Wind power industry facing big challenges

China Daily, January 20, 2011

The greatest challenge for ambitious industry players who hope to spread their wings overseas may be quality.

Reports about equipment reliability issues broke out when Sinovel, China's largest wind turbine maker, was preparing for its listing, raising public concerns over the manufacturer's quality control.

Because of quality issues at Sinovel, China Longyuan, Asia's largest wind farm operator, reduced orders from the manufacturer.

China's wind power development will not be sustainable if equipment reliability and quality remain a concern, said Xie Changjun, general manager of Longyuan.

"The exceptional growth of China's wind power industry has sown seeds for potential risks, especially in terms of quality," said Li Yuheng, an industry analyst at China Investment Consulting, adding that the industry lacks certification and testing procedures.

The industry may see an eruption of wind turbine quality problems as time progresses and currently the operation time of Chinese turbines are not long enough to test the quality, according to a research note by China Investment Consulting.

Meanwhile, like other Chinese-made products, a price war seems to be going on in the domestic wind power market. One noticeable fact is that Chinese-made turbines cost much less than international brands.

General Electric (GE) has successfully reduced its cost to about 4,500 yuan ($684) for each kilowatt-hour while Chinese manufacturers have lowered it to below 4,000 yuan.

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