China Renewable Energy Industry Report: May 19

Posted by Reading Time: 8 minutes

May 19 – This is a regular series of relevant industry news from around China.

•China is to install 15 million kilowatts of hydropower capacity in rural areas by 2015, Chinese Xinhua news agency reported earlier this month, citing the country’s Water Resources Minister Chen Lei.

The expected new installations would bring the country’s total installed rural hydropower capacity to 74 million kilowatts, the minister said at a rural hydropower construction conference in southwestern China.

Small hydropower plants with up to 50,000 kilowatt capacity are fit for rural hydropower, according to Xinhua.

Tian Zhongxing, chef of the department of water and power under the Water Resources Ministry, said that rural hydropower was suitable for development and local electricity supplies, as it did not need large waterways and resident relocation.

At present, small hydropower projects cover more than half of China’s territory and supply electricity to 300 million homes, Tian said.

•The net profit of Chinese polysilicon producer Daqo New Energy Corp soared to US$35 million in the first quarter of 2011 from US$ 6.4 million in the same period of last year, the company announced on May 9.

The result was helped by controlled production cost and favorable polysilicon pricing conditions, CEO Gongda Yao said.

Operating profit increased to US$43.5 million from US$10.6 million a year earlier as operating expenses declined, and operating margin improved to 49.8 percent from 23.5 percent.

Revenue grew 93.6 percent year-on-year to US$87.3 million, mainly driven by increased polysilicon sales to US$77.7 million from US$42.3 million as sales volume grew to 1,089 tons from 815 tons a year ago and average selling price rose, too.

•Chinese photovoltaic panel producer Suntech has started a Europe-wide marketing campaign with the motto “Imagine,” directed at both the professional photovoltaic market and at consumers.

The campaign has already been launched online and will be expanded to include specialized magazines, national daily newspapers, TV and other media. Suntech will center its campaign around facts on its business, such as the CO2 emissions saved thanks to its products or the efficiency improvement of its modules.

Suntech will try to show which visions it has already turned into reality, European sales and marketing vice president, Vedat Guergeli, said.

•U.S. solar microinverters-maker SolarBridge Technologies said on May 9 it had entered volume production of its Pantheon microinverter with Canadian electronics-maker Celestica Inc in Dongguan, China.

SolarBridge has opened an office in Shenzen in southern China’s Guangdong Province to support manufacturing and operations.

The company expects production capacity for the Pantheon to increase to over 70 megawatts by the end of 2011. It did not disclose the current capacity of the microinverter.

•After over 2,000 wind turbines were disconnected from the power grid in the past few months due to incidents, China’s electricity regulator urged wind farm operators to upgrade their turbines so they are low-voltage ride through (LVRT) capable.

Two major incidents took place on April 17 when 702 wind turbines were disconnected from the grid in the Gansu Province city of Jiuquan and a further 644 units got disconnected in the city of Zhangjiakou in Hebei Province. The State Electricity Regulatory Commission (SERC) gave voltage dips as the reason which were a result of box transformer malfunction. The accidents led to a 54 percent drop in wind power output in Jiuquan and a 48.5 percent decline in Zhangjiakou.

In February, a similar event caused the disconnection of 598 wind turbines in Jiuquan.

According to the SERC, most of the installed wind power equipment in China does not include the LVRT technology. In the first half of 2011 a new national standard for integrating wind power plants into China’s power grid will be finalized and it will for sure require that turbines are LVRT-capable. Existing installations will also be obliged to make upgrades, though no timeframe has been provided yet.

•Seeking to bolster its hydropower capacity by 10 gigawatts, Chinese Huadian Power International Corp intends to develop four new hydropower projects throughout China in the coming five years, China Daily writes.

By 2015 the company targets installed hydropower capacity of 26 gigawatts, which would then equal 8 percent of the country’s total. As part of the initial project, Huadian plans to build new installations on the Wujiang and Nujiang rivers, as well as the upper and middle stretches of the Jinshajiang river.

According to media reports, Huadian’s installed hydropower capacity at the end of 2010 stood at 15.38 gigawatts. This is equal to 7.3 percent of China’s hydropower capacity and 17 percent of Huadian’s energy mix. In 2010, the company’s hydroelectric units generated 1.21 million MWh.

