China: Wind Power for 1.3B People

by: Kelvin Schulle October 15, 2008 | about stocks: APWR / GCTAF.PK / GE / VWDRY.PK    

Kelvin Schulle

About this author:
Become a Contributor Submit an Article
  • Font Size:
  • Print

In a recent trip to China, I experienced the “China Speed” in developing their new mega cities all over the country. The magnitude is beyond my imagination. Anything in this country is “big”. 1.3B population, yes it is a “B”, and let me tell you this, the population of children under age 10 is the same as the whole population of Canada: 40 Million. The China’s biggest city Shanghai is twice the size of New York. The high speed train of Shanghai is two times faster than US, that is half the speed of an airplane.

Then you will ask, where does China get all the energy it needs? The answer is simple, China does not have enough energy to sustain such a magnitude of growth, and it imports crude from every single corner of the earth. And it is planning big for its next generation of energy: Wind power.

According to the Global Wind Energy Council, China’s installed wind energy capacity could reach 122GW by 2020. China’s exploitable wind resource is estimated around 1000GW. In Inner Mongolia of Northern China, massive wind projects have been deployed over the last couple of years, the estimated capacity has reached over 1GW. In West China, provinces such as Gansu, and Qinghai, are also developing their own wind power projects to meet local energy demand. The central government has chosen wind power as an important alternative energy to combat green house emission and secure energy supply.

The wind energy booming in China has attracted many worldwide wind turbine manufacturers invest in China, such as GE (GE), Gamesa (GCTAF.PK) and Vestas (VWDRY.PK). There are also many domestic manufacturers including A Power Energy Generation (APWR), Nantong CASC, REpower North, Nordex, Hunan Hara XEMC Windpower. Among these companies, only GE, Vestas, and APWR are listed in North America, and recently APWR signed 50 of 2.7MW wind turbine contract, and has total annual production capacity of 1.1GW by 2009.

Related Articles

This article has 11 comments:

  •  
    Oct 15 08:02 AM
    China Wind Systems (CWSI.OB) is a great way to play the China wind expansion. It is a small profitable company that is transitioning from making textile machines to wind turbine components. They currently make rolled rings. In the future they will expand into gearboxes. Wind energy component suppliers is the best sector of wind energy to invest in, particularly in China.
    Reply | Link to Comment
  •  
    Oct 15 12:10 PM
    They need wind; it is unlikely nations will continue to allow them to suck up so much petroleum.
    Reply | Link to Comment
  •  
    Oct 15 12:50 PM
    I am interested in APWR but there are some lingering doubts about their legitimacy. I think they look good on paper but I'd like to see some actual deals go through and some big name analysts covering them.
    Reply | Link to Comment
  •  
    Oct 15 01:56 PM
    How do you feel the high turn-over rate of Chinese manufactures will play in this technology? China is renown for producing fake counterfeit products or selling products at very low margins, as well as extremely fast replacement of old technology with new ones… the list would go on, but to protect your investment you need long-term contracts, in my opinion.
    Reply | Link to Comment
  •  
    Oct 15 05:42 PM
    Another one to look at is Kaydon (KDN) with regards to wind power. They make a lot of the giant bearings that goes into wind turbines.
    Reply | Link to Comment
  •  
    Oct 16 02:59 AM
    Wind will play a useful but minor role in the Chinese energy picture. Nuclear and coal will be the main inputs. Just stop and think for a moment: wouldn't that be true if you were in their place? And since you arn't in their place, try suggesting that it would be nice if that coal was 'clean' coal.
    Reply | Link to Comment
  •  
    Oct 16 10:59 AM
    Nice to-the-point article. Well written and good info. Thank you,
    Reply | Link to Comment
  •  
    Oct 17 12:42 AM
    I understand and share some of your skepticism about APWR but that is priced into the stock right now. I've researched it as much as I can and come to the conclusion they are legit. I don't think they would have distribution agreements with Fuhrlander AG if they weren't serious about the wind business. Fuhrlander is also training APWR staff. So if you believe Fuhrlander is legit you can take some comfort in the fact they are working with APWR. They also have deals with Norwin A/S You can see the press release on their website. With Apower's subsidiary GaoKe www.norwin.dk/ check May 2007.
    Reply | Link to Comment
  •  
    Oct 17 08:53 AM
    Sorry this is the link. Company News

    www.norwin.dk/NORWIN_N...
    Reply | Link to Comment
  •  
    Oct 18 02:58 PM
    Another wind power play in China is Jinpan International, a high-tech and profitable producer of power transformers that is moving into windmill transformers, a fast-growing part of this fast-growing business that opened a new plant which increased its capacity by 50 this year.

    It was recently named to Forbes List of 'Asia's Best 200 Under A Billion for the second year in a row. Current P/E about 9.

    Disclosure: I'm long Jinpan (NASDAQ:JST)

    Reply | Link to Comment
  •  
    Oct 18 02:58 PM
    Another wind power play in China is Jinpan International, a high-tech and profitable producer of power transformers that is moving into windmill transformers, a fast-growing part of this fast-growing business that opened a new plant which increased its capacity by 50 this year.

    It was recently named to Forbes List of 'Asia's Best 200 Under A Billion for the second year in a row. Current P/E about 9.

    Disclosure: I'm long Jinpan (NASDAQ:JST)

    Reply | Link to Comment
More Comments on GE »
Top Rated Comment Streams:

Numbers are net rating-

See all Top 100 »
More by Kelvin Schulle

Investment Resources
Money Management
Research
Seeking Alpha provides these ads as a service to its leading contributors
Articles on related themes
China Energy
Alternative Energy
China Funds
China Healthcare