In 2008 China could be seen rapidly closing the gap with the traditional wind market leaders – the U.S., Germany and Spain. By 2009, China, riding a massive post-GFC stimulus program, became the world’s largest buyer of wind turbine equipment. In that same year, the U.S. managed to maintain its strong pace of wind installations but Spain and Germany started falling off the global pace as post-GFC austerity forced them to drop governmental price supports (so-called “feed-in-tariffs” or FiTs) for wind installations. Finally, in 2010, China surpassed the U.S. in wind-power installations (18.9GW vs. 5.6GW) and emerged as the clear global front-runner for wind-energy purchases and installations.
But three caution flags are now waving for China:
(1) For the moment, there is still a huge asymmetry in the number of installations which GE has made in the Chinese market (over 1,000 in China alone, over 14,000 worldwide ) versus the number of installations Chinese wind-power companies have made in the U.S. market (3 installations, as of December 2010). Moreover, lingering tight credit strongly favors established market leaders when it comes to wind energy projects and, for now at least, financing costs are currently prohibitive for new entrants. This is a substantial market hurdle for Chinese entrants to the lucrative U.S. market, not a government barrier.
(2) In a mid-summer 2011 settlement announced by the Office of the U.S. Trade Representative, the Chinese government agreed to stop subsidizing its wind power manufacturers. This put an end to a six-year, WTO-inconsistent effort known as Notice 1204 and led by National Development and Reform Commission, to favor Chinese suppliers in the manufacture and installation of Chinese wind-turbines.
(3) Earlier this week, China’s government adopted stricter regulations in anticipation of an expected “bloodbath among turbine producers” as reported by the Financial Times on October 24th.
It’s a marathon, not a sprint to the wind-energy future. Far too early to proclaim China the winner.
______Assessing China / The TEA Collaborative______ 
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October 31, 2011 at 12:22 pm
Henry Kwong
China has just had a few blistering sub 5 minute miles, but as you indicate, there is no guarantee that trend will continue and there is bound to be a slow-down. The remarkable annual doubling of installed wind capacity cannot continue forever.
In the short term, the betting money may be placed on China, but the mid and long term prospects are still evolving. If America wants a place at the table, it will need to pick up the pace and enact some sensible, long term renewable energy policies. There is clearly a need for longer term investment and production tax credits. We are faced with considerable challenges, including insufficient capital, severe federal budget constraints and no cash or incentives for feed-in-tariffs to spur development.
It remains to be seen whether the private sector can step in fully and provide necessary capital to complement federal programs and subsidies. Ironically, as you are involved with, we are trying to attract Chinese capital to our shores to bolster clean energy investments.
In 26 years, one year for every mile of the marathon, let’s see where the U S and China rank in terms of installed wind capacity and actual percentage contribution from wind to overall electricity production. Who will be the global top companies in wind turbine manufacturing at that time? Where will GE place? Will there be other American wind turbine manufacturers on the list? How many Chinese companies will appear on the list?
America needs to get its act together so it can lay down a few sub 5 minute miles of its own.