Irish renewable energy group Airtricity is poised to develop wind farms in remote parts of China after it announced its first venture in what is potentially the world's biggest power market.
Airtricity - which is 51 per cent owned by NTR - has signed a deal with regional authorities to make a portion of Shangyi county, which is in the province of Hebei adjacent to Beijing, viable for wind farm development.
"We're still at the development stage. The first step is securing the land and getting the agreement to develop," said Airtricity's chief representative in China, Barry O'Flynn.
What follows for Airtricity is 12-24 months of analysis, measuring the wind, finding the optimum place and then getting ready to build. The projection is to produce 100-200 megawatts of wind energy.
Mr O'Flynn stresses the project is at the exploration stage and it is difficult to put a value on what it is worth to Airtricity's bottom line, but it could ultimately worth €100-€250 million. The project is well-placed as far as future development of wind power in China goes. Shangyi county is relatively close to power-hungry Beijing and lies in one of four areas chosen by the Chinese government as a special development zone for wind energy, with the goal of generating one gigawatt of wind power in each region.
The main indigenous resource in China is inefficient and polluting coal and the environment is increasingly a hot political issue, so the prospect of clean, limitless energy is a powerful draw and wind energy is earning vocal support from high places.
The other counties are spread around the northern plateaus of Hebei and the province of Inner Mongolia, where the topography is exceptionally sparse and open, perfect for wind power, and could have huge potential for renewable energy in China.
Airtricity is also looking at a number of sites in these areas.
"We've been tracking China for about two years and we set up a presence there this time last year.
"We've been targeting specific counties for wind farm development," said Mr O'Flynn.
Talks with the government opened formally eight months ago and culminated in this deal, signed with great pomp at the Irish embassy in Beijing.
"For any Western business, it's a long haul and not just to get in and make quick buck. Looking at the projections on the economy and energy needs, China strikes all the right chords in terms of renewable energy," said Mr O'Flynn.
The deal involves a full technical and practical evaluation of the region for the development of large scale wind farms, from a technical and practical perspective.
After the initial development phase, Airtricity will manage the equipment procurement, construction and the operation of wind farms in the region and will be responsible for ensuring the projects meet government environmental and health and safety standards.
The company last week announced its was raising €250 million in fresh equity, valuing the business at €800 million. Quinn Group will exit as an investor and the British investment group Energis will invest €122.5 million to take a 16 per cent stake.
