The news cycle for China's wind sector may finally have turned, according to the new China Wind Market Quarterly report by GTM Research and Azure International. The final month of 2012 and first weeks of 2013 brought a flurry of government announcements with major near-term implications. In December, the government took steps to resolve financing issues in the sector by redistributing surcharge revenues and pre-appropriating funds for 2013. And, in January two separate announcements raised targets for wind and solar installations in 2013, setting an overall target of 49GW of renewable capacity additions in 2013, of which 18GW will be wind.
The government appears to be back in the game of promoting the domestic renewable energy market, with policy in China beginning to act as a counterweight to foreign forces that have hurt the wind and solar sectors. According to the new report, this implies that more announcements may be on the way for wind. One near-term possibility is improved financing. How will all the new solar be financed, given the problems distributing renewable surcharges? Most likely, the state banking sector will play a major role, and this could bring new cash to the balance sheets of Chinese wind firms—which would in turn filter down to OEMs and component suppliers.
"China's wind industry retains its leadership position worldwide, whether looking at policy targets, overall installation numbers or innovation," says Anders Hove, one of the report's authors. "Fully understanding the world's largest wind energy market requires an in-depth understanding of complex issues, and that's why this report is timely. We need to understand the reasons for interconnection delays, develop an expectation for future curtailment, and look province by province at the cash flow issues created by slow disbursement of renewable energy surcharge funds."