China’s A-Power wins huge turbine supply deal in Texas
A-Power Energy Generation Systems says it will supply 240 turbines for a proposed $1.5bn wind farm in West Texas, in a move that underscores China’s emergence as a major global wind industry heavyweight.
The deal represents one of the largest turbine supply contracts ever in the US, with delivery of the 2.5-megawatt (MW) machines to begin in March 2010, subject to Chinese banks agreeing to finance much of the project, according to Jinxiang Lu, chairman of Shenyang Power Group, parent company of A-Power.
The project is a joint venture with Shenyang holding 49%, and private equity firm US Renewable Energy Group and Cielo Wind Power, based in Austin, Texas, holding 51% between them.
"With a long track record for building some of the world's biggest wind farms, the US is a real ideal target for foreign alternative energy investment," Lu says.
The 600MW project would provide power for about 180,000 homes, and encompass 36,000 acres of land.
Neither Lu or Cappy McGarr, managing partner of US Renewable Energy, provided more detail about the wind farm’s location or what companies would build it. Texas is the leading wind power state with more than 8.3 gigawatts (GW) installed and thousands more megawatts under development.
McGarr says the joint venture will request grants or other financial aid from the $787bn US Recovery and Reinvestment Act passed by Congress in March.
Lu notes that A-Power was attracted to the project by its role as both turbine supplier and equity partner, but also by being able to share “intrinsic risks” associated with any large-scale endeavor.
“And we are attracted to the track record of Cielo Wind, the largest privately held wind power project development company in the Southwest United States, with a 16% market share for wind power installation in Texas,” he adds.
A-Power will manufacture the turbines at its new plant in Shenyang using technology licensed from Germany’s Furlander AG, GE Drivetrain Technologies, based in Erie, Pennsylvania, and Norwin of Denmark. The plant has capacity to produce 1.1GW a year of turbines, according to Lu.
Until now, A-Power was a growing but still relatively small player in the Chinese utility-scale wind turbine market.
Lu was optimistic that the US wind market was recovering from a downdraft caused by a recession that the Obama administration said this week ended in the second quarter.
"It seems to be gradually getting back, back on its feet," Lu said. "And more important, we are getting support from Washington."
Published: Thursday, October 29 2009 | Last updated: Friday, October 30 2009
