Wind Power Interview with Chinese Wind Turbine Manufacturing Industry

- Visiting senior wind power expert Yang Xiaosheng How brilliant the Chinese wind turbine manufacturing industry once was, but it is currently facing difficulties and most companies are facing losses. There are many reasons for non-standard, unfair, excessive low-price competition and blind capacity expansion in the market, but equipment vendors themselves should also strengthen self-discipline, otherwise it is not conducive to the sustained and healthy development of wind power.

Reporter: Please briefly introduce the background of the development of wind power equipment in China.

Yang Xiaosheng: Before 2003, the development of wind power in China was not fast. The total installed capacity was about 700,000 kilowatts. This was developed without policies, funds, technology, talents, and equipment. Most wind turbines were purchased directly from abroad. Into.

Since 2004, China's wind power has entered a rapid development track. At this time, the background is that the pressure on environmental protection has increased and resources are being consumed. China's emissions rank second in the world. At the same time, the wind power technology has progressed rapidly, and the fan equipment has changed from a fixed pitch to a variable pitch and a variable speed, which has improved efficiency, and can be connected to the grid for long-term operation. At this time, the positioning of wind power has changed from "supplementary" to "replacement" of some petroleum and coal. The competent national authorities started drafting the “Renewable Energy Law.” At that time, the development of wind power was not constrained by the power grid and it had doubled in several years.

China's wind power equipment has a market and manufacturers have begun to increase, but basically it is the introduction of technology, digestion and absorption, and local production methods. Localization has led to a drastic drop in the cost of wind power equipment, which has driven the market further and created a virtuous circle.

Reporter: What are the characteristics and technological achievements of China's wind power equipment manufacturing industry?

Yang Xiaosheng: China's wind power technology not only makes full use of the world’s advanced achievements in scientific and technological research and development, but also stands on the shoulders of foreigners from the very beginning, and continues to improve during use, making it more suitable for the characteristics of wind resources in China, such as Anti-sandstorming, low temperature, freezing, low wind speed, etc., eventually formed the mainstream market for China's wind power market. At present, 6 MW wind turbines independently developed by China have been installed to promote the development of wind power stations in China to the forefront of the world. This road has achieved great success.

Today, China’s wind power installed capacity ranks first in the world, and more importantly, Chinese brand fans account for most of the domestic market. The majority of the wind turbines that turn in the wind in China's wilderness are Chinese brands. This is in line with the development of the "technology-for-market" automotive industry. There are strong contrasts between foreign brands in the streets. In addition, in this process, China has brought together a large number of wind power technical personnel, built a number of wind power technical test facilities and national research and test institutions, and laid the foundation for the further development of wind power technology.

Reporter: At present, China's wind power machine manufacturers are generally facing a crisis of survival. How is this caused?

Yang Xiaosheng: Non-standard, unfair and excessive low-price competition in the market is the main reason. Due to the pressure of market competition, the entire machineries have been competing at low prices. The price per kilowatt has dropped from more than 6,000 yuan in 2008 to more than 3,000 yuan at present, and it lacks reasonable profit margins. Some even lose money to earn money, and there is no technical investment and development. Guarantee. Developers also looked worried and worried that the technical performance, equipment quality and after-sales service of the purchased equipment could not be guaranteed.

Blind capacity expansion is another important reason. In 2011, the production capacity of wind turbines in China reached 30 million kilowatts, but the installed capacity of that year was only 16 million kilowatts. Nearly half of the production capacity was in surplus, and the whole machine manufacturers also reached a historical high of more than 80. Although eased in 2012, there is still excess capacity in the market.

Reporter: In your opinion, how is excess capacity generated?

Yang Xiaosheng: In recent years, although the number of small and medium-sized wind power manufacturing companies is declining, the production capacity of large companies has increased. According to analysis, there are two motives for this kind of blind expansion: first is the need for competition, large production capacity can bear large orders, and economies of scale result in a certain degree of competitive advantage. However, this reason is far from sufficient to illustrate the blindness of the expansion of large enterprises in China; the second is the need for access to wind power market resources. Some large corporations have been pressured by the local protectionism of the so-called “resource-for-industry” local policies adopted by wind-rich regions and have been forced to build factories to obtain local wind energy resources, and then use resources to change orders. The resulting expansion is irrational and has considerable blindness. This reason seems to be more illustrative of the current problem. The overcapacity caused by blind expansion is contrary to the laws of scientific development, and it is not in line with the optimization of industrial layout by enterprises. It is a waste of social resources and enterprises, and it also drags enterprises into operational risks. Local protectionism uses the "resource-for-industry" temptation, causing unfair competition and distorting the market. For example, some local governments have stipulated that developers who build wind farms within their jurisdiction should give priority to or must use the products of local wind power generators. This has caused the entire company to invest in local companies if they want to obtain orders. It is impossible for the whole plant enterprise to independently and reasonably plan the production layout.

Reporter: What is the current situation of overcapacity and how should it be solved?

Yang Xiaosheng: At present, China's wind turbine production capacity is shrinking. It is said that the entire machine manufacturer has reduced from 80 to 20-30 through mergers, reorganizations, and launches, and only 10 actually mass-produce, This is the result of competition in the market. Recall that in the last century, Europe also had 20-30 complete machineries, and the United States had reached dozens, but their market at that time was much smaller than that of China, and now they are reduced to several markets through market competition. Now. The Ministry of Industry and Information Technology had hoped to support only the top few companies, but in the end it let the market settle. In addition to relying on market competition to solve the problem of overcapacity, it is also necessary to break the protectionism of local governments, as long as the implementation of strict bidding laws can be solved.

Reporter: In addition to excess capacity, what problems still exist in the wind power equipment industry?

Yang Xiaosheng: The related transaction is a relatively common phenomenon in the wind power industry. For example, the State Grid, Guodian, and Datang have built wind farms, and they have also created wind turbines through holding companies or subsidiaries. This has caused some unfairness; The subsidy funds for renewable energy are not timely, resulting in a “debt chain” in which the developer defaults on the total purchaser’s payment, the entire supplier defaults on the part supplier’s purchase price, and the part supplier defaults on the purchase price of the material supplier. In this debt chain, some companies may go out of business because of increased financial costs or even broken funds. It is reported that several wind turbine manufacturers have had billions of receivables. However, this kind of debt chain is linear and unencumbered, unlike the complicated triangle bonds in the past. “There is a head and a debt,” and as long as the subsidy funds are put in place in time, the conflict can easily be resolved.

Reporter: Local protection, affiliated transactions, and arrears of payment are external factors, and equipment manufacturers are worrying and have their own reasons.

Yang Xiaosheng: Some individual companies have weak legal awareness, low credibility, inaccurate power curves and availability, and they are significantly less effective than foreign brands in actual operations. Some don’t pay attention to technology and do not respect knowledge. Individual manufacturers smashed each other, dismantled Taiwan, and so on, which also seriously affected the healthy development of the entire industry.

These issues have attracted the attention of all parties concerned. The China Agricultural Machinery Industry Association Wind Energy Equipment Sub-committee organizes research on various member units and believes that China's wind energy industry has entered a new period of development. In order to promote the healthy and sustainable development of China's wind power equipment industry, the “industry self-discipline initiative” is proposed and ten principles of self-discipline are cited. That is, law-abiding, honest and trustworthy, innovation and development, reasonable benefit, sincere cooperation, support for the industrial chain, equality and friendliness, scientific planning, international market, and social responsibility. We hope that through the conscious action of all enterprises in the industry, we can jointly safeguard norms, fairness and moderation. Competitive market environment. It is believed that this move will play an active role in promoting the healthy development of China's wind power industry.