Monday, May 17, 2010

Wind: General Electric and Vestas Struggle in China While American Supercondutor Powers Ahead (AMSC; GE; SI; VWS:Copenhagen)

AMSC is up another 5 1/2% at $30.96 in early pre-market trade.
A twofer from Bloomberg. First up a story from Friday:
GE, Vestas Fall Behind in China’s ‘Tough’ Wind Market
Western wind turbine manufacturers are losing ground in China, the world’s fastest-growing green energy market.

The combined market share for companies such as General Electric Co. and its European rivals Vestas Wind Systems A/S and Siemens AG fell to 14 percent last year from 71 percent in 2005, according to Bloomberg New Energy Finance. Sales are being eroded by local companies including Sinovel Wind Co. Ltd. and Xinjiang Goldwind Science & Technology Co. Ltd.

“It’s a tough market,” said Jesus Zaldua, president of Gamesa Corp. Tecnologica SA’s Chinese subsidiary, which has four wind-turbine factories in the northeast city of Tianjin. “Some companies will have to leave China in the next five years.”

To get back in the game, the foreign companies are introducing newer technology. Siemens, based in Munich, expects to open an $80 million plant this year in Shanghai that can build 3.6-megawatt turbines. That’s bigger than anything now made by a Chinese company.

Gamesa plans to build 2-megawatt turbines after retrofitting its existing plants. It will also open its fifth factory in China next year. The Spanish company’s machines cost a third more and are more reliable than Chinese models, according to Beijing-based renewable consultancy Mint Research.

“Competing on cost isn’t the way to go,” said Jens Tommerup, president of the Chinese business unit of Vestas, which is based in Denmark. “It’s about quality.”

Chinese Competition

Chinese manufacturers say they are improving their quality. Goldwind and Sinovel plan to introduce higher-output turbines next year.

“We already have 2.5-megawatt and 3-megawatt products” under development, Thomas Yao, Goldwind’s public relations director, said in a telephone interview. “We are going to produce some 2.5-megawatt (turbines), and they will be put into mass production early next year.”

The head start in technology may pay off for western companies, particularly as the Chinese venture abroad, said Keith Hays, global wind research director at Emerging Energy Research. Western bankers, who would finance the majority of projects outside of China, have more faith in U.S. and European turbine makers because of the companies’ experience, he said....MORE

And this morning's "American Superconductor Signs $445 Million Deal With Sinovel":

American Superconductor Corp. signed a $445 million contract to supply components to Chinese wind- turbine maker Sinovel Wind Group Co., helping cement the U.S. company’s position in the fastest-growing wind market.

The supplier, based in Devens, Massachusetts, will sell electrical devices for Sinovel’s 1.5-megawatt windmills for 30 months starting in early 2011, according to Greg Yurek, American Superconductor’s founder and chief executive officer.

“This contract will help us to continue to grow aggressively in China,” Yurek said in a phone interview. “If you want to be in wind, you have to be in China.”

Buoyed by $47 billion in stimulus spending for clean-energy projects, China installed more than twice the number of turbines in 2009 than in the previous year, Bloomberg New Energy Finance estimated. The country will add 18 gigawatts of capacity in 2010, equal to 15 new nuclear power plants, or double the wind turbines planned in the U.S., the second-largest market.

The contract extends an existing $450 million supply accord with Beijing-based Sinovel that will finish in the first half of 2011. The U.S. company made 70 percent of its 2009 revenue from the Chinese manufacturer, Barclays Capital has estimated.

Beijing-based Sinovel is China’s largest wind-turbine maker and ranks third worldwide behind Vestas Wind Systems A/S and General Electric Co. of the U.S., according to a 2009 report by Danish research firm Make Consulting....MORE


American Superconductor Overpriced, Going Higher (AMSC)

Dear General Electric, Siemens: American Superconductor to Begin Licensing 10 MW Wind Turbine this Year (AMSC; GE; SI)

American Superconductor: Upgraded to Buy at Jefferies, Wunderlich highlights Sinovel orders (AMSC)

Transmission Builders and Suppliers (ABB; AMSC; BGC; PWR)