Huadian operates thermal electric, hydropower and wind power plants in China.

•U.S. solar module maker First Solar and China Power International Energy Holding Ltd, a unit of China Power New Energy Development Co, agreed on May 10 to team up on solar photovoltaic projects.

Under a strategic cooperation framework agreement, the partners will collaborate in the United States, China and other international markets, they said in a joint statement.

Initially, the companies will explore collaboration on solar photovoltaic projects in China and seek investment opportunities for China Power International Energy in the United States and other global markets. The partners will also take advantage of CPINE’s plans for 2 gigawatts of solar power projects in China by 2020 and First Solar’s 2.4 gigawatts project pipeline in North America.

First Solar said the agreement would help it enhance its position in China.

•U.S. photovoltaic equipment maker GT Solar International Inc said on May 10 it had won three orders to supply advanced sapphire crystallization furnaces in Asia for a total of US$91 million.

Two of the orders have been placed by Taiwanese customers including light-emitting diode wafer maker Tera Xtal Technology Corp, which last week clinched a sapphire crystal purchase deal with GT Solar, and sapphire crystal product maker Alpha Crystal Technology.

The third supply contract has been awarded by Chinese Lingyang Group.

•Chinese solar products maker JinkoSolar Holding Co Ltd plans to repurchase up to US$30 million of its ordinary shares within 12 months.

Purchases will be made on the open market at prevailing market prices, the company said on May 10.

JinkoSolar also said separately it plans to issue US$125 million in convertible senior notes due in 2016.

•Construction company China Gezhouba Group will pour US$1 billion into the development of a hydropower plant in Indonesia, the China Daily said, citing a source that is participating in the project.

The move is in line with the company’s strategy to enhance its presence in the Indonesian utility industry.

According to the report, Gezhouba has signed the project agreement with state-controlled power monopoly PT Perusahaan Listrik Negara. The hydroelectric station will be built in Karama on Sulawesi Island, with construction to commence in 2012. The source said that the project is to be completed by 2017, without providing any details on the planned capacity.

Indonesia aims to scale down by 2020 its carbon dioxide emission by 26 percent on 2005 levels. To do so, the country is trying to speed up the development of clean energy projects, such as hydroelectric plants. China Daily writes that a lot of Chinese companies have taken advantage of the situation and are now developing power plants in Indonesia.

•Malaysian TS Solar Energy Sdn Bhd has inked a deal to distribute products of China’s Himin Solar Corp Ltd, Malaysian news agency Bernama said on May 12.

Under the partnership agreement, the Malaysian firm will distribute Himin Solar’s clean energy products, including photovoltaic and solar water heaters.

TS Solar will also provide project consultation and design services to parties seeking solutions for large amounts of hot water.

•Wind farm developer and operator China Longyuan Power Group Corp announced last week the completion of a 200-megawatt wind power project of low wind speed in eastern China’s Anhui Province.

The Lai’an wind power plant, touted as the first large wind farm of its kind in China, includes 132 units of 1.5-megawatt low wind speed turbines with extra-long blades. It is estimated to produce 390 million kWh of power a year, offsetting 410,000 tons of carbon dioxide and 1,496 tons of sulfur dioxide emissions.

The plant is located in the northern part of Lai’an county. Construction kicked off in March 12, 2010 and included four phases.

•Wind farm developer and operator China Longyuan Power Group Corp last week struck a strategic cooperation agreement with Chuzhou city and promises to install 1 gigawatt of wind power in the area in three years.

The company said it would seek a wider and deeper cooperation with the eastern Chinese city as part of the agreement, focused on the development of new energy resources. Chuzhou mayor Yuan Hua urged all cities and districts in the region to provide their support to China Longyuan’s local ventures.

•U.S. photovoltaic equipment maker GT Solar International Inc on Monday said it has received supply contracts for multicrystalline growth furnaces for a total amount of US$84.3 million.

The orders have been placed by new and existing customers. The new customers include Chinese Nantong Zongyi New Material Co Ltd and Inner Mongolia Zhong Huan Solar Material Co Ltd, GT Solar said.

GT Solar will book the orders in its backlog for its current quarter to June 2.

