Vestas plans new inroads in Chinese wind market

Danish wind turbine manufacturer Vestas is strategizing to increase its market penetration in China, where it currently lags behind domestic producers.

The world’s biggest wind turbine maker plans to use more component contents from Chinese suppliers while also bringing models suited for varying wind conditions to the country.

Vestas will “look at much more tailored service offerings toward different customers with different needs,” Chief Executive Officer Anders Runevad said in an interview in Beijing.
Vestas V100
China is “a very attractive and interesting market” where the company sees a shift from focusing on initial capital costs to looking at the lifetime cost of energy, Runevad said, adding that Vestas will seek to use local manufacturers and suppliers for some component content.

Foreign wind turbine manufacturers only account for between 1 and 5 per cent of the Chinese market at the present time, with Vestas the 11th biggest supplier, behind ten domestic firms.

To make up the ground the Aarhus-based company plans to make its V110 and V100 models for low- and medium-wind sites at its Tianjin plant, Runevad said. The company will also closely monitor offshore market developments.

China’s wind market is facing a wave of consolidation that may cut the number of turbine producers by two-thirds in the next five years as oversupply pressures increase, according to the Chinese Wind Energy Equipment Association. Supply outstripped demand by 40 percent at the end of 2013, according to data compiled by Bloomberg.

China may install about 20 gigawatts of wind power this year and more in 2015, Bloomberg New Energy Finance estimates.

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