China had more than 80 wind turbines makers as of 2010
China had more than 80 wind turbines makers as of 2010, capable of producing over 40 Gigawatts, yet wind equipment demand is expected to be just 15 GW a year.
And companies looking overseas to fuel their growth are met by funding bottlenecks in Europe and the United States that are likely to mean a decline in orders.
At home, Beijing has taken action to rein in overcapacity – implementing stricter technical standards for wind turbine production, tightening approvals for new wind generators farms and suspending connections of certain wind projects.
Those government moves to cool the sector have already dented profits at China’s top companies, including Sinovel Wind Group and Xinjiang Goldwind Science and Technology . Earnings at several firms nearly halved in the first half of this year.
“The worst isn’t over for these guys,” said Min Li, head of alternative energy at Yuanta Securities. “Massive oversupply and a slowdown in wind turbine orders will keep margins depressed for a couple more years.”
Macquarie analyst Patrick Dai said he expected Goldwind’s revenue to decline at an annualized rate of 3 percent from 2011 to 2013.
“Oversupply and soft demand conditions are unlikely to improve significantly in 2012, which suggests that pricing pressure should persist in the next 12 months,” he said.
Chinese wind turbine generator makers’ global share had been expanding along with China’s rise as the biggest wind power market last year.
Seven Chinese companies, including Dongfang Electric and China Ming Yang Wind Power Group, were among the world’s top 15 in 2010, according to Make Consulting, a specialist in the wind power industry.
China is on track to install 15 GW of wind power capacity annually through 2020, down from about 19 GW added last year, according to the Chinese Wind Energy Association.
