Sluggish market buffets turbine makers (2)

In 2009, the National Energy Administration (NEA) announced plans to bring China's wind power capacity up to 100 gigawatts by the end of 2020, up from the roughly 12 gigawatts of on-grid capacity the country had at the time. Last July, the NEA revised this goal forward to the end of 2015.

"The cheap credit and subsidies the government handed out to firms in the wind industry in order to meet national energy targets also pushed turbine makers to produce more products than the market needed," Lin Boqiang, director of the Center for Energy Economic Research at Xiamen University, told the Global Times.

As Lin explained, the situation quickly became unsustainable for the country's turbine makers, more than half of which have had to scale back their manufacturing operations.

While some wind equipment makers have lowered their prices in a bid to reduce inventory and keep their operations running, many power transmission companies in the downstream market are now reluctant to invest heavily in expensive upgrades to support greater flows of wind energy, Wang Haisheng, a renewable energy analyst with Huatai United Securities, told the Global Times.

Making matters worse for companies like Sinovel, many of the country's cash-strapped local governments cannot afford to keep doling out hefty subsidies to wind turbine manufacturers, a development which could soon lead to tougher times for the industry, Wang said.

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