Vestas (VWS.CO: Quote, Profile, Research), the world's biggest wind power equipment producer, plans to produce 800 of its new V60-850 kilowatt units per year at its new factory in Inner Mongolia once it goes into full operation in a year's time, Lars Andersen, the company's China president, said on Tuesday.

China is massively expanding its wind power capacity, with more electricity expected to come from wind than nuclear power by 2020, and Vestas plans to exploit the boom.

The whole product and the whole factory is specifically tailored for China's wind conditions, road conditions and grid conditions, Andersen told reporters at a briefing in Beijing.

The V60 has longer blades that turn at a lower wind speed, and is designed to operate in a broad range of weather conditions, he said.

Inner Mongolia in northern China is by far the country's leading region in terms of wind power. Its installed wind power capacity was 3 gigawatts in 2008 and is expected to reach 5 gigawatts by 2010, Xinhua news agency quoted Zhao Shuanglian, vice chairman of the region, as saying on Monday.

The region had 4,000 wind turbines, Xinhua said, meaning Vestas' production of the new 850 kW model would add 20 percent to the number of existing local turbines.

Andersen said China would remain one of the top two wind power markets, along with the United States, and he was encouraged that China expected wind power capacity to hit 100 gigawatts by 2020, up eightfold from 2008. [ID:nPEK336151]

There was no reason why China could not raise total wind power capacity to around 20 percent of the total, the same as in Vestas' home base of Denmark, he said.

China's priority has been to stimulate domestic production capacity. All domestic wind power facilities are required to source 80 percent of their technology and equipment from Chinese enterprises, and some foreign suppliers have complained that they are being forced to accept lower-quality products.

However Vestas, which came to China in 2005, had faced no problems with quality in China and would have used Chinese suppliers even without the legal requirement, Andersen said.

Experts have also complