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“Reducing pollution and addressing the long-term challenge of climate change has become a priority target. China took an important step toward these goals by forming the Asian-Pacific Partnership on Clean Development.”
INTERVIEW WITH LUCAS LIN, GENERAL MANAGER, SWANCOR (TIANJIN) WIND BLADE MATERIALS CO., LTD(Published on July-August 2007 - JEC Magazine #34)
JEC Composites Magazine: Which countries in Asia have the most dynamic energy policy?
Lucas Lin: The most dynamic countries are India, Japan and China. In India, the economy is soaring and the country is hungry for energy. Large private-sector groups have begun making major investments in wind power. The government is offering tax breaks and other incentives to encourage them. In Japan, the government promotes exchanges and mutual cooperation and fosters the use of new energy sources, especially in public places. In China, the government will change wind-power pricing to a fixed tariff system, so as to build a fair competitive environment that will serve the long-term development of the local wind-power industry. Wind power is a new industry which needs support, so a special funding and tax encouragement policy has been established. The Chinese government stipulates that wind-energy producers and equipment manufacturers should get together to meet the “70% domestic product” requirement whereby 70% of wind turbine parts must be built in China. In addition, the lure of China's huge but underexploited market, the government's drive for renewable energy and low production costs for exports to fast-growing markets in the United States and Europe have foreign and domestic firms rushing to set up wind farms or build production plants across the country.
JCM: What is the public opinion about environmental issues in the region?
L. L.: With the entry of China in the WTO, natural resources, the environment and sustainable development have become the focus of people's attention. As we come together to advance prosperity, we must also come together to ensure the health and safety of our citizens. As economies open up, they create new opportunities, but this openness also exposes us to new risks. While addressing these public-health challenges, we must also confront the challenge of energy security in a tight global market where demand is growing. Asian nations understand that the best way to create opportunities and alleviate poverty is through economic growth. But, as their economies grow, they are using more energy.
Reducing pollution and addressing the long-term challenge of climate change has become a priority target. China took an important step toward these goals by forming the Asian-Pacific Partnership on Clean Development. Together with Australia, India, Japan and South Korea, we will focus on practical ways to make the best practices and the latest energy technologies available to all.
JCM: In your opinion, what is driving the wind-energy market in Asia today?
L. L.: The Asian market has exceeded all estimations, thanks to unexpectedly strong growth, notably in China and India. Besides, Asian governments are paying high attention and support to the wind-energy market.
Asia will have the highest average annual growth rate (28.3%) over the 2007-2010 period. The total installed capacity should reach 29 GW at the end of 2010, up from 10.7 GW in 2006. With a predicted installed capacity of 8,000 MW over the period, India will continue to be the continental leader and the fourth country globally.
China will be a close second, with the highest growth rate and also a predicted installed capacity of 8,000 MW over the period. As of September 2006, there were 1,864 wind-power units in China, with an installed capacity of 1,266,000 kW. In 2006, the cumulative installed capacity grew by 65.6% year-on-year from 2005. The Chinese government’s initial target is for wind-power generation to reach 5,000 MW by 2010. By 2020, it aims for as much as 30,000 MW produced by wind alone.
On the other hand, wind power has great potential as a major form of alternative energy. Coal-fired power generation currently accounts for 75% of the Chinese electricity mix, causing major environmental problems. The massive uptake of renewable energies, such as wind energy, has become the world trend. So China has taken substantial measures to promote the commercial development of wind energy.
The domestic wind-power industry has reached more stability, which encouraged a larger number of audiences to invest in the wind-power sector, resulting in more cost-effective production and creating additional local employment. As regards wind-power equipment installed in China in 2006, foreign-invested enterprises still take the lion's share, with a market share of 70%. However, domestic wind-power-equipment manufacturers now have an edge in competing with foreign players.
JCM: Do you think Chinese manufacturers have the capacity to export?
L. L.: Yes they do! The total capacity of Chinese wind-blade manufacturers is much higher than the local demand and the cost of Chinese wind blades is much lower than those produced in North America or Europe.
With its entry in the WTO, China is increasingly integrated into the world economy and, coupled with its importance as an emerging regional and global power, its energy policy decisions will have increasingly significant impacts on the world energy situation.
Besides, the country’s population and resources are all pretty rich, so some countries which have no capacity to export are joining ventures in the Chinese wind-energy market or exporting their technology to local manufacturers in China.
On the other hand, China is a developing country, so raw material and labour costs are much lower than any European country. Recently, the export volumes increased heavily.
According to statistics released in September 2006, home-made wind-power equipment account for up to 22.7% in the total installed capacity of China, and foreign equipment 77.3%.
JCM: What is Swancor’s development strategy in this market?
L. L.: Swancor is the leading vinylester manufacturer in Asia and number four in the world. We offer our customers a full range of materials for their wind-power applications, including epoxy systems, vinylester and unsaturated polyester resins. All of our products are developed in house, so we can easily customise them to meet the special requests of our customers.
We are the first local resin producer to offer an epoxy system for the wind-blade market. Our lead time is less than one week, compared to around three months for foreign suppliers. We have long-term supply contracts with all major rawmaterial suppliers, so we can guarantee that all our customers receive their products on time without any shortage. We are developing a completely new epoxy system, so we believe we could have a much better price in the near future.
We also offer a new vinylester grade that could be used for large structures, with very low viscosity, lower gel time and low exothermal temperature.
Finally, unsaturated polyester is a very mature product. In this market, consistent quality is sometimes more important than superior physical properties. Of course, competitive prices are also a key issue.
JCM: What is your main target? Do you plan to invest?
L. L.: Our first target is the China and Asia Pacific market, as there are almost no local and professional manufacturers of wind-blade material in this area. To meet the demand of the wind-blade market, we are building a dedicated factory in Teda (China, Tianjin) with a total investment of USD 9M for the first phase of construction. This way, we will have completely new facilities for our epoxy formulation system, vinylester resin and unsaturated polyester resin.