The company added that it further develops its advanced crystallization growth technology. Besides the advancements in its DSS system architecture, it has also reached record cell efficiencies on monocast silicon material growth in its advanced ingot casting furnace, which has been demonstrated by researchers at the Georgia Institute of Technology. The technology can lower the cost per watt of material produced, according to GT Solar.

•China Three Gorges Corp said last Friday that its Pakistan-based subsidiary had awarded an engineering, procurement and construction deal for a 49.5-megawatt wind farm in Thatta, southern Pakistan, to two Chinese companies.

Under the deal, the contractors – China Huashui Development Corp and China International Water & Electric Corp – will supply and install wind turbines manufactured by Xinjiang Goldwind Science & Technology.

The wind farm in Thatta is being developed in line with a memorandum of understanding signed by China Three Gorges Corp and Pakistan in December 2010. The agreement foresees the development of wind power projects with a combined capacity of 2 gigawatts and 300 megawatts of solar plants in Pakistan.

Aiming to meet rising power demand, the country plans to add 6,000 megawatts in hydro capacity and 2,000 megawatts in capacity from other renewable energy sources by 2020.

•Wind power components supplier China Wind Systems Inc on May 17 said its first-quarter net profit grew 37 percent on the year to US$2.7 million. Diluted earnings per share increased to US$0.10 from US$0.08.

Operating profit went up 24.1 percent to US$3.6 million, as operating expenses declined 38.5 percent to US$900,000. The gross margin decreased to 25.9 percent from 26.2 percent mainly due to a rise in costs of raw materials and labor.

Revenue rose 4.3 percent to US$17.6 million, driven by 13.2 percent growth in forged products sales to US$13.4 million. Forged product sales to the wind power sector increased 46.5 percent to US$10.2 million. Sales in the dyeing and finishing equipment segment decreased.

The company plans to buy new manufacturing equipment to expand efficiency and boost production of its solar segment.

•Chinese solar photovoltaic products maker Trina Solar Ltd said on Tuesday it has won a supply deal for 130 megawatts of solar modules from German renewable projects developer Mohring Energie GmbH.

Delivery is scheduled for the second and third quarter at agreed prices in U.S. dollars, Trina Solar said, adding that it has already started shipments.

Mohring Energie is expected to use the modules in several photovoltaic projects during the year.

•Chinese solar photovoltaic products maker Trina Solar Ltd said on Tuesday it expected photovoltaic module shipments of 430 megawatts to 450 megawatts in the second quarter of 2011.

Gross margin related to the in-house wafer production to module production is seen at the mid-20s in percentage terms, while consolidated gross margin is projected in the low 20s.

The company confirmed its full-year guidance, according to which photovoltaic module shipments in 2011 are to jump by 65.6 percent to 70.3 percent in annual terms reaching 1.75 gigawatts to 1.80 gigawatts.

During the first quarter of the year, Trina’s net profit grew to US$47.7 million from US$44.5 million a year ago.

Gross margin declined to 27.5 percent from 30.9 percent. Gross margin at the in-house wafer production to module production was 32.2 percent.

First-quarter revenue went up by 63.5 percent on the year to US$550.9 million. Total shipments nearly doubled to 320.4 megawatts from 192.6 megawatts.

To meet the growing demand, Trina said it was to expand in-house ingot and wafer production capacity to 1.2 gigawatts in the second quarter from 750 megawatts at present. Photovoltaic cell and module capacity is also planned to go up to 1.9 gigawatts from the current 1.6 gigawatts.

•Chinese solar panels maker Suntech Power Holdings said on Tuesday it had launched a third working shift at its factory in Goodyear, Arizona to meet growing demand.

Thanks to the move, the facility will now operate for 24 hours a day with 107 employees. Its capacity expands from 30 megawatts to 50 megawatts, or some 15,000 solar panels a month. The company intends to have 150 workers by the end of this year, while in a few years, it targets an annual capacity of 120 megawatts.

The Chinese company started the Arizona production line last October. The plant makes Suntech’s 280-watt solar panels, generally used for commercial and utility-scale power projects. The product has a 25-year warranty and is compliant with American Recovery and Reinvestment Act (ARRA) and Buy American Act projects.

This industry report brief is courtesy of AII Data Processing.