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Renewable Energy’s Future Remains Bright in Asia
The renewable energy sector is rapidly expanding, leading to some growing pains as well as significant opportunities, a panel of experts told the Credit Suisse Asian Investment Conference today.
Liu Shunxing, Chairman and CEO of China WindPower Group, Gino Van Neer, Co-Founder and Asia CEO, Enfinity NV, and Alex Tancock, General Manager of Wind Prospect Hong Kong agreed that growth in wind and solar may prove to exceed China’s expectations.
Mr. Van Neer declared the Chinese government’s plans for 20 gigawatts of solar power by 2020 as conservative, noting the German run-rate of current solar installation would approximately double that amount.
Mr. Liu stated that wind energy has tremendous support of the Chinese government and that this is expected to continue. He said that by 2020, wind power was expected to be 8%-10% of total energy produced. Mr. Tancock said that SOEs would continue to dominate the wind market , while Mr. Van Neer echoed the necessity for foreign companies to team up with Chinese companies to be successful in that market.
Mr. Tancock stated that China is now a victim of its own success, experiencing growing pains after very fast growth. Technology and future government sponsored research and development will be critical for the future of renewables in China, added Mr. Liu.
Capital raisings shouldn’t be a problem in 2010, according to the panelists. Mr. Liu pointed out that wind companies had not defaulted on their loans and are likely to receive more bank financing.
Mr. Van Neer noted that the financial crisis led to the postponement of IPOs, and may create a rush to market in 2010. While historically the Nasdaq had been “lister of choice” for renewable companies, more companies may debut in Hong Kong.
Mr. Tancock said that project margins are falling and a price war had begun. “People need to start thinking about wind turbines as commodities” now that there is huge over-capacity, he noted. Mr. Liu concurred that as a user of turbines, he is seeing not only that price is declining, but that quality has improved.
In response to a question from the audience, Mr. Tancock briefly discussed the logistical difficulties for offshore wind but said the lack of land in places like Hong Kong made it attractive for wind power.
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