How Chinese Wind Power Enterprises Open a Door Overseas

In August 2011, Blackstone, a private equity investment fund of the United States, announced that it plans to invest a total of EUR 2.5 billion in two offshore wind projects under construction in Germany. Of this, 1.2 billion euros will be invested in a project in the Beihai known as “Meerwind” (sea breeze). The wind power project will install 80 wind turbines and plans to complete it in 2013; another investment project will install 64 wind turbines, planned for 2016 carry out. Blackstone was the first private equity fund to invest in German offshore wind power. The British "Financial Times" quoted Blackstone senior management as saying that Blackstone also intends to purchase a development license for a German offshore wind project.

The "Meerwind" of Blackstone's lock-in investment also received a consortium of four German insurance companies. This is also the first time that an insurance company guarantees offshore wind projects. Armin Sandhoevel, chief executive of Allianz Climate Change Solutions Gmbh, one of the four insurance companies, said in an interview with reporters that the premise of insurance companies’ involvement is “insurability”. . From the standpoint of offshore wind power projects, we mainly look at two aspects. One is the risk of policies and regulations, and the other is technology risks. The former is more important. He believes that the political support of the German government is sufficient, and adjustment of the subsidy policy has enhanced the attractiveness of the investment. The technical risk has also been shown to be controllable after several projects that have been connected to the network, although "there still exist huge technical and operational risks."

Sandewhurt pointed out that for Chinese companies, entering the offshore wind power market as an investor may be a shortcut. There are two ways, one is pure financial investment, the other is through the acquisition of a local wind turbine equipment manufacturer.

One of the most influential consulting firms in the international wind power industry, Denmark's MakeConsulting partner Steen Broust Nielsen, in an e-mail interview, also stated that financial investment is a key element of the current market and can play a key role. In this way, you can gain market experience, practical knowledge, and establish business records. “While building long-term international business development on financial investment is not a sustainable strategy, it can open up a gap for Chinese manufacturers. door."

More than a month ago, a developer of offshore wind projects in Norway announced that, given the possibility of obtaining financing opportunities, they may choose the products of Chinese wind turbine equipment manufacturers. Sinovel wind power (.SH) is also using this approach for onshore wind power projects in Ireland.

In July 2011, Sinovel announced that it will participate in the construction of a 1,000-megawatt wind power project in Ireland, with CDB providing partial credit support. The total investment of this project is 1.5 billion euros, which is Huarui's first overseas project. But two months later, Hua Rui was caught in an intellectual property lawsuit. Huarui’s former partner, American Superconductor Corporation, accused Huarui employees of stealing their trade secrets, illegally acquiring and using some of their wind turbine software codes, and demanding a claim of US$400 million.

On October 10, Huarui Wind Power announced that it had requested the Beijing Arbitration Commission to dismiss all of the US Superconducting arbitration requests and filed an economic loss of nearly 800 million yuan for breach of contract claims. After Sinovel Wind Co., the claim amount was increased to 1 billion yuan.

Huarui Wind Power and American Superconductor are each holding the word, and the lawsuit is still stuck. Although the lawsuit has not yet been finalized, it has caused an inevitable negative impact on Sinovel's overseas reputation. Sources told reporters that before the Huarui lawsuit was resolved, overseas project developers could not continue to cooperate with them.

Intellectual property rights are the soft underbelly of Chinese companies, and they are also the most sensitive areas for triggering transnational lawsuits. The German company Enercon is one of the few European wind turbine equipment manufacturers that does not enter the Chinese market and does not intend to enter the Chinese market. German industry insiders said that this is because the company’s founder, Arroys & middot; Aloys Wobben, is very concerned about the protection of intellectual property and does not trust Chinese companies.