly installed wind power capacity in China (excluding Hong Kong, Macao and Taiwan) was 17.63GW, with the Chinese wind power market beginning to enter a steady development stage after having undergone many years of rapid growth. The cumulative installed capacity nationwide was 62.36GW, allowing China to continue to maintain its leading position in the world in terms of installed wind power capacity. By the end of 2011, 30 Chinese provinces, cities and autonomous regions (excluding Hong Kong, Macao and Taiwan) had their own wind farms. More than 10 provinces had a cumulative installed wind power capacity of over 1GW, including 9 provinces with a capacity over 2GW each. The Inner Mongolia Autonomous Region remained the leader of China's wind power development, having a cumulative installed capacity of 17.59GW, followed by Hebei, Gansu and Liaoning, each having a cumulative installed capacity of over 5GW.

China's offshore wind power construction advanced successfully, with the offshore wind power planning process of Shanghai, Jiangsu, Shandong, Hebei, Zhejiang and Guangdong already completed. The offshore wind power planning process of Dalian in Liaoning Province, as well as Fujian, Guangxi and Hainan provinces were improved and further developed. The completed programs have preliminarily identified an offshore wind energy resources development potential of 43GW. Currently, there are already 38 projects, totaling 16.5GW that are undergoing early stage development. By the end of 2011, a total of 242.5MW installed capacity of offshore wind power had been completed nationwide.

In 2011, the newly added grid-connected wind power was nearly 17GW, which was basically equivalent to the installed capacity during the whole year, while the difficulty with getting grid connections had been essentially mitigated. According to China Electricity Council, the nationwide grid-connected wind power capacity reached 47.84GW. Even though the speed of getting wind power projects connected to the increased, problems remain.

Moreover, as the power grid enterprises raised their technical specifications and requirements for wind power equipment, wind power grid-connection began to transform from a "physical grid-connection difficulty" to a "technical one". Meanwhile, curtailment became a new challenge for wind power development. In 2011, more than 10 billion kWh of wind power was not generated because the grid had no capacity to absorb it.

Large-scale central government administered enterprises and local state-owned enterprises were still the major players in China's wind farm development, with close to 90% of all wind power projects invested in, constructed and completed by these corporations. By the end of 2011, a total of some 700 state-owned enterprises nationwide had participated in wind power investment and construction, which offered a cumulative grid-connected capacity of 37.98GW, accounting for 79.4% of the whole country's total grid-connected capacity. China's five major power generation groups provided a cumulative grid-connected capacity of 27.1GW, which accounted for 57% of the national grid-connected capacity. China Guodian Corporation was ranked at the No.1 position in terms of domestic wind power grid-connected capacities by offering a cumulative grid-connected capacity of 9.81 GW. China Huaneng Group and Datang Group were ranked at the second and third positions, respectively. Other individual investment enterprises basically maintained a steady development status. Since the beginning of the "Twelfth Five-Year Plan" period (2011-2015), the National Energy Administration has initiated the development concept of focusing on both centralized and decentralized development, as well as corresponding administrative measures. Some inland regions began to plan their wind power development projects according to local conditions, bringing opportunities to mid- and small-sized wind power investment enterprises.

In 2011, the Top Five manufacturers in China's newly installed wind power market were Goldwind Science & Technology, Sinovel, United Power, Mingyang and Dongfang Turbine, res pectively. Guodian United Power Technology Company Limited installed 2847MW in 2011 -- a growth of 73% over the previous year -- making it the business to watch during 2012. The top five enterprises in China's cumulative installed wind power market were Sinovel, Goldwind, Dongfang Turbine, United Power and Vestas, respectively. Both Goldwind's and Sinovel's installed capacities decreased relative to that of last year, but they still maintained their first and second positions in the Chinese market. Among all the newly installed wind turbine generator systems across China in 2011, the average rating was 1.545MW, which showed a continuous growth compared to 2010, while the manufacturing industry was actively researching and developing multi-MW wind turbine generator systems for offshore wind power. According to incomplete statistics, as of 2011, China had about 20 complete machine enterprises that had announced plans for R&D of multi-MW high-power wind turbine generator systems, whose power ranges were mostly 3MW-6MW.

In 2012, China's wind power market development is set to continue its growth trend of 2011. The newly added installed capacity will be in the range of 15-18GW and is expected to reach approximately 18GW. By 2015, the installed wind power capacity will reach 100GW. The percentage of decentralized wind power will further increase, but large-scale development and land-based wind power development will still be the focus, while the ratio of decentralized wind power has the potential to reach a maximum of 30%. As power grid corporations continue to improve their ultra-high voltage (UHV) power transmission lines, intelligent power grids and other infrastructure, the power grids' ability to absorb wind power electricity on a large-scale, and the scale of cross-region wind power transmission will increase, with the wind power grid-connection rate also significantly increase. The wind power manufacturing industry has entered a low-profit era; competition will intensify, the market will become more mature, and wind power manufacturers will face greater market challenges. However, the wind power industry's maturity and lowering costs have enhanced wind power's competitiveness compared to traditional energy sources. Wind power has become a high-strength emerging power supply technology and its contribution to China's electricity mix will gradually increase.

According to the "Renewable Energy Twelfth Five-Year Plan" of the National Energy Bureau, it is expected that by 2015 China will have built 5GW offshore wind power and will have developed an offshore wind power supply chain. After 2015, China's offshore wind power will enter a large-scale development, and the target is for 30GW offshore by 2020. However, it will be very difficult to achieve this goal, and it will be difficult for offshore wind power to achieve such a significant breakthrough in so short a time.

Wind power is the new energy source that features the most mature technology, the best conditions for large-scale development and the brightest commercial future. The important role of wind power as China's strategic emerging industry will not change. The successive promulgation of a series of relevant industry adjustment policies will inevitably force the prioritization and integration of this industry. The future development space of China's wind power industry will be extensive.

wind power manufacturers will face greater market challenges. However, the wind power industry's maturity and lowering costs have enhanced wind power's competitiveness compared to traditional energy sources. Wind power has become a high-strength emerging power supply technology and its contribution to China's electricity mix will gradually increase.

According to the "Renewable Energy Twelfth Five-Year Plan" of the National Energy Bureau, it is expected that by 2015 China will have built 5GW offshore wind power and will have developed an offshore wind power supply chain. After 2015, China's offshore wind power will enter a large-scale development, and the target is for 30GW offshore by 2020. However, it will be very difficult to achieve this goal, and it will be difficult for offshore wind power to achieve such a significant breakthrough in so short a time.

Wind power is the new energy source that features the most mature technology, the best conditions for large-scale development and the brightest commercial future. The important role of wind power as China's strategic emerging industry will not change. The successive promulgation of a series of relevant industry adjustment policies will inevitably force the prioritization and integration of this industry. The future development space of China's wind power industry will be extensive.