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China, the world's leading wind energy market, faces a number of obstacles, including constrained grid capacity, wind power curtailment, offshore wind project delays and a tough financing environment.

According to a new report from MAKE Consulting, these hurdles are expected to cause a 9% reduction in China's new installed wind power capacity this year (16 GW). However, these factors will likely be overcome by next year, with China forecasted to increase its installed capacity by 19% to 19 GW on the year, MAKE says.

As China focuses on closing the gap between installed and grid-connected capacity, the country’s grid-connected capacity is expected to rise from 17.5 GW to 22 GW by 2016, the firm adds.

According to MAKE, 2012 will prove to be a transitional year for the Chinese wind industry, as the government plans to increase project development in heavy load centers and expand wind transmission from wind bases to heavy load centers in an effort to balance wind resources and power consumption.

New developments will be located in fast-growing central regions of China that have denser populations, better grid infrastructure and higher power demand as compared to many of the existing wind bases, MAKE notes.

The shift to these new wind regions with Class III wind resources and different geographies necessitate new types of wind farms that are designed for low wind speeds, high altitudes, low temperatures and resistance to typhoon conditions. Although adapting to new wind segments will pose a technical challenge for developers, manufacturers and suppliers, it will also bring forth opportunities for new wind markets.

Nevertheless, China’s manufacturing industry is still challenged, with capacity across the supply chain, on average, 2.5 times that of expected 2012 demand, MAKE notes, adding that there are signs of consolidation and closures but they remain insufficient to close the overcapacity gap at present.

With the Chinese market maturing, Chinese companies are also rapidly expanding their overseas presence with the State Grid Corporation of China and Chinese independent power producers looking to internationalize. These efforts will support turbine exports, making 2012 a record-setting year, MAKE says, adding that the Chinese share of the international turbine market will be around 4%.



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