China's wind market bubble will deflate as the industry enters the worst year in its history, said the Spanish wind turbine maker Gamesa.

"The first half of 2012 is the worst time in the last four years, triggering a faster industry consolidation," said Jorge Calvet, chairman of the company.

Even though China consolidated its position as the world's wind power leader in both newly and cumulative installed capacities in 2011, with 18 gigawatts of wind turbines installed, that was down 6.9 percent year-on-year.

As a result of the slowdown, Gamesa received no orders in the first quarter of 2012.

"We will see even faster deflation in the first half of 2013," Calvet said.

The Spanish turbine maker is the only wind company that recorded higher profits in 2011.

China's wind industry has excessive capacity, going from 10 to 12 manufacturers in 2005 to more than 85 in 2011, according to Calvet.

Li Junfeng, director of the China Renewable Energy Industries Association, said China's wind power industry encountered many difficulties in 2011, including slower wind farm construction and many accidents in the sector, but nevertheless managed to overcome all the hardships and demonstrated excellent performance by the end of the year.

In addition, quality issues last year led to the disconnection of 702 wind turbines from the power grid in the city of Jiuquan in Gansu province and 644 wind turbines in Zhangjiakou, Hebei province.

Since then, China has attached greater importance to wind turbine quality.

"We see a shift in profits from manufacturing to services and maintenance," said Calvet.

Gamesa plans to bring its first G10 model, a 4.5 mW wind turbine, to China this year and is currently in the process of site selection.

Ninety-five percent of the components used in its 2 mW model, which is manufactured in Tianjin, are procured in China.

Foreign turbine makers, apart from GE, occupied a smaller market share in newly installed capacity in 2011.

Vestas dropped from the sixth place in 2010 to eighth place in 2011. It had 661.9 mW of wind turbines installed in China in 2011, holding 3.8 percent of the Chinese market.

GE climbed from 14th place in 2010 to 11th place in 2011. It had 408.5 mW of turbines installed in China in 2011, taking a 2.3 percent market share.

Gamesa rose from eighth to fourth place, and had a global market share of 8.2 percent, according to the Danish consultancy BTM Consult.

China's cumulative wind power capacity amounted to 62.4 gW, up 39.4 percent year-on-year, by the end of 2011.

Source:china.org