Business
Chinese Wind Power Companies Target Global Markets
China’s Goldwind Science & Technology Limited is one of the world’s biggest makers of wind turbines, a cornerstone of the booming clean power business, but is unknown outside its home country.
Goldwind aims to change that. In a Minnesota farmer’s cornfield, the company is erecting three 20-story-tall windmills in its first American project and hopes it will help to woo other buyers.
“There are a lot of leads and we are following them up,” said Kerry Zhou, Goldwind’s director of development. “We certainly expect that by 2011 we can get good results.”
China’s market for wind equipment is on track to overtake the United States this year as the world’s largest, spurred by a government campaign to promote renewable energy to clean up its battered environment and curb surging demand for foreign oil and gas.
Now the biggest Chinese manufacturers want to expand to the United States, Europe and other markets. Western suppliers could face new competition as low-priced Chinese rivals seek to profit from global efforts to limit climate change.
Chinese manufacturers could get a boost if officials at this week’s United Nations climate summit in Copenhagen, Denmark, agree on new measures to spread use of clean energy.
Beijing is promoting the industry as part of sweeping efforts to transform China into a creator of profitable technologies. Utilities have been told to step up clean energy spending even as the global crisis cuts into investment elsewhere.
“China is a major player and will dominate the future development of wind,” said Lars Andersen, president for China of Denmark’s Vestas Wind Systems A/S, the world’s biggest maker of wind turbines.
Chinese wind companies’ technology lags behind global leaders such as Vestas and General Electric Co. But their prices are up to 50 percent lower, which industry analysts say should make them competitive abroad.
“The performance-to-price ratio is quite attractive,” said Victoria Li, who follows the industry for Credit Suisse in Shanghai. “I think they could see strong growth from export revenue within two years.”
Last year, China accounted for 22 percent of new global wind capacity, while the United States was 29.6 percent, according to BTM Consult, a Danish research firm. This year, Credit Suisse says China will install up to one-third of new capacity.
The industry has gotten a boost from a flow of money through the Clean Development Mechanism. The U.N. programme allows industrialised economies to meet commitments to reduce greenhouse gas emissions by paying developing countries to cut their own instead. China is the biggest recipient of CDM money.
Chinese demand is so huge that with almost no foreign sales, Goldwind and rivals Sinovel Wind Co. and Dongfang Electric Co. already rank among top global manufacturers.
Sinovel, Goldwind and Dongfang together made one of every eight wind turbines sold worldwide in 2008, according to BTM. Vestas led global sales with 19.8 percent and GE was second with 18.6 percent.
Beijing-based Sinovel made its first foreign sale last year, shipping 10 1.5-megawatt turbines to India, said a company spokeswoman, Liu Chang. Also in 2008, Goldwind sold six of its smaller 750-kilowatt units to Cuba.
In Minnesota, Goldwind is installing three 1.5-megawatt turbines on a farm in the town of Pipestone. Zhou said the company hopes the site will prove its turbines operate reliably under U.S. weather conditions.
Beijing’s tactics in promoting its suppliers have caused strains in trade ties at a time when other governments are scrambling to preserve jobs.
The European Union Chamber of Commerce in China complains that foreign producers have been shut out of bidding for major wind projects. Beijing also required that 70 percent of parts in turbines used in China be domestically made, a rule that was dropped in September only after major foreign producers had set up Chinese factories.
November’s announcement that a Chinese manufacturer, A-Power Energy Generation Systems, would build a Texas wind farm prompted an outcry from American critics that stimulus money the project might receive should not go to China. A-Power and its American partners said they would open a U.S. factory.
“We definitely are closely watching the controversy and obstacles for this current project to see what will happen,” said Goldwind’s Zhou.
Aggressive government goals issued in 2005 call for at least 15 percent of China’s power to come from wind, solar and hydropower by 2020. Officials say that target might be boosted to 20 percent.
In July, Beijing raised its wind power goal to 150 gigawatts of generating capacity by 2020, the equivalent of 300 standard coal-fired power plants, up from the 2005 plan’s target of 30 gigawatts.
But the industry faces technical hurdles to its growth.
Wind farm construction has raced ahead so fast that 25 percent have yet to be connected to the national power grid. Like the United States, China faces the problem that its windiest areas in the desert northwest and northern grasslands are far from populous cities, requiring expensive transmission lines.
Other companies are developing technology ranging from solar panels and fuel cells to more far-out systems that make power from garbage and used cooking oil.
Business
SMEs Dev: Firms Launch N100m Loan Scheme
The facility will be disbursed through participating Microfinance Institutions (MFIs), which will in turn extend the loans to their customers, particularly SMEs, as they directly interface with businesses at the grassroots level.
The Executive Director of COMCIN, Mr. Micheal Ogbaa who represented the Chairman, Dr. Iredele Oyedele (FCA, FCCA), said the initiative is designed to strengthen micro-lending institutions and expand access to finance for grassroots entrepreneurs, particularly women and youths in the informal sector.
Ogbaa explained that COMCIN does not lend directly to individuals but works through its network of microfinance and cooperative institutions, which in turn provide loans to end users.
“We came together to advocate for the microfinance ecosystem. Commercial banks often exclude people at the grassroots, but our members are positioned to reach them. This facility will empower them to do more,” he said.
He noted that the loan scheme offers low interest rates and flexible repayment plans, making it more accessible to small business owners.
According to him, about 90 percent of beneficiaries are expected to be women, who play a key role in sustaining families and driving economic activities at the local level.
“Our focus is on traders, service providers, and players in the informal sector. These are the real movers of the economy. By supporting them, we are strengthening families and contributing to national development,” he added.
Ogbaa disclosed that eligible SMEs with proven integrity and business track records could access up to N5 million each through participating micro-lending institutions. The rollout has commenced in Lagos and will extend to Abuja, Enugu, and other regions, including the South-West, South-East, and North-East.
He said 12 micro-lending institutions have already benefited from the scheme, while 85 applications are currently being processed under the pilot phase.
“Our target is to reach at least 100,000 SMEs nationwide. We are building a platform that connects funding partners with credible micro-lending institutions, creating a reliable channel for financial inclusion,” Ogbaa said.
He added that COMCIN is also working to attract larger funding pools from development finance institutions and private investors, noting that successful implementation of the pilot phase would boost confidence and unlock more capital for SMEs.
“We have seen encouraging testimonies from early beneficiaries. As we demonstrate transparency and efficiency, more institutions will be willing to channel funds through us,” he said.
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