Ming Yang Expects Turbine Price to Rise as Rivals Shut Factories
China Ming Yang Wind Power Group Ltd. (MY), the country’s only turbine maker listed in the U.S., expects domestic equipment price to increase at least 5 percent in 2013 from a year earlier as competitors shut factories.
Prices of wind turbines with 1.5-megawatt to 2-megawatt capacity will average 4,000 yuan ($643) a kilowatt this year, Chief Executive Officer Zhang Chuanwei said in a phone interview yesterday. This compared with 3,850 yuan in the fourth quarter for machines with double-fed induction generators, in which Ming Yang specializes, according to Bloomberg New Energy Finance data.
“The market has become concentrated after a number of turbine manufacturers closed down or suspended production due to uncompetitive products,” said Zhang. “Developers are choosing products with higher power-generation capability and lower cost per kilowatt-hour rather than those with the cheapest prices.”
The growth of China’s wind-power industry slowed after the government tightened approvals of projects starting in 2011 to ease grid congestion, forcing some manufacturers out of business. Installations in 2012 may have fallen 20 percent to 16.4 gigawatts, according to Bloomberg New Energy Finance.
China’s 10 largest producers, led by Xinjiang Goldwind Science & Technology Co. (2208), are turning to new business models and specialization to add value and survive the downturn. The companies accounted for about 75 percent of installation demand in the country last year, said Demi Zhu, a Beijing-based analyst at BNEF. Ming Yang is the fourth-biggest wind turbine manufacturer in China.
“China’s wind industry is undergoing an extensive restructuring with many small equipment suppliers getting eliminated,” Zhu said “Small producers are forced to quit the market due to insufficient technological expertise and poor after-sales service.”
Zhongshan-based Ming Yang expects to deliver 2.5 gigawatts of wind-power equipment in 2013, including overseas markets, Zhang said. The company, whose shares has risen 21 percent this year in New York trading, will provide engineering, procurement and construction services for wind farms abroad, mainly in India and eastern Europe, with a combined capacity of about 400 megawatts this year.
Ming Yang will complete 300 megawatts of projects with India’s Reliance Power Ltd. (RPWR) in 2013. The two companies plan to install 2.5 gigawatts of generation capacity over three years with financing support from China Development Bank Corp., Zhang said.
Ming Yang also plans to supply machines to two offshore wind power projects this year, each with 200 megawatts of capacity, off China’s southern Guangdong province.
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