Alarm Bells Ring for Indian Domestic Wind Players as Chinese Giant Dongfang bags first Indian WTG contract

Dongfang Electric Corporation,China’s largest power equipment producer has bagged major contracts in India.Dongfang Electric is the 3rd biggest Wind Turbine Producer in China as well and has managed to bag a 276 MW $203 billion WTG supply contract with Abhijeet Group .This is the first major contract wind in the Wind Equipment Sector for a Chinese company and could be start of a major trend.Dongfang has also won a small a massive $2.5 billion contract to supply 6. GW of super critical coal equipment to KSK Energy. Note Chinese companies have become the low cost leaders in the Wind Equipment Industry and sell much below Western competitors.At almost $700,000/MW,the Turbine order is a steal for the Abhijeet Group and cannot be matched by Indian or Western players.Leading WTG companies from the West like Vestas and Gamesa are reeling from Chinese competition and slowdown in Western markets.Suzlon too has been affected as Korean shipbuilders and Chinese wind producers have become major players.Using domestic content requirements and technology transfer,Chinese companies have become top global producers from zero presence just 5 years ago.

Chinese Wind Turbine prices have fallen by almost 25% over the last year  due to heightened competition in China’s wind market.This has made local companies look outwards for expansion despite a burgeoning domestic market.Goldwind,Ming Yang have already raised capital from the stock markets as they look to increase their scale further.Like China’s Huawei and ZTE which have captured the Telecom Equipment market using low cost and Chinese Bank Lending,Dongfang is looking to capture the power equipment market as well.Note the proposal to put a 10% import duty on power equipment imports has been put in cold storage.There are a number of  small wind players in India which are trying to find a foothold alongwith India’s largest company Suzlon.The entry of Chinese Wind Companies should ring loud alarm the domestic industry as the Chinese could overwhelm the local industry here.The scale,size and government support of Chinese companies are on a simply different level compared to Indian companies.Like the Solar Industry,the Indian government might have to give a thought on domestic content for Indian Wind Industry as well.

Dongfang bags 20.4 bn yuan Indian, Chinese orders

China”s leading power equipment manufacturer Dongfang Electric Corporation has received orders worth around 20.4 billion yuan from Indian and Chinese companies.In a regulatory filing to the Hong Kong Stock Exchange, Dongfang Electric said it has bagged three orders in the field of thermal power export, wind power export and nuclear power amounting around 20.4 billion yuan.

The company has bagged two orders from India — one from Abhijeet Projects and the other from KSK Energy worth USD 2.5 billion and USD 203 million, respectively — the filing added.As per the contract, Dongfang Electric would supply 10 sets of 660 MW super-critical units for burning coals power stations to Abhijeet Projects and 166 units of 1.5 MW direct-drive wind-power equipment to KSK Energy.The Dongfang Electric-KSK Energy contract entails the first time bulk export of wind power equipment made in China and also the first time for wind power equipment of Dongfang Electric entering into the overseas market.