Wind turbines work best in a consistent breeze. If only. Indeed, the Chinese wind energy industry finds itself utterly becalmed. Since listing just over a year ago, shares in the two biggest wind turbine makers - Sinovel and Goldwind (numbers two and three in the world by capacity, after Vestas) - have fallen about two-thirds. This week Goldwind warned of a 75 per cent fall in profits for 2011.
To be fair, China's turbine makers have a lot to contend with.
After the government set targets five years ago for renewable energy to make up a sixth of the country's power by 2020, nearly 100 manufacturers piled in. Now that the market is cooling, competition is starting to bite. Newly added wind power capacity fell for the first time last year, by 5 per cent, and is set to decline more sharply in 2012. The price of wind-generated electricity is twice that of coal, so State Grid - China's largest grid operator in charge of connecting power with distributors - has little incentive to do any connecting. More than a quarter of installed capacity remains unlinked to the grid.
As with any maturing business cycle, though, the troubles will probably favour the biggest manufacturers. The top domestic makers have increased their share of the domestic wind market at the expense of smaller contenders and overseas competitors. Vestas' share of the Chinese market fell almost a third last year.
But while turbine growth in China is slowing, it is already the world's biggest market and will probably remain so. Total capacity is still expected to double by 2015, according to Barclays Capital. And in overseas wind power markets, which picked up by a third last year, Chinese makers have the wind at their backs in the form of government support for overseas forays. That improves access to cheap capital, allowing them to compete aggressively with global peers. All told, Goldwind looks good value, trading at a 10 per cent discount to Denmark's Vestas.