Asian Wind-Power Upstarts Stumble

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Wind power is supposed to be the clean-energy panacea, if only the world can get enough turbines. Waiting lists in the U.S. are now stretching into 2010.China and India are eager to fill the void in the world’s windmill market—as they did with everything from cheap footwear to IT. But as the trials and tribulations at India’s Suzlon Energy show, it isn’t that easy.

Earlier this year, Suzlon had to recall almost all the wind-turbine blades it sold in the U.S., after some cracks appeared in Suzlon machines. Now, as we reported in the WSJ, Suzlon’s problems are multiplying.

Suzlon was so eager to crack the U.S. market, it rushed out new prototypes without proper testing on the U.S. grid, which is different than India’s. The result? The big, 2.1 megawatt turbines haven’t performed up to snuff as stipulated in Suzlon’s contracts—and leaves the company on the hook for financial penalties.

Suzlon’s travails could hold lessons for other developing-world wind companies hoping to strike gold in the U.S., the fastest-growing wind-power market in the world. While China’s Sinovel and Gold Wind have enough on their plate for now with China’s own outsized clean-energy ambitions—the country just moved up another wind-power target—the ultimate goal is to become export kings, like global leaders Vestas, Gamesa, and General Electric.

But wind power is a technology game. Cheaper labor gave Suzlon and Chinese makers an early leg up, and helped Suzlon sieze 8% of the U.S. market. The trick now, when costs for everybody’s turbines is on the increase thanks to pricier components, is how to hang on to existing customers while doubling output to satisfy new ones.

Some are already worried: Edison Mission Energy in the U.S. cancelled a 150-turbine order from Suzlon until the blade issue is sorted. Chinese makers have barely started exporting.

Tech glitches have plagued every turbine maker at one time or another. The big difference? Vestas, Nordex, and other European manufacturers worked through their technology glitches decades ago, when wind power was still a fringe energy off the world’s radar screens. Suzlon and Chinese newcomers angling for a piece of the pie face a much steeper learning curve—with the stakes suddenly a lot higher.

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