YATU, a developer of several types of wind turbine products, 15 of which have patents pending, said Monday it has agreed to begin negotiating a joint venture partnership with Welwind Energy International Corp. to manufacture and distribute wind turbines on an international level.
In regards to the Equipment Purchase Contract (EPC), the company will have all 66 turbines delivered to the Zhanjiang site before October 18, 2009. Unlike the majority of existing wind farms, Welwind will take possession of all 66 turbines without having to wait 2 – 4 years.
“We are thrilled to not only announce that we intend to have all 66 turbines delivered to our Zhanjiang project before the close of 2009, but are further pleased to be involved in negotiating a joint venture partnership for a stake in the turbine manufacturing sector. This news from our China Corporate Office takes Welwind to a whole new level in the alternative energy marketplace. Not only does the news of a potential Joint Venture allow for us to assist in supplying turbines to a much needed market; the EPC gives the company first priority in getting our projects expedited at an extraordinary pace” says Mr. Feng, Director of Welwind Energy.
Explosive growth in the demand for wind power has created a global waiting list for wind turbines. Chinese turbine companies may be part of the solution as they ramp up production and get ready to export. The world’s wind power industry is struggling to cope with rocketing demand due to rising oil prices, tougher emission laws and fear of climate change. Average lead time for delivery of turbines has increased from six months a year ago to anywhere between 24 and 36 months. German giant Siemens, which boasts 6,600 installations and a combined capacity of 6,080MW, recently disclosed that it had four year-backlog of orders for larger turbines.
It said that any new orders will not be delivered until 2012, causing a panic among the utilities companies, particularly in the UK where the government has ambitious targets for renewable energy. However, the supply crunch has not stopped the company from signing up new orders. So far this year, it has received $2.4 billion in orders from the US alone. In the US, an unstable regulatory regime is one factor hindering turbine production. Sporadic tax breaks for renewable energy projects, usually on a year-to-year basis, have discouraged US manufacturers from scaling up. Congress, for example, has stalled the extension of PTCs beyond the end of 2008.
In the past, when tax credits lapsed the demand for wind turbines came crashing down the following year. If the trend is repeated this time, it may actually result in overcapacity of turbine manufacturing in the US, at least for the domestic market. Yet energy analysts say that if the US market slows down due to lack of tax breaks, China will more than compensate.
In the short term, massive demand from China may further tighten turbine supply, but expanding local production should ease the global crunch within a couple of years. Today, the Chinese market is dominated by the top three foreign manufacturers, Vestas, GE Wind and Gamesa, who enjoy a combined market share of 47%. However, this is set to change. Zhang Guobao, vice president of China’s NDRC, says: “We are planning several measures to support the wind power industry including localisation of equipment production.”
To encourage production, China increased tariffs on imported wind turbines in May, while slashing import taxes on components. The latter incentive, to help Chinese firms compete internationally for scarce parts, will put pressure on the industry in the rest of the world. But, again, this is a short-term problem. Government rules already require that turbines have at least 70% domestically produced components. As a result, leading manufacturers have been setting up factories in China.
As things presently stand, most Chinese manufacturers can produce only smaller turbines, up to 1MW. Chinese firms are trying to overcome this weakness by licensing agreements and joint ventures with western companies. Goldwind, China’s largest wind turbine maker, raised $245 million through an Initial Public Offer (IPO) early this year to fund a huge expansion. LM Glassfiber of Denmark, which has a cooperation agreement with Goldwind, opened its second turbine blade factory in China in October last year.
ABOUT YATU
Guangzhou YATU Wind Energy Manufacturing Co Ltd is the developer of several types of wind turbine products. The company manufactures two series of wind turbine generator systems; a horizontal axis wind turbine and a vertical axis wind turbine.
YATU’s YT750(750kw)
ABOUT WELWIND
Welwind Energy International Corp. is committed to providing the best resource option available for renewable energy, protecting our environment, empowering communities, bolstering local economies and respecting the rights of future generations.
Welwind Energy International was founded to build, own and operate wind farms on an international scale. The company’s goal is to become a leading provider of clean energy products for the residential, business and governmental consumer.
This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements, which are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, risks set forth in documents filed by the company from time to time with the Securities and Exchange Commission. All such forward-looking statements, whether written or oral, and whether made by, or on behalf of, the Company, are expressly qualified by these cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.
Contact:
Welwind Energy International Corp.
tel: 604-460-8487
tf: 866-677-2272
info@welwind.com
www.welwind.com
