RI Wind Power vs China Wind Power

As Rhode Island plans to develop its off shore wind resource, there is hopeful speculation about the industrial and manufacturing jobs that will be required to build and support the off shore wind farms. But before we get too excited about it, let's look at our competition. Not Massachusetts, but China. What lessons can we learn from the Chinese and where are the opportunities we can exploit give this knowledge. The article quoted below is a place to start.

Challenges with China's Wind Energy

Robert Hsu, February 23, 2010

China has been trying very hard to step up and take action to not only clean up its air and water pollution but also to prevent further pollution in the country. And as the Chinese government focuses on more of these green technology initiatives, many Chinese companies stand to benefit directly.

One industry, in particular, that is already reaping the rewards of a government focus on clean tech energy is wind power. In fact, China has become a powerhouse in wind power.

When China first started making wind turbine blades, the demand was low and the blade length was set at 37.5 meters. Two years later, the industry boomed and the once-popular 37.5-meter blades were no longer desired. Since so many companies hurried into the industry, there was a lack of research and planning; the main thing affected -- quality. The blades that were initially created were not long enough to generate anticipated electricity levels.

So producers scrambled and started manufacturing a 40.3-meter blade. With that, production rates increased, and the number of wind turbine makers grew from six to more than 70 in the country. As a result, China quickly became the third-largest wind power market in the world last year increasing the installed wind power capacity from 760 megawatts (MW) in 2004, to more than 20,000 MW in 2009.

However, 70% of the blades currently being used are still the shorter length, meaning they are not helping the environment, as they should. This poses a huge problem because there is now a surplus of products that don't fit the market. And prices have decreased even though there is an increase in demand.

This recent development further reiterates my reason for largely avoided investing in this sector. Now, with that said, renewable energy continues to receive strong support from the Chinese government even as investments in the sector declined sharply with the rest of the world during the past two years, and given China's new focus on green technology, green investing is an important investment theme for investors.

Right now, most forms of renewable energy -- such as solar and wind power -- are not economically self sustainable and rely on government subsidy to survive. And most renewable energy companies are also losing money with excess capacity problems.

So there may be investments in the solar or wind industry down the road, but for now, I think our renewable energy investments are better served in another part of the green tech industry.

Hopefully, those planning for the development of a wind power industry in Rhode Island will learn from China's problems and develop clear and focused marketing plans taking into account the real needs of their target markets.