“Opportunities for turbine developers and other service providers”

Isaac Bah and Jörg-Rainer Zimmermann, 17 Mar 14
Stefan Gsänger, secretary general of the World Wind Energy Association (WWEA), on the wind energy boom in China and the prospects for international investors.

new energy: What opportunities are there for German wind energy firms on the Chinese market?
Stefan Gsänger: The markets in Asia are, of course, highly diverse. But China is by far the largest wind energy market in the world. In 2013, China expanded its wind power capacity once again, increasing its market share even further. The country’s share of the global market now stands at almost 50 percent. German companies are important players in the wind industry, although German turbine manufacturers do not hold a large market share. Many German suppliers do, however, work with Chinese firms, and the Chinese market also offers opportunities for turbine developers and other service providers in the engineering sector.
new energy: What are the opportunities in other Asian countries?
Stefan Gsänger: As I said, the Asian markets are very heterogeneous. India is certainly the second most important country, as it has enjoyed a very stable market for almost two decades and is still within the global top five. Also, given the growing economy and population, it is likely that the Indian market will continue to expand. Following the disaster in Fukushima, Japan is in a special situation – torn between conservative forces and those who advocate a clear-cut switch to renewables. Similarly to South Korea, the Japanese government is focusing on offshore potential and, in my view, neglecting the expansion of onshore facilities where much faster progress could be made. Many developing and newly industrialised nations such as Pakistan, Mongolia, Thailand and the Philippines are taking their first steps with large-scale commercial wind farms, and definitely have the potential to develop into interesting markets in the medium term. We are currently in discussions with various international organisations on how the international community can support these efforts.
new energy: Last year’s solar dispute between China and the EU has led to diplomatic and economic discord. Will this make it even more difficult for European wind companies to enter the Chinese market?
Stefan Gsänger: In terms of the future of renewables as a whole, it wasn’t particularly clever of Europe to risk sparking a trade war with China. In the final analysis, the bilateral rise in the cost of products resulting from the punitive duties will be at the expense of growth in the renewables sector. In China, however, the trade conflict is seen as having more to do with the EU as a whole rather than with individual member states. What Germany and German manufacturers have in their favour is that politicians have been trying to prevent further escalation. In my opinion, German-Chinese relations will not suffer as a result of the dispute, especially since the market for wind turbines is structured in a completely different way to that of solar plants. Customer retention also plays an important role in the wind energy sector. Ultimately, it is not only a question of a turbine’s purchase price, but also of the
customer’s entire experience with the manufacturer. Service and maintenance are also very important to operators.
new energy: In April, the 13th World Wind Energy Conference (WWEC) is taking place in Shanghai. What can visitors and exhibitors expect from the event, and what are your own expectations?
Stefan Gsänger: Our main topic this year is “distributed wind power – matching generation and demand”. In this context, we want to discuss the prospects of wind energy use, also from a Chinese perspective. Up until now, China has mainly focused on installing huge wind farms with several gigawatts of capacity in certain provinces. But now it has realised that these wind farms are too far away from where the generated electricity is actually consumed. This has sparked a debate on how electricity from the northern and western provinces of the country should be transported to the east and the south. One option that will be a key point of discussion at WWEC 2014 is more decentralised expansion. In China, this would mean in stalling smaller wind farms (I mean small in Chinese terms!) more widely across the country so that they are closer to the large centres of consumption such as Beijing and Shanghai. This would also partly reduce the need to expand the grid.

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