Foreign Investment Restrictions on Wind Power Relaxed

Posted by Reading Time: < 1 minute

Jan. 13 – China has relaxed long-standing restrictions placed on foreign wind farm developers by doing away with the rule that requires 70 percent of components to be sourced locally.

The development is good news for long-term China players GE and Vestas. The rule had been designed to encourage investment in China manufactured components for the technology, however local manufacturers have consistently not been able to meet the quality controls demanded.

It also placed foreign investors at a disadvantage against local companies as they were unable to import and supply their own components above a 30 percent threshold.

China is the worlds third largest producer of wind power with large wind farms in Inner Mongolia and Xinjiang. Beijing wants to quadruple the amount of energy produced by wind power by 2020 and has shifted its policy from prevention of imported components to full permission to import as it needs to purchase equipment to achieve its wind energy goals. China’s current wind energy generation is about 20,000 megawatts.