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Before i wade into this discussion, one analysis i can provide for background is a salient discussion of what is behind A-Power.  I write this in full agreement with MfM's worry about the "very clear threat" from China (meaning Chinese turbine manufacturers.)

China does indeed have an industrial policy designed to jump-start the Chinese industry.  To qualify for any government program in China, the turbines must be 70% sourced in China.  This has led to a huge business in technical licensing of designs from established European shops. The only other pathway for western firms to enter the market is to form joint ventures with Chinese firms, or to actually establish subsidiaries, like Vestas, Nordex, GE, and Gamesa.

Virtually all of the European design shops have license arrangements with Chinese companies, as well as some manufacturers like REpower. The licenses themselves run the gamut in quality, including designs from the top shops like aerodyn, to very poor shops whose sole interest is royalties.

Background to this analysis is that such industrial policy is known to the Chinese to be fraught with potential failure for many firms. The Chinese wind industry has exploded so quickly that in general the performance level of the equipment is very poor. We have been told by officials that they expect up to 90% of the firms to fail, but that is the method to create a competitive industry globally.

A-Power existed as a near consulting firm, with a controversial background. They acquired the license for this turbine from a 3rd tier German manufacturer, Fuhrländer, who had little real success in Europe, but had great licensing success in Germany.

In fact, Fuhrländer provided the licenses for China's largest manufacturer, Sinovel, even though they could barely sell the turbine in Europe.  Before these licenses, Sinovel barely existed.

The German company acquired a further license for a 2.5MW turbine, but this time from a reputable design shop, W2E, made up of ex-Nordex designers. They've produced a few dozen of the turbines here in Europe, which i've analyzed and found excellent, at least as far as the design.

Instead of a further license with their partner Sinovel, for some reason  Fuhrländer sold the license to a firm with no prior manufacturing experience, and a shady past, A-Power.

A-Power's first turbines were completed this summer, and they are now in full production for both Cielo in Texas and the Chinese market. Production lines established before any testing is completed have a history of failure in the wind industry, and that's very possibly the case here.

Such failure would not reflect on the design from W2E, rather the QC at manufacturing level.

Strangely,  Fuhrländer has also licensed the technology to a start-up in the US, which was planning to establish manufacturing of the design in the US.  They will likely now be undercut by A-Power, a very queer decision by  Fuhrländer. At least two of these turbines are currently operating in the US, which i believe to have been manufactured in Europe.


"Life shrinks or expands in proportion to one's courage." - Ana´s Nin

by Crazy Horse on Tue Nov 10th, 2009 at 03:24:04 PM EST
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Sooo much good information here.  Of which I had little idea.....  So happy that you wrote this here.

Do you have any good sources of info about the A-Power story?  There's been a spate of stories written in the popular media in the US, but none have framed it in terms of industrial policy.  I've been wanting to explore this case with China further.  It seems that a really good article could be written in this vein, making the story understandable for a broad audience outside of academia.

Thanks for the comment.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Tue Nov 10th, 2009 at 03:44:59 PM EST
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There's not a lot of verifiable info on A-Power, much of what i've learned is through direct contacts with analysts.  I've been told that the father of A-Power's president is in jail in the US for securities fraud, which analysts claim to have verified, but i haven't.

What's most important to me is that industry history makes it unlikely that the turbine will be successful, despite its pedigreed design. The turbine has been undergoing testing in Germany since 2008, and there are several dozen installed this year in Europe. i was impressed when i visited three of them, after two days with the design team.

Chinese turbines' capacity factor is far lower than standards here, and that's for the best machines. it will take a minimum of 3-5 years before European quality begins to be reached, and likely longer.

Here's the turbine on the highest tower in the world, 160m.

What's even weirder about the story is that A-Power's license is upgraded from the somewhat tested 2.5 design to the untested 2.7MW version.

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin

by Crazy Horse on Tue Nov 10th, 2009 at 05:31:41 PM EST
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