After years of record-breaking growth, China’s wind energy sector is headed for at least two years of painful industry shake-ups, say analysts.
Wind farm developers and their suppliers have been expanding rapidly, and outpacing the development of the high voltage transmission lines needed to bring new sources of wind energy to the areas that need it. Most of the wind projects are located in China’s remote northern lands, where more than US$1 billion-worth of wind energy went to waste last year due to a lack of suitable transmission lines.
Chaotic growth, stiff competition and unorganized parts manufacturing mean that the industry will see falling profits while it waits for the national grid to catch up, note experts.
Last year, the central government took over the approval process for new wind projects to stop local governments from bringing in developments without the supporting infrastructure. It also tightened regulations to avoid technical problems caused by periods of low wind and sub-standard equipment.
China’s installed wind capacity of 62.36 gigawatts (GW) as of 2011 makes it the world’s largest wind energy producer, with more than 26 per cent of global capacity. Only slightly more than three quarters of China’s wind projects are connected to electricity grids, however. By 2020, China plans to achieve an on-grid wind capacity of 200 GW.
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