Chinese energy giant talks up $13bn wind farm plans

Longyuan Power Group, already China's biggest wind power producer, is reportedly planning to invest around 92 billion yuan (£8.9bn) on developing clean energy over the next five years.

Speaking in an interview with news agency Bloomberg yesterday, company president Xie Changjun said the Hong Kong-listed company aims to install at least 16GW of wind turbines in China and overseas by 2015.

"China so far has used only about one per cent of its total estimated wind power resources and there is vast potential for future growth," he said, adding that the company was also investigating opportunities overseas in South Africa, the US, Australia and Europe.

In December, Longyuan raised HK$16.7bn (£1.5bn) in the world's third largest initial public offering by a renewable energy firm, and Xie said the company is also considering selling bonds domestically to raise further funds.

The firm is the fifth largest producer of wind power capacity globally and plans to take third place by 2012. The company boasted 4.5GW last year and hopes to have 6.5GW by the end of this year, it said in March.

The company's expansion plans are likely to be supported by the expected introduction of new legislation that will introduce a feed-in tariff for wind power and set a target for 15 per cent of the country's energy to be generated from low carbon sources by 2015.

The new legislation is expected to be adopted from July and Chinese wind turbine manufacturers are now expanding rapidly to meet the anticipated increase in demand. Xie said an expansion in production capacity would bring down installation costs by 10 per cent by the end of the year.

The firm almost exclusively uses Chinese suppliers – chiefly Xinjiang Goldwind Science & Technology and Sinovel Wind Group – whose prices are about 20 per cent less than those of their overseas rivals.

Xie offered a stark warning to those foreign turbine manufacturers trying to break into the market noting that if they "want to boost their market share in China,
they need to cut costs and reduce prices".

Xie added he hopes to see carbon markets set up in China after 2012 to
further boost renewables. Small regional and city-based carbon trading schemes already exist in China and the government is looking to expand such initiatives, though there is no plan for a national scheme in the forthcoming energy legislation, according to the China Daily.

The latest developments follow a series of announcements from Longyuan underlining its ambitious expansion plans. earlier this year the company said it planned to build 1.74GW of solar projects over the next few years, with solar eventually accounting for more than a quarter of the firm's total generation capacity, while in March last year the firm unveiled plans to build both its first large-scale solar array and a geothermal project in central Tibet.