China’s Wind Co. Profits, share price soar by 60%: 2 Turbines an Hour being Installed

By Juan Cole | (Informed Comment) | – –

The South China Post reports some incredible figures about the profitability China’s wind energy companies. A new study by the Bank of China International (BOCI) is foreseeing profits of 25 to 64 percent for the rest of 2016.

The reason for this optimism? The government is committed to stringing no less than eight new ultra-high-voltage (UHV) power lines across the country that will likely mainly transmit electricity from wind farms.

China intends to get between 25% and 33% of its electricity from wind by 2030, i.e. in only 14 years! And by then it intends to be off [new] coal entirely. If Beijing can pull this off, it will literally change the world (for the better).

Moreover, the Chinese government has put in regulations in eight provinces and 3 autonomous regions requiring that wind and solar be used to generate electricity for a certain number of hours each day.

Shares in the sector have increased in price 67 percent since January.

China is building roughly two new wind turbines every hour. In part, this wind power frenzy is driven by a desire to reduce carbon dioxide emissions. But in part, it is a response to very substantial discontents in Chinese cities with air pollution, which is damaging the health of families and children.

Beijing, March 2015 – Juan Cole

Press in the US tied to oil and gas interests made a lot of noise about a report in September that estimated that in the first quarter of 2016, 25% of China’s new wind turbines were idle. But that was because the UHV lines hadn’t reached them yet. Even just by the end of 2016 the BOCI estimates that under-utilization will fall by as much as 9 percent, as the UHV lines are extended. Wind farms can be built really quickly and relatively inexpensively and once they are built the fuel is free. So if China builds out the farms even before they can be connected to the new UHV grid, what difference would that mak? They’re going to be built anyway over time so it is just a matter of which year’s budget they go on.

Moreover, the experience, know-how and manufacturing capacity that Chinese firms like SANY Heavy Energy are gaining is turning into exports and projects abroad, as well. SANY has huge wind turbines that generate 2 megawatts of power each, and has just sold a batch to the United States. It also has prospects in South Africa, and is making a $3 billion investment in India, with total megawattage of 2,000 MW, i.e. 48 million kilowatt hours a year.

The backward and often scientifically illiterate US Congress can barely bring itself to allow a tax write-off for wind turbines each year, disrupting the industry here with uncertainty (even though it gives big tax breaks to oil and gas companies). If they aren’t careful, they’ll give away this whole global industry to China.

12 Responses

  1. 2 MW wind turbines are on the small side. Think 8.

    But yes, everyone else is going to have difficulty competing with the Chinese.

    By the way, the usual abbreviation is UHVDC as the transmission lines are direct current.

    • 2-3MW is the sweetspot for land based turbines. Transportation of the blades limit the practical size on land. At sea the size limitations are greatly relaxed, and currently 5-8MW is being deployed. The one 8MW land turbine, is a test facility for a marine turbine, and not intended to be deployed on land.

  2. King of puts paid to the all too common argument, that we shouldn’t do anything about global warming because China won’t. But, I don’t expect that talking point to go away.

  3. If Trump is right, the Chines are probably just trying to mascaraed their own global warming hoax. But they can’t fool the GRand Old Party.

  4. It seems to me that things like this combined with the building of the ‘New Silk Road’ will ‘clean our clocks’ and make a total end run around our practice of domination through sea power. My thoughts are that the Chinese naval activities in the South China Sea are nothing but diversionary tactics to keep us off balance and make us believe that our naval power will continue to be of primary importance in the years to come.

  5. It is indeed ironic that the Chinese are investing so heavily in green energy, including government subsidies, while the US continues to subsidize the enormously profitable oil and gas companies- just because of the power of their lobbies. It’s not that the Chinese are a threat to us- we are a much bigger threat to ourselves, with our now endemic corruption and stupidity. Instead, their efforts should be viewed as a challenge and an inspiration,

  6. Author mentions that by 2030, “China intends to be off coal entirely,” and links to a Guardian article. Nowhere in the linked article is that claim backed up. Rather, the article states that despite increasing wind capacity, China still generates 70% of its energy from coal. Was curious to see how the author is backing up that claim, if anybody can shed light.

  7. I couldn’t agree more. My wife and i just returned from 2 weeks in China and our tour guide was very pointed about the fact that the pollution level has become a big concern for the citizens of China. I believe that if the Chinese government decides to do something about it, it will get done. The joys of a managed economy! No concern about political philosophies or whose corporate toes get stepped on. I’m not saying I think this is the best form of government but things can get done when the will is there. Our guide said that Chinese people are just like North Americans in that they just want to live their lives. They just don’t have the pesky issue of deciding who to vote for. Don’t anybody sell China short on this one.

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