Winds of change
Updated: 2008-01-14 14:27
With oil prices hovering at record highs and concerns about climate change rising, China has reached the tipping point for clean energy development, especially wind power.
Despite challenges including low margins due to high costs facing wind energy companies, the country could potentially become one of the world's largest markets for wind power.
So says Gerald Page, CEO of Han Wind Energy Corp.
The company will construct a 50 MW wind project in the Inner Mongolia autonomous region this year. The project will involve a total investment of $78 million, Page says.
Han Wind is also awaiting approval for a follow-on 250 MW project, which requires an investment of $425 million, in Inner Mongolia.
"It is a long-term investment," Page says.
"I think anyone coming to China today thinking they are going to get quick return should go somewhere else. To come to China, you have to be committed to a long-term vision and work with the changes and policies, and hopefully have some input into the policymaking."
Han Wind was established in 2005 to focus on developing commercially viable wind projects in China, with DGM Bank &Trust Inc and Azure International being major shareholders. DGM is an offshore bank located in Barbados, West Indies, and Azure is a specialized advisory and investment firm focused on sustainable energy technologies.
Page, who is also DGM's president of investment banking, was involved in wind projects in Australia, Greece, Canada and the Caribbean during the past eight years. He says he started to take an interest in China six years ago when he found China was developing a renewable energy law.
"When you want to go into a country, there are three things to look at: legislation, policy procedures and economics. If you look at the renewable energy law in the context of the three things, you can make a decision of where this country is in the time of development," Page says.
"I can't wait for five years on to make a decision. I have to pick the country that is starting to get ready," Page recalls.
Wind power accounts for less than 1 percent of China's power generation while globally it amounts to 5.7 percent of power generation capacity.
But determined to diversify its energy supply and promote sustainable development, China has set a goal of 30 GW of wind power capacity by 2020, which is expected to account for about 2 percent of the country's total power generation capacity. The country's Renewable Energy Law took effect January 2006.
Rich in wind
China has abundant wind energy resources. Practical wind energy potential stands at 235 GW at a height of 10 meters, according to estimates by the Chinese Academy of Meteorological Sciences. China also has a large, shallow coastal shelf along its eastern seaboard. Offshore wind energy potential may be three times greater than onshore potential, scientists estimate.
Since 2004, annual installations of wind power in China have grown dramatically, more than doubling each year due to firm government policies including the Renewable Energy Law and other supporting regulations. A record 1.4 GW of wind power capacity was installed in 2006 and 2 GW is expected to be installed in 2007, according to figures from Han Wind.
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