For the Chinese wind industry as a whole, 2012 appears to be another year combining elements of the best of times and the worst of times. China surpassed 50 gigawatts of grid-connected wind capacity and is on its way to add a record amount of new wind capacity, increasing the total installed capacity by roughly 18 gigawatts, representing a 40 percent growth rate. In 2011, China surpassed Germany and the U.S. to become the largest wind country by nameplate capacity and is set to become the world’s largest wind energy generator sometime soon. China also currently supplies roughly one-fourth of all the wind energy injected into the grid worldwide.

Yet the sector faces some immense challenges, from ongoing problems with grid connection, ever-growing amounts of curtailed wind generation, new restrictions from State Grid on who can connect, and, perhaps most importantly, uncertainty about whether policymakers will do as they have done in the past to ensure the sector continues its rapid growth.

As recently as two years ago, it was already becoming apparent that China’s wind industry would quickly mature, and that policy would have to shift toward more rational allocation of capital toward projects with the largest potential to supply needed energy at low cost. The latest results from the third quarter of 2012 show that this rationalization is still some ways off: curtailment is still a huge problem, and industry profits are in a nosedive.

via China’s Wind Market: Growing, But Challenged by Grid Realities : Greentech Media.