Qi Hesheng, China Wind Energy Equipment Association
Release Date: 2009-06-24
What is role of CWEEA and what institutions does it represent?Chinese Wind Energy Equipment Association is a guild that represents companies operating in the wind energy equipment and component manufacturing industry, as well as trading companies, consulting and service providers, R&D organizations, scientific researching institutions, colleges and universities, and social groups.
Through its advisory role, CWEEA supports the government in policy making and acts as bridge between the government and the companies. It promotes companies operating in the industry and ensures that they have a thorough understanding of China’s policy framework. Also, CWEEA provide industry news and information, with the ultimate objective of promoting the wind power industry.
What is the difference between CWEA and CWEEA?
China has a lot of wind power related associations. CWEA is the subordinate organization of Chinese Renewable Energy Industries Association, and is focused on academic research and technology development in the Chinese wind industry. On the other hand, we are focused on representing the wind power companies. The predecessor of CWEEA was Chinese Mechanical Industrial Department, which used to represente all manufacturers in China. Today, CWEA and CWEEA have the common objective of serving the wind power industry.
Could you give us significant figures about the Chinese market?
By the end of 2008, China has more than 11,660 wind power generator units, and the total installed capacity is 12.15 GW. Now China already counts over 240 wind farms located in 24 different provinces and cities. The caracteristic of the Chinese wind farms are very different to those located in Germany for example. In Germany, there are many small scale farms geographically wide-spread while in China projects are mor concentrated geographically with much larger scales.Most have capacities of 50 MW, 100 MW and 200MW.
Chinese government fixed new targets with goals of 35 GW installed capacity by the end of 2011 and 150 GW by the end of 2020. Out of this the offshore wind power capacity will increase to 5GW in 2011 and 30GW in 2020. The new plan is still waiting for approval.
There are nearly 70 turbines manufacturers in China and a huge number of suppliers across the value chain. Will the Chinese market be large enough to sustain such a large number of players?
China does have many manufacturers and Chinese wind market is prone to be saturated in the future as supply will exceed demand. I expect concentration in the development of the industry in the future which will be accompanied by a large number of mergers and acquisitions. The companies that will lead the Chinese wind industry in the future will be those with proprietary intellectual property rights and the ability to conduct in-house research and development.
When and how do you expect this wave of mergers and acquisitions in the wind industry to commence? Will the small companies be acquired by the big companies and finally disappear from the market?
The merger and acquisition process has already started among the large stated-owned companies, and it is not limited to China. For example, GoldWind acquired a 70% share of VENSYS, a Germen wind turbine manufacturer.
Meeting international quality standards is essential to be successful in the international marketplace, but Chinese products do not have the best reputation for quality. How has the quality of manufacturers products evolved over the past few years, and how could the products of Chinese companies meet the quality level required to compete in developed markets like Germany or Denmark where low prices are not the primary criteria?
During the past years, Chinese wind power companies have experience quality problems. They have not paid attention to quality since the beginning, but they realized the importance of quality once they experienced the first problems that influenced their profit. Now Chinese companies are trying improving the quality of their products gradually.
At the same time, they are learning about the market standards, rules and policies overseas, which helps them to better understand the competitive situation in the European market. Strengthening their research and development capabilities helps Chinese companies to provide high technology and quality product to the high level market.
For the moment we mainly see European companies trying to place their products on the Chinese market, while not so many Chinese companies are exporting. What are the challenges that Chinese companies are facing in order to really start gaining foreign market share?
Today, Chinese companies are also trying to promoting themselves overseas. During my trip to the American Wind Power Expo, I saw many faces of Chinese companies; they had stands to show their products and services to the world.
The Chinese market is one of the most promising markets in the world for turbine and component manufacturers due to its large scale project, but for foreign manufacturers it can be a very difficult to penetrate the market and participate in its growth. What makes it so difficult to access the Chinese market and what advice would you give to those looking to gaining market shares? Which products and services are in high demand, thereby creating the most important reservoirs of growth?
In the past two years the production of wind turbines by Chinese manufacturers increased at a rapid pace while the Chinese market largely relied on imports before. Nowadays, the Chinese government gives more support to local manufacturers via releasing policies and law.
Until last year, supply fell short of demand in the overseas wind power equipment market, so foreign companies paid more attention to their home market than to the Chinese market. As Chinese wind industry is developing very fast in comparison with foreign markets, the demand for low cost, high quality, home-made products has grown very fast. Foreign products are not only high cost but also the service problem, once their products have quality problem, the after sale service is not so good. These factors all affect their development in China. If foreign manufacturers want to succeed in China, they need to improve their service.
China always says that it is hunger for the latest technology from overseas, but which specific technologies are you looking for?
We need the design and control technology of whole wind power generator unit.
Do you have any suggestion for wind turbine manufacturers to succeed in Chinese market?
They are already succeeding in Chinese market. Companies like Nordex, Vestas, Gamesa, have factories in China and occupy a large market share.
CWEEA will organize the next Shanghai International Wind Energy Exhibition and Symposium, why should companies attend it and what can they expect from that event? What makes it different from the other events in China such as Beijing Wind Power, Wind Power Asia?
There are lots of exhibition related to wind power, and we choose Shanghai because it is close to Jiangsu Province and Zhejiang Province, in which many wind turbine and component manufacturers and supplier located. Shanghai is the purchase centre of the wind power companies.
In recent years, small scale generators in Europe and U.S.A have developed very fast and have also developed purchasing centres in Shanghai. Lots of these small scale generator suppliers will attend our exhibition.
| Company: | China Wind Energy Equipment Association |
| Position: | Secretary General |
| Country: | China |