Vestas cuts ribbon on giant Chinese wind power plant

Vestas has unveiled what it claims is the world's largest integrated wind power production base – a 230,000 square metre facility in China costing $366m (£221m).

The Danish wind turbine producer launched the facility last week. Located in Tianjin province, it incorporates the production of turbine engine rooms, blades, generators, control systems and mechanical parts.

A supply and logistics center for internal wind turbine tower components is expected to start operations at a later date, said Vestas.

The production base enables the company to further localise its production and source control system components domestically, Vestas China president Lars Andersen told state-run newspaper China Daily.

Greater localisation in the supply chain may help Vestas win more supply contracts for domestic wind power projects, which are subject to a controversial "buy Chinese" mandate for equipment sourcing.

The launch of the facility comes ahead of an expected shakeout in China's increasingly crowded wind turbine industry. Analysts believe the sector is ripe for consolidation, with the country's 100 manufacturers having created overcapacity in the market.

While smaller local manufacturers are expected to be the most affected, overcapacity "will also affect foreign companies’ investment plans in China", Shi Pengfei, vice president of Chinese Wind Energy Association, told China Daily.

To slow the investment boom, China this week launched a round of policies that withholds approval for new financing in wind power equipment and five other industries, including polysilicon.

China has ordered banks not to finance projects in the six sectors if they failed to meet government guidelines. However, analysts believe it will have little effect, as provincial-level lenders will likely continue to provide funding to facilitate local business growth.