China Wind Systems Announces Completion Of Facility for Wind Components

China Wind Systems has completed the construction of a major manufacturing facility in Wuxi, to be used exclusively to manufacture high precision rolled rings and other critical components for use in the wind power industry.

The new manufacturing facility measures 107,639 square feet and its initial construction was completed in August 2007. The new facility is highly automated with state-of-the-art heat treatment value simulation software, a "green" technology developed by the Forging Technology Section of the Mechanical Engineering Institute, a research organization that helps the company's machines operate with high heating efficiency.

A significant portion of the US$4 million raised by China Wind Systems in November 2007 through a private placement led by Barron Partners, LP will be used in the company's initial expansion phase. In the initial phase,
China Wind Systems will focus on producing rolled rings that measure up to 5 meters in diameter as well as other wind mill components such as yaw bearings, shafts and rotor blades. Some of the equipment already purchased to manufacture the wind energy components includes a 5-meter ring rolling mill and a 6,000-ton oil press. China Wind Systems plans to purchase additional equipment during phase two and three of its expansion. In phase two, the company intends to manufacture rolled rings with diameters of greater than 5 meters. In phase three, the company intends to manufacture other wind mill components such as turbine leafs. At the conclusion of its expansion, China Wind System's new facility will be capable of producing forged rolled-rings of up to 8 meters in diameter weighing up to 150 tons, to suit different applications and processes in the wind energy industry.

According to the Global Wind Energy Council, wind energy is becoming a mainstream energy source. Reasons behind the growth in wind energy include concerns about global warming and the rising costs and projected shortages of fossil fuels. The reduced costs of energy generated by large scale windmills is expected to make wind power a viable solution in meeting the projected growth in energy demand by emerging countries such as China. In 2006, global wind power capacity reached 74.3 Giga-watts (GW), increasing at a 24.4% compound annual growth rate over a five year period. BTM Consult ApS projects global wind capacity to reach 203.2 GW by 2011 from 74.3 GW in 2006, a 22.3% compound annual growth rate. GWEC projects wind power to represent 16% of the global electricity supply by 2020 and as much as 29% by 2030, up from just 0.8% in 2005.

Based on current domestic energy requirements and strong government support, large-scale wind energy is rapidly accelerating in China. Morgan Stanley estimates China's total electricity supply to reach 932 GW by 2011, of which 13.4 GW or only 1.4% will be sourced from wind power. BTM Consult SpA has estimated that China's wind power capacity will reach 13.4 GW by 2011, up from 2.6 GW in 2006. The Chinese government estimates China's wind power capacity will reach 30 GW by 2020.

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