China Renewable Energy Industry Report: Jun. 7

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Jun. 7 – This is a regular series of relevant industry news from around China.

Hong Kong-based Renewable Energy Asia Group Ltd, or REA, has established a wholly owned unit in China to develop and run wind power systems, provide repair and testing services to the sector and distribute electric power related materials.

Renewable Energy Asia Power (Guazhou) Co Ltd has a paid-up capital of US$924,000. Its establishment is not expected to have an impact on REA’s net earnings per share and net tangible assets per share for the fiscal year to March 31, 2012.

Earlier this month REA completed the sale of its fastening business, which accounted for 78.4 percent of the company’s net asset value. The rest of the company’s activities include wind farm development and manufacturing of steel equipment for the wind power sector, as well as the provision of surface treatment services.

China remained number one globally in the latest quarterly Renewable Energy Country Attractiveness Indices of consultancy company Ernst & Young, preceding the United States.

The country scored 72 points out of a maximum of 100, up by a point from the previous quarter, thanks to its new five-year plan which includes increased focus on renewables.

China moved to the top of the chart in the summer of 2010, after the United States lagged behind due to the effects of the global downturn, falling gas prices and an uncertain medium-to-long term policy environment. The United States has a score of 67 now, while India surpassed Germany and took the third place.

In March, China released its new five-year plan aiming at an 11.4 percent share of non-fossils in primary energy consumption. In addition, energy used per dollar of economic output is planned to go down by 16 percent, while carbon emitted per dollar of economic output will be cut by 17 percent.

According to Ernst & Young, the March earthquake and subsequent nuclear crisis in Japan have also helped boost the popularity of the renewable energy sector, especially solar power. The disaster made China and Japan commit to an increased use of solar installations.

“The events in Japan will help move solar out of a niche technology corner and into the mainstream of power generation technologies,” Ben Warren, Ernst & Young’s environment and energy infrastructure advisory leader, said.

Chinese Huadian Power International Corp said on May 26 that it has received approval to build two wind power projects with a combined capacity of 147 megawatts.

The company will invest up to RMB460 million (US$71 million) in a 48-MW installation in Laizhou, eastern China.

The other approved project is a 99-MW wind farm that is being developed by Huadian’s affiliate Huadian Ningxia Ningdong Wind Power Co Ltd. Total investment in the project is seen at as much as RMB960 million. The company did not provide further details.

Chinese wind turbine major Sinovel Wind Group has developed a 6-MW wind turbine prototype, news agency Xinhua reported last week, citing vice-president Tao Gang.

The turbine is suitable for both onshore and offshore applications, as well as for use at inter-tidal wind farms. Before Sinovel’s announcement, Germany was the only country to develop a wind turbine of such a high capacity, Xinhua writes.

The need for wind turbines with bigger capacity is growing as many countries around the world, including France, the UK, the US and China, are looking for ways to utilize their offshore resources. Other sector firms from China have also been taken by the high-capacity fever, including Xiangtan Electrical Machinery Co Ltd, which in October 2010 came out with a 5-MW prototype.

The capacity of Sinovel’s 6-MW unit is bigger than that of any existing wind turbine. According to Tao, the production of such high-capacity units will significantly speed up the growth of China’s offshore wind power sector. Sinovel’s ambition is to push up the limit and develop a 10-MW wind turbine, Tao said.

Chinese wind turbine producer Sany Electric will commission a 10 MW demonstration wind farm in Texas on June 15, green energy news portal Recharge reported at the weekend, citing the project’s development manager, Stacy Rowles.

Rowles told the news outfit that the project, which includes five SE8720IIIE 2 MW Sany turbines, was in a pre-commissioning stage. The project will demonstrate the performance of this wind turbine model for potential US buyers.

Rowles did not disclose the cost of the project, which was financed by Sany. Sany will sell the wind farm’s electricity output to the market on a spot or short-term contract basis.

The Texas wind project will be the first U.S. farm for Sany, which already owns a US$60-million production plant in the U.S. state of Georgia.

Chinese firm Xuzhou Combustion Control Technology Co Ltd will acquire a 45 percent interest in four waste-to-energy facilities in eastern China for RMB148.5 million (US$22.9 million), news site Modern Express said.

The deal, struck with waste service provider Fujian Yinsen Group, involves four installations located in the provinces of Hebei, Shandong and Heilongjiang. According to the report, the annual investment return from the facilities working at full capacity is estimated at CNY 29 million.

U.S. fiber optical services provider Sino Fiber Communications Inc said on May 31 it had finalized the acquisition of a 60 percent stake in Chinese Dalian Xinbao Biomass Co Ltd for US$50.75 million in stock.

The company will issue to Dalian Xinbao Biomass nearly 230.7 million of its shares at a price of US$0.22 apiece.

Dalian Xinbao Biomass is a high-tech company active in the biomass energy sector. It has three patents covering an anaerobic combustion technology and six more related to designs for combustion equipment and biomass energy equipment. Among the company’s assets is a production plant in Jiangsu worth some US$90 million.

The deal comes after Sino Fiber acquired in April all of the stock of Chinese waste conversion specialist Torino Resources Ltd for US$69.35 million. Torino Resources uses microbial degradation to treat municipal waste. Via the process it makes organic fertilizer, biofuel blocks, plastic wood products and building materials.

Australia-based energy company Altona Energy Plc has struck a memorandum of understanding with Tongjiang International Energy Co Ltd to partner in the exploration of coal and biomass gasification projects in China. As part of the deal, the two companies will seek to produce clean energy and transportation fuels in the Asian country, Altona said in a statement.

Tongjiang, a Hong Kong private investment group, is Altona’s largest shareholder with a 20.9 percent stake. The investment group will identify suitable projects in China and later evaluate them together with Altona.

Solar module maker Canadian Solar Inc said on May 31 it would build a 600-MW wafer factory in the city of Suzhou, eastern China, together with local silicon wafer maker GCL-Poly Energy Holdings.

Canadian Solar and GCL-Poly’s unit Suzhou GCL Photovoltaic Technology Co Ltd will set up a 10/90 joint venture to develop the project. The wafer production facility will be designed in a way that allows its capacity to double to 1.2 GW in the future.

Total investment in the first phase of the joint project is estimated at US$77 million. Some 33.3 percent of the funding will come from registered capital, while the remaining 66.7 percent will be debt.

The Suzhou wafer factory will support Canadian Solar’s plan to significantly expand its capacity. By the middle of this year, the company seeks to bolster its solar cell capacity to 1.3 GW-1.4 GW and reach a 2-GW module lamination capacity. It is planning to establish another partnership to build a 600-MW solar cell production plant, in a bid to back its target of 2-GW internal solar cell capacity in the first quarter of 2012. Canadian Solar announced that it is well on the way to reach a 2-GW virtual vertical integration from wafer through cell and module in early 2012.

Chinese solar products maker Suntech Power Holdings Co Ltd said on June 1 it would roll out on the market a solar photovoltaic module with a conversion efficiency of as much as 15.2 percent. For comparison, the efficiency of conventional polycrystalline solar modules is 13 percent to 14 percent.

The company’s BlackPearl 250-W module includes 60 black square cells with minimal oxygen content, meaning that it has increased resistance to light-induced degradation. At cell level, the module’s conversion efficiency reaches 18 percent. In addition, the product is designed to endure all weather conditions including some 270 km/h (168 miles per hour) wind load and a snow load of around 55 kg (121 pounds) per sq m.

Suntech plans to start shipping the BlackPearl module to Europe this month. It will first present it at the Intersolar Exhibition running from June 8 to June 11 in Munich.

Wind power components supplier China Wind Systems Inc said last week it had secured a sample order from an international customer for equipment used for monocrystalline silicon wafers production.

Delivery is scheduled for August 2011 for inspection and approval by the customer, further details of which were not disclosed.

China Wind Systems expects that the market for subassemblies for monocrystalline wafer equipment can exceed that of multicrystalline units. It said that the price of monocrystalline equipment is nearly twice the selling price of multicrystalline equipment.

“With our strong clean energy sector focus combined with the stated policies of the PRC Government to encourage the use of clean energy, we expect increased contribution from our solar segment in the coming years,” Jianhua Wu, chairman and CEO of China Wind Systems, said.

Taiwan-based Teco Electric & Machinery Co Ltd has secured a US$105 million wind turbine order in Vietnam, Chinese newspaper the Commercial Times reported.

The heavy electrical equipment and electrical control products maker will supply 30 turbines, each of a 2-MW capacity, to Vietnamese company Binh Thuan. Delivery of the first 10 units is to be completed by the end of 2011.

China-based cast resin transformer maker Jinpan International Ltd said on June 1 it has secured some US$21.2 million in orders from companies in the renewable energy sector.

In May alone, the company got orders worth US$5.7 million for 119 units of wind energy transformers for a wind power project in the United States. All the units will be delivered in the third quarter of 2011.

In addition, between February and May, Jinpan got contracts of US$15.5 million for the supply of customized transformers for polysilicon production plants. The orders came from five Chinese customers and include a total of 92 units. Delivery is scheduled for the second half of this year.

“Our order flow in May reflects the rising demand for our wind products, particularly in the US. We also believe that June will represent another solid month of sales in this segment of our business,” said CEO Zhiyuan Li.

Spanish renewable energy company Gamesa inaugurated its fifth factory in China on June 1, the firm said in a press release. The facility, located in the city of Da’an in the northeastern Jilin Province, will initially have an annual capacity of 500 MW and will assemble 2 MW nacelles.

Gamesa has another four factories in China, all of them in the northern metropolis of Tianjin. Currently, the company is building two more factories, in Tianjin and in Inner Mongolia.

Gamesa entered the Chinese market over a decade ago. It has installed some 3,000 turbines at more than 60 sites there. China accounted for 28 percent of Gamesa’s revenue in 2010, according to the company.

U.S. photovoltaic equipment maker GT Solar International Inc has won a US$460.4 million order for its advanced sapphire crystallization furnaces from a Chinese customer new to the light-emitting diode sector.

The contract, the biggest single order in GT’s history, will be included in the order backlog for the first quarter ending July 2. The company said that the customer is a diversified manufacturing company, but did not provide further details.

By 2015, revenue for high brightness LED applications is seen to reach US$19 billion, according to a report by sector analyst Strategies Unlimited. General lighting applications are expected to bring some 25 percent of the total amount.

Chinese energy utility GD Power Development Co Ltd has reportedly agreed with Jilin Nuclear Power, a unit of China Guangdong Nuclear Power Corp, to jointly develop nuclear power installations.

The two companies will focus on Shanghai’s Songjiang district and the cities of Changchun and Liangjiashan in the province of Jilin, Shanghai Securities News reports. In addition, GD Power has set up a new department to cater for its wind and solar power and other clean energy operations.

At the end of 2010 the company had installed wind and hydropower capacity of 7.74 GW. Total capacity stood at 28.79 GW, with thermal power accounting for the better part of the figure.

U.S. oil and gas producer EGPI Firecreek Inc said that its unit Arctic Solar Engineering Inc was in talks to install two of its solar thermal systems in China as part of a clean energy initiative.

The solar thermal facilities will be installed under a test program, which is included in the Chinese government’s plan to replace its existing coal burning boiler system with more efficient and clean energy sources. The initiative is to involve 550,000 boilers.

In addition, Arctic Solar has initiated negotiations with a U.S. nano-coating technology company, seeking to bolster the efficiency of its solar thermal technology.

The Ministry of Economic Affairs (MOEA) of Taiwan said last week that Taiwan’s Industrial Technology Research Institute had invented a new solar cell technology to bolster conversion efficiency from 16 percent to 17.2 percent.

The metal wrap-through technology is a specialized structure for a multicrystalline solar cell that transfers the bus bars that are usually on the front side of the cell to its back. Thus, shading on the front is reduced, while the cell’s efficiency can go up by 1 percent-2 percent.

This new technology is expected to help domestic solar cell makers trim production expenses and boost their global sales. In 2010, solar cells manufactured in Taiwan reached a global market share of 14.1 percent, ranking second after China’s 46.4 percent, according to MOEA statistics.

Domestic solar cell makers Tainergy Tech Co Ltd and Kenmec Mechanical Engineering Co Ltd are to implement the new technology in their solar cell and photovoltaic module operations in 2012 the earliest.

This industry report brief is courtesy of AII Data Processing.

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