Chinese wind turbine maker Goldwind announced that it bought the Rattlesnake wind power project in Texas from Renewable Energy Systems for an undisclosed amount, making this the Chinese giant's largest project in the United States and the a key to its future growth strategy.
Goldwind is currently the largest wind turbine manufacturer in the world, accounting for 12.8 percent of the global market, having replaced Danish Vestas at the top spot last year. Navigant Research, which compiled the data, noted in its report that the changes in market shares were a result of demand growth, mainly in Germany and the U.S.
The wind industry in the latter, according to Fitch Ratings, is set for stable growth. The ratings agency listed efficiency improvements and policies for reducing the public's reliance on fossil fuels as two of the drivers of this growth. Then there are the production tax credits that U.S. wind power companies have enjoyed, although for a while they risked having them taken away. Related: Oil Prices Spike Ahead Of Inventory Reports
Goldwind is obviously aware of this growth potential and is well positioned to take advantage of it. The Chinese company's last financial report, for the first quarter of this year, revealed a 49 percent increase in net earnings, due in large part to a growing order backlog, and a 56 percent increase in revenues. The company added in its filing to the Shenzhen stock exchange that it expected its net profit for the first half of the year to mark a 50 percent rise on an annual basis.
The Rattlesnake project will likely contribute to this performance.
These days, Texas is not just famous for its oil. It's now famous for its wind power as well. It's the state with the greatest wind power generation capacity. Rattlesnake will be an impressive installation: its first phase will involve the construction of 64 turbines with a capacity of 2.5 MW each, but eventually the total capacity of the wind farm should reach 300 MW.
Last year, Goldwind passed the 7 GW mark of installed capacity across the world. This year, the company aims to increase this to 8 GW, and acquisitions such as the Rattlesnake one are an essential part of this plan. Related: Venezuelan State-Run Oil Co. To Pay Suppliers With Debt Swap
The U.S. wind industry is an attractive sector right now. With production tax credits to be extended for another five years, wind projects can compete with traditional sources of generation like gas and coal. As the Wall Street Journal reports, local utilities are rushing to jump on the renewables bandwagon, and now they face major competition courtesy of Goldwind.
When competition from Chinese solar panel makers hit U.S. manufacturers a few years back, urgent government measures became necessary to protect the local businesses, as the Chinese companies were ready to sell their product below production costs. The wind power market appears to be less aggressive however. Goldwind is buying projects rather than trying to undercut local manufacturers' prices. This approach could turn out to be more harmful for less flexible companies in the long run. After all, what's to stop a well-funded foreign company from buying all the tastiest bits in the industry?
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More
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