An Analysis of the Chinese Wind Turbine Generator System Industry

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An Analysis of the Chinese Wind Turbine Generator System Industry

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Title: An Analysis of the Chinese Wind Turbine Generator System Industry
The Industrial Context and the Role of the State - in the Cases of Vestas and Gamesa in China
Author: Stibolt, Mee Sofie Kjær
Abstract: This thesis sets out to explore the industry-­specific factors that affect the wind turbine generator system (WTGS) manufacturing industry in China. This is done with particular focus on the role of the government and the subsequent effects on the presence of foreign WTGS manufacturers in China. The latter is explored by applying the cases of Vestas and Gamesa, who are two of the few remaining foreign firms in the Chinese industry. Thus the thesis can be broken down into two sections: an industry analysis and a case-­based part, where the main conclusions from the industry analysis are chosen as a basis for comparison of the cases of Vestas and Gamesa. The methodology of this thesis is based on an explorative and qualitative research design, which means that the aim is to explore and not to produce normative guidelines aimed at the Chinese government or any foreign firms operating here. The industry analysis showed an industry under rapid development, characterised by government favouring of domestic WTGS firms and as a result industry overcapacity, due to recent surging of domestic manufacturers. As a result, foreign firms’ market shares have dropped at an equal pace. The largest incentive for foreign firm presence in the Chinese WTGS industry has been the historical yearly growth rates of installed wind capacity of 68 % the past ten years and enormous projected growth in wind power installations in China until 2020. Industrial disadvantages of lack of skilled human resources, weak grid infrastructure, underdeveloped supplier industries have added to the historical importance of foreign technology transfer, which still plays an important role for the development of Chinese wind power, despite their diminishing market shares. The sub-conclusion to the industry analysis showed net total disadvantages, to foreign WTGS firms in China, when assessing the isolated affects of government intervention. However, a total view on the linkages between the other industry-actors, revealed total net benefits to foreign firms. The comparison of the strategies applied by Vestas and Gamesa in the Chinese WTGS industry, was completed on the basis of foreign technology transfer and upgrading of industry-­determinants. The level of investment and technology transfer is higher for Vestas than for Gamesa, but recent contraction and decrease in Vestas’ Chinese operation proves that Vestas’ expectations for the Chinese market have not matched investments. Vestas has gained legitimacy by collaboration with the Chinese government on groundbreaking industry standards, proving its commitment to the development of Chinese wind power. Both firms signal absolute commitment to the Chinese WTGS market, despite unfavourable government effects. Thus this gives some support for the conclusion on the industry analysis that benefits weigh heavier than disadvantages.
URI: http://hdl.handle.net/10417/3734
Date: 2013-07-11
Pages: 87 s.
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