Business Global Features

China: Wind power's new force

Beijing spent some $2 billion on the renewable energy source last year, and the mainland is on track to eclipse Europe, Japan, and the U.S. in a few years.

China's alternative energy market is growing in gusts. Beijing has set the ambitious goal of having renewable energy (including hydro, solar, biomass, and wind) meet 15 per cent of its energy needs by 2020.

The European Union, by contrast, is aiming for 20 per cent by the same date, and the U.S. just 7.5 per cent by 2013. Achieving that 15 per cent goal will take an astonishing $265 billion in investment, and just last year China sank some $10 billion into alternative energy, second only to Germany.

For China, wind is the fastest growing renewable: In 2006, the government spent some $2 billion, doubling capacity, and putting China on track to eclipse top wind manufacturers in Europe, Japan, and the U.S. within a few years, predicts a report released on Nov. 14 by Washington (D.C.)-based Worldwatch Institute.

"Wind power in China historically has been driven by a desire for industrial development," says Eric Martinot, senior visiting scholar at the Tsinghua-BP Clean Energy Research& Education Centre in Beijing and one of two authors of the report.

"But it is now being eclipsed by a desire for energy security. Beijing wants anything that can substitute for energy imports and anything that can stretch out China's coal reserves." Martinot predicts China will easily exceed its wind power plan, which calls for 5 gigawatts (a gigawatt equals 1 billion watts) of installed capacity by 2010.

By the end of this year he expects China to already have 4.6 gigawatts and by 2010 two or three additional gigawatts beyond its goal. By 2020, Martinot says, Chinese wind projects will produce 30 gigawatts, equal to the amount the country will get from solar power. "I suspect that at some point in the middle of the next decade, the government will revise their target upwards," he says.

"The demand for turbines here in China is going to be huge," says Gary Evans, CEO of GreenHunter Energy, a privately held alternative energy company based in Grapevine, Tex. "That's because there is a mandate for state utilities in China to use alternative energy. And China has excellent wind resources, especially along the coast," he adds.

China has estimated that it has total potential wind resources which, with development, could reach 250 Gw onshore and 750 Gw offshore. And installed capacity is expected to double again this year.

All that adds up to a very promising market for the wind players of the world, including Randers (Denmark)-based Vestas Wind Systems A/S, the world's largest wind company.

Already, Vestas has 1,121 installed wind turbines in China totalling 843 megawatts, the largest number of any company. With the opening of a facility in late September, Vestas now has three factories, all in the coastal city of Tianjin, producing generators, nacelles (the hollow shells which house the drive shaft and gearbox), and hubs for 1.8- and 2-megawatt wind turbines.

Its staff in China has grown from just 50 employees two years ago to more than 1,000 today. Meanwhile, the Copenhagen-listed company has seen its stock more than double in value over the past year.

"In 2006, China was already fifth or sixth largest [wind market] in the world," says Vestas President and CEO Ditlev Engel.

"It's clear that China will become very important," he adds. "During construction as we looked at the market development, we decided what we were doing was not big enough. So we enlarged the facilities. What we are ending up with now is quite a significant manufacturing setup," adding that Vestas in Tianjin will produce both for China and for export.

But while foreign wind powers like Vestas, Spanish company Gamesa Corporacion Tecnologica, and GE Wind Energy (a subsidiary of General Electric's (GE) GE Energy) expand in China, local players are emerging, too. In the 10 years since its founding, Xinjiang-based Goldwind Science & Technology has grown to become the market leader, with 33 per cent market share.

That compares to 24 per cent market share for No. 2 player Vestas, 17 per cent for Gamesa, and 13 per cent for GE. Now, according to Chinese press reports, Goldwind is seeking a listing on China's domestic exchange in Shenzhen. Meanwhile, the second-largest local player, Sinovel Windtec, only has 6 per cent, with a scattering of other locals companies having around 1 per cent and less.

China's massive wind rollout is even leading to components shortages around the world and a backlog of orders for wind turbines.

"There's a short supply worldwide. Some of the larger European manufacturers will tell you to wait to 2012," says GreenHunter Energy's Evans, who is aiming to source Chinese-made turbines for wind farms he plans to open in New Mexico, California, and Montana. "Obviously, we are concerned about the technology and quality level," he says.

But after inspecting some Chinese turbines, "we think they very well may be superior to some European turbines," he adds, declining to name which company he will be sourcing from.

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Car buffs descend on Arizona for biggest classic motor auction

The Ford Thunderbird famously launched into the Grand Canyon in Oscar-winning 1991 film "Thelma and Louise" will be among more than 1,000 vehicles going under the hammer next week at the Barrett Jackson Auction, the world's largest annual sale of classic cars.

Around 250,000 car buffs will descend on Scottsdale, Arizona to peruse vehicles ranging from rare early 20th century vintage models to state-of-the-art 2009 cars that are not yet on sale to the general public.

The six-day auction beginning on Tuesday has been billed as the "The Greatest Car Show on Earth" and should raise tens of millions of dollars if recent auctions are any guide the 2007 show netted 112 million dollars.

Experts say that despite the woes gripping the US economy, the Barrett-Jackson sales should still do brisk business amongst bidders who are typically wealthy enthusiasts with money to burn.

"Every time the economy takes a downturn, the value of tangibles goes up," said Leslie Kendall, curator at the Petersen Automotive Museum in Los Angeles.

"Vehicles are tangibles that you can use and enjoy, theoretically, if you buy them for the right reasons, a lot of people treat them as investments, there's a lot of speculators out there that help the prices go up.

"You'll see a whole lot of people in their 50s and 60s. A lot of people who are as wealthy as they ever will be, right now, and they just want to reward themselves for having done well in life."

As well as the "Thelma and Louise" Thunderbird, which is signed by two of the movie's stars, Brad Pitt and Geena Davis, other notable lots up for grabs include an armor-plated presidential limousine from the Bill Clinton-era. Among the older model vehicles on sale are a vintage 1928 Duesenberg, the luxury vehicle of choice for members of the stars of Hollywood's golden age, and a customized Rolls Royce Phantom II from 1935.

The main focus of the Barrett-Jackson sales, however, will be US "muscle" cars of the 1960s and 1970s, high-performance street cars notable for their powerful V8 engines. Muscle car prices have risen dramatically over the past decade, with the entrance of "baby-boomers" into the market, hoping to buy the dream cars of their youth.

"There are lots of vehicles from our youth, and we recapture a bit of our youth, we get a bit of that old feeling back," said Kendall. "The cars are a great way to do it. The market for any quality old vehicle is going up."

Among lots expected to attract fierce bidding are a Ford Mustang modified towards the end of the 1960s by legendary US auto racing driver and engineer Carroll Shelby. Two cars owned by Shelby, a 1969 Mustang GT500 convertible and another GT500 given to his son in 1967, are expected to fetch records.

Other famous vehicles due to be auctioned are a stretch Hummer featured in 2006 film "Miami Vice" and a 1969 Dodge Charger known to viewers of 1980s television series "The Dukes of Hazzard" as The General Lee.

AFP