China's Demand for Wind Turbines Will Increase 5.3% Annually

Wind capacity is expected to increase at an annual pace of 30% through 2013.

In 2013 the annual market for wind turbine systems in China is forecasted to be 62.3 billion yuan (US$9 billion). This annual increase of 5.3% will be driven by a variety of factors, primary among them government policies that encourage the use of renewable and nonpolluting electric power sources such as wind, according to a new report from The Freedonia Group, Inc., a Cleveland-based industry research firm. Such policies include favorable pricing of wind power generated from wind farms, tax incentives and subsidies.

Although somewhat modest by China standards, growth through 2013 is impressive, considering the high base from which it comes, the research company says. Demand for wind turbine systems exploded from less than 1 billion yuan in 2003 to more than 48 billion yuan in 2008.

This torrid growth was in large part a result of investment decisions made by state-owned enterprises motivated more by political incentives to meet national renewable energy targets than by profit motives.

Installed wind energy capacity in China reached 12.2 gigawatts in 2008, trailing only the U.S., Germany and Spain. Given Chinas tremendous potential for additional growth, the total installed wind capacity is expected to increase significantly, advancing at an annual pace of 30% through 2013.

Utility-scale electric power generation applications will continue to account for virtually all demand in 2013, reflecting government incentives to encourage utilities to use renewable energy to generate electricity, as well as manufacturer efforts to develop larger and more efficient turbine systems geared toward utility-scale energy production.

The national government has established a renewable energy target of 15% of total energy generated in 2020, up from 9% in 2008. Despite the dominance of the utility-scale segment, China is one of the largest distributed wind turbine markets in the world. Distributed wind turbine systems are usually installed in remote areas (e.g., islands, high mountains and border regions) to generate power away from the electrical grid. Distributed models are also used for street lighting, traffic monitoring, communication and certain industrial applications.

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