China, a tough but rewarding market: says Suzlon chief

Indian wind energy major Suzlon Energy Ltd, one of the world's biggest wind-turbine makers, voiced frustration at the difficulty foreign companies face in trying to win contracts in China's booming market and hopes that the situation will improve in the next several years.

Suzlon chairman Tulsi Tanti said on Saturday that competition has got tougher for foreign wind power manufacturers in China, but Suzlon still expects to increase its market share as it further cuts costs. "By reducing prices we expect Suzlon will get more business in China in the next two or three years," Tanti said on the sidelines of the Boao Forum in the southern island province of Hainan.

He said Suzlon planned to reduce its cost per kilowatt by a further 10 per cent within 10 years, by which time wind power would have little difficulty competing with traditional fossil fuel electricity as a result of industry standardisation, efficiency breakthroughs and the construction of smart grids.

Foreign companies, after dominating China's nascent wind sector, have seen their market share gradually eroded over the last few years - but they are wrong to accuse China of rigging the bidding process or offering secret subsidies to Chinese manufacturers, Tanti said.

"Our supply chain is in China so we are a 100-per cent local company, but it is very difficult to compete because locals are working with a local cost structure and we are coming in with a global cost structure and bringing high-end technology," he said. "But we are making ourselves competitive - it was a cost gap of 20 per cent.''

China's wind capacity reached around 13 gigawatts by the end of 2009, double the figure at the end of 2008, and government officials suggest it could raise the figure to 150 GW by 2020.