JAPAN | Chinese renewable energy firms have their eye on Japan

Posted on July 12, 2011

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JAPAN | ASAHI SHIMBUN | 12 July 2011

BEIJING–With Japan looking to hedge its bets on nuclear energy by exploring other renewable energy sources, Chinese companies are eagerly vying for a seat at the table, anteing up its leadership in wind and solar power technology.

While Japan has built 54 nuclear reactors, China has grown into a global power in renewable energy, although its domestic market is fraught with problems. China also has 13 nuclear reactors and is building 28 more.

Top manufacturers such as Goldwind Science and Technology Co. and Yingli Green Energy Holding Co. are looking to break into the Japanese market as wind and solar power gets renewed attention following the accident at the Fukushima No. 1 nuclear power plant.

The Chinese government has committed public funds to improving the international competitiveness of manufacturers of renewable energy facilities.

The government adopted a policy of encouraging the use of local products until it was abolished in February in the face of criticism from the United States, who felt it was giving an unfair advantage to Chinese firms. Goldwind Science and Technology has produced 7,800 wind turbines, or triple the number installed in Japan, since it was established 13 years ago.

The company, based in Urumqi, Xinjiang Uighur Autonomous Region, ranks among the world’s five top makers of wind power generation facilities.

It has accumulated technologies by acquiring a German company and now exports to the United States.

Yingli Green Energy Holding Co., a major manufacturer of solar panels established in 1987, has increased its presence in European markets, working with a German partner.

The company, based in Baoding, Hebei province, operates offices in the United States, Germany, France, Italy and other countries.

Its credo is to provide “green energy affordable to the public.” To raise its profile, the company has become an official sponsor for the 2014 World Cup in Brazil, following upon its sponsorship of the 2010 World Cup in South Africa.

Last year, China replaced the United States as the country with the world’s largest wind power generation capacity.

Its capacity shot up 35 times over the past five years to 45 gigawatts, exceeding the country’s nuclear power generation capacity of 11 gigawatts.

China plans to add more than 70 gigawatts by building six large wind power stations on land and two on the sea in the next five years.

The country also has an ambitious plan to raise its wind power generation capacity to 200 gigawatts by 2020.

But the infrastructure has failed to keep up with the breakneck pace of expansion.

About 30 percent of the country’s wind power generation capacity cannot find its way into electricity grids because transmission lines are underdeveloped.

It is said that many broken wind power generation facilities have been left unattended.

Domestic wind power stations are also hampered by problems.

In February, defects that originated in one facility spread to 598 wind turbines at a power station in Jiuquan, Gansu province, suspending transmission of 840 megawatts.

In April, similar problems occurred at wind power stations across the country, affecting more than 1,000 turbines.

It is said that equipment was not installed at domestic power stations to prevent defects from spreading to other turbines to hold down costs.

China accounts for about half of the global production of solar power generation facilities.

The government plans to raise its solar power generation capacity from less than 1 gigawatts at present to 10 gigawatts in the coming five years. The goal for 2020 is 30 gigawatts.

Still, China exports 95 percent of solar power generation facilities produced at home, rather than using them for domestic power generation, due to high generation costs.

In terms of wholesale prices, electricity from solar power costs about three times as much as electricity from thermal or nuclear power, while electricity from wind power costs up to 50 percent more.

The government has just begun to promote solar power in the domestic market, by offering subsidies for power transmission and distribution business and for investments in remote regions.

In China, prices of wind power generation facilities fell as much as 40 percent over the past two years amid a supply glut as local producers mushroomed.

Li Li, assistant to the president at Goldwind Science and Technology, said the company will put greater emphasis on overseas markets.

The company announced a tie-up with Wind-Smile Co., a Japanese wind power company, at the end of last year and was preparing to export its products for the first time to Japan.

It has turned increased attention to the Japanese market since the accident at the Fukushima No. 1 plant.

A spokesman said the company is conducting a comprehensive evaluation and analysis of Japan’s wind power generation market following the March 11 Great East Japan Earthquake.

According to Wind-Smile, the prices of Goldwind Science and Technology products are less than half of those of Japanese products.

Shuzo Fukudome, president of Wind-Smile, said the Chinese partner will become the Black Ship for Japan’s wind power industry.

“(Goldwind Science and Technology products) will substantially improve the cost constraints, one factor that has barred the wide use of wind power generation in Japan,” Fukudome said.

Wind-Smile will install a 30 megawatt facility from its Chinese partner near Ishikari, Hokkaido, and expand the combined output of its wind power generation facilities nationwide to 200 megawatts within three years.

Miao Liansheng, chairman of Yingli Green Energy, also said Japan’s energy sector will go through a structural change.

The company is preparing to set up a subsidiary to export its products to the Japanese market, which is dominated by domestic manufacturers.

“I’m sure that our prices will attract Japanese customers,” Miao said.

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