China appeared multiple times in the world’s most polluted places study released last week, and is renowned for smoggy cities and facemasks. But according to executives of major wind turbine maker Vestas, China is also set to become the world’s top wind power market within 3 to 5 years.

In China to open the second and third of seven plants by the first quarter of 2008, Vestas Chief Executive Ditlev Engel said he was certain that the company would be able to compete with cheaper rivals for the wind market in China.

"There are many firms in China trying to get involved in the business but our experience from around the world is that it is not as easy as it looks," he said in a group interview.

With 20 years of experience — the life of the wind turbine power plant — Vestas is competing in a market that is drawing a multitude of companies. Their $80 million investment in to the Chinese power market is expected also to bring Vestas a new export market.

"China will keep growing now, as a very important part of the wind power business, not just on the sales side but also on the sourcing," Engel said.

China has recently come under the spotlight of world conservation groups, with its number 2 spot oil consumption, and its number 1 spot in coal production making them one of the most polluted countries.

Recent studies in Norway have also shown that pollutants from China’s coal factories make their way to the remote mountains in the Arctic Circle

So Beijing is naturally keen to reverse some of the bad publicity. They have initiated plans to boost the amount of energy it gets from renewable energy sources, such as wind power. They’ve set a target to create 30 gigawatts of power by 2020, but analysts believe that they should be able to increase that target, as they are already nearing their 2010 goal.

However, analysts believe that China is crippling the advance of wind power by using a bidding system that asks firms how much they would charge for wind power from potential sites. This, according to analysts, pushes the price too low, and slows down the development that China could enjoy.

What they would prefer to see is a feed-in tariff system which, as defined by the European Environment Agency, is "the price per unit of electricity that a utility or supplier has to pay for renewable electricity from private generators. The government regulates the tariff rate."

"It is an issue we are also pushing whenever we have the chance of discussing it with authorities," said Vestas’ China Managing Director Lars Andersen. "We think one way to create a very sustainable industry is to have a feed-in tariff system."

Another problem being faced by companies such as Vestas is the lack of proper roads, and a dying grid network across areas which would be potentially good locations for wind farms.

Vestas is still confident, though, that their 20 years experience in the field of wind technology, and dealing with problems that they believe other companies will not have yet encountered, will give them the edge.

"The most important issue for our clients over a 20-year period, which is the lifetime of the turbine, is reliability," Engel said.

When asked how long it would take for China to be at the top of the market, Engel was confident: "Within three to five years, we estimate."

ENN - China Could Be Top Wind Market In 3 Years

European Environment Agency

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