New ventures to put China's wind energy on steroids

After several years of courtship, Siemens and Shanghai Electric are tying the knot and looking to raise a giant offspring together: the fast-growing Chinese wind-energy market.

The companies have come together in two new joint ventures: one focused on wind turbine research, development and production, the other to specialize in sales, marketing, project management and other services. Subject to anti-trust review, the partnership will see Siemens with a 49-percent stake in each venture and Shanghai with a 51-percent stake in each.

The new ventures are a “breakthrough” in entering the world’s largest wind-power market, said Michael Suess, a member of the managing board of Siemens AG and CEO of the company’s Energy Sector.

“With the two joint ventures we’re now optimally positioned to participate in this strong market,” Suess said. “Our target is to become one of the world’s leading suppliers of wind turbines.”

Already the globe’s number-one wind-energy superpower, China expanded its capacity by 30 percent from 2009 to 2010. Currently producing more than 40 gigawatts (GW) of wind power, it expects to reach a capacity of 150 GW by 2020 — as much as all the power, fossil-fuel-based and renewable, currently installed in Germany.

“The wind market in China is entering into an integration phase, so the cooperation with Siemens for these two joint ventures will provide Shanghai Electric with new opportunities for development,” said Xu Jianguo, chairman and CEO of Shanghai Electric (Group) Corporation.

Siemens and Shanghai Electric have worked together for nearly 15 years in six joint ventures in power generation and transmission. Meanwhile, Siemens has also been edging into China’s wind-energy market, opening a rotor blade production plant in Shanghai in 2010 and starting work with Shanghai Electric this past summer on its first order for an offshore wind farm in China.