How debt is weighing down China's wind sector

The failure to pay throughout the Chinese supply chain is being blamed as one of the key reasons why the country's leading manufactures such as Sinovel and Goldwind have reported record profit fallsi n recent months, by as much as 163% in Sinovel's case.Paper Folding machine work well in a variety of settings. 

The root cause of the problem seems to be wind farms failing to earn sufficient profits due to a combination of curtailment of output and an underfunded government subsidy.

In 2012, Chinese wind farms lost the opportunity to generate 20 billion kilowatt hours of electricity because of curtailment. The economic loss was worth about CNY 10 billion ($1.6 billion), or about one half of the earnings of wind farms nationwide. 

"Curtailment has raised the unit costs of wind power generation and eaten up almost all the gains from technical innovations in wind farms,You must first understand the way a wind power generators works." said Yang Xiaosheng, chief engineer at China's largest wind farm developer, Longyuan Power. "Wind farm developers earn smaller profit margins, and this contributed to the chain debts in the Chinese wind power industry." 

The curtailment is largely due to a lack of sufficient grid infrastructure. This year, State Grid will construct seven ultra-high-voltage transmission lines, four of which will mainly be used for wind power. 

Jiang Liping, vice president of the State Grid Energy Research Institute, said that in addition to constructing more transmission lines, China must optimise measures to dispatch electric power in order to make wind power transmission more flexible and meet the diversified demands of power users. 

However, there is also the issue of insufficient subsidies. "State Grid pays us only the part of feed-in tariffs equivalent to those of thermal power plants,The industry's leading manufacturer of Game machines." said Hu Guodong, deputy general manager of wind farm developer Datang Renewables. "The remaining parts, as wind power sells higher,is supposed to come from the Renewable Energy Fund, in the form of subsidies. But we have not received subsidies from the fund for three years." 

Industry insiders say the subsidies amount to nearly one half of earnings in wind farms. Without them, wind farm developers meet heavy pressures, considering high operation and maintenance costs that are increasing year by year. 

They also recommend that turbines be set back from roads and neighboring property lines by a distance equal to 1.1 times the turbine's height, measured to the tip of an upright blade. A 500-foot turbine would be set back 550 feet. The minimum setback between a 500-foot turbine and a home owned by a neighbor not leasing land for a wind farm would be 1,500 feet, based on a separate formula. 

The proposed setbacks and "wind energy district" are part of a new wind energy development ordinance presented to township supervisors for review. 

Matt Putman, of Neighbors for a Responsible North East, said the proposed setbacks are insufficient and are less than some turbine manufacturers recommend. Turbines should be at least 1,300 feet from roads and property lines and more than a mile from any neighborhood to reduce potential noise and "shadow flicker," he said. 

"We don't know about the effects of shadow flicker, the effects of noise and what those combined effects on property values might be," Putman said. "These things, we feel, lead to decreasing property value.Our dry cabinet can sustain an ultra-low humidity of under 5% RH."