Thursday, August 28, 2008

China to Subsidize Wind Turbines

Pardon me while I remain extremely frustrated with a Congress that fights over passing any form of renewable energy subsidy extensions while the rest of the world races along into the future. We're too busy debating gas tax holidays. Grrr....

This is very positive news ... China has in a very short span moved to subsidize both solar and now wind. In the medium term this should be great news for A-Power Energy Generation (APWR) as it moves from sourcing wind components from Europe to China over the coming year - but for now the news will fall on deaf ears since people's timeframe is 6 minutes, 6 hours, or 6 days. 6 months or longer is an eternity this day and age.
  • The Chinese government said Friday it will subsidize wind power equipment makers as the country continues its drive to generate 15 percent of its energy needs from renewable sources by 2020. “This is quite significant,” said Caitlin Pollock, Asia wind energy analyst for Emerging Energy Research, based in Cambridge, Massachusetts. “It will spur further growth.”
  • The policy marks the first Chinese subsidy exclusively targeting wind power and highlights the Asian country’s increasing interest in wind as a major source of energy. The government has set an official target of 30 gigawatts of installed wind capacity by 2020.
  • Last year China had a total of 5.9 gigawatts of installed capacity, according to Emerging Energy Research. The research group expects the country will nearly double that figure this year to 11.1 gigawatts.
  • But the subsidy also continues China’s overarching policy of growing domestic manufacturing in parallel with overall renewable energy production. China wants to be greener, and it wants the transition to be led by local companies.
  • That’s why only Chinese majority-owned turbine manufactures that source blades and other components from majority locally owned suppliers will qualify for the subsidy. And the subsidized amount--$88 per kilowatt for the first 50 units generating 1.5 megawatts or more--can only be used for research and development purposes.
  • Although there are more than 40 wind turbine vendors in China today, most have opted to license technology from foreign companies. The policy is intended to reverse that trend, Pollock said.
  • And in the long run, the subsidy should help make Chinese wind companies more competitive with their foreign rivals, such as GE Energy of the U.S. and Danish Vestas Wind Systems.
Long A-Power Energy in fund and personal account

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