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08/27/2008 08:25 AM     print story email story  

China To Subsidize Wind Turbines News

China will begin subsidizing the production of wind power turbines, according to an announcement made last Friday.

The subsidy will only be available to Chinese majority-owned turbine manufacturers, who will be eligible to receive $88 per kilowatt for the first 50 units capable of generating at least 1.5 megawatts of power. In addition, the subsidy can only be used for research and development.

The subsidy should be shared equally between manufacturers of key parts and the companies that assemble the finished product, according to the ministry website.

This is the first Chinese subsidy specifically focusing on the wind power industry and it is meant to make Chinese companies more competitive with turbine makers like GE (NYSE: GE) in the U.S., Vestas Wind Systems (VWS.CO) in Denmark and India's Suzlon (SUZL.BO).

The subsidy is expected to boost the development of chinese turbine technology. Currently many of the nation's manufacturers license turbine technology from oversees.

The Chinese government has set an official goal of installing 30 gigawatts (GW) of wind power by 2020. Last year China had a total installed capacity of 5.9 GW. Analysts at Emergin Energy Research expect that the country will reach 11.1 GW this year.

A-Power Energy Generation Systems, Ltd. (NASDAQ: APWR), announced in July that it intends to build a new wind-turbine production facility in China with the capacity to produce approximately 800 megawatts (MW) of wind turbines each year.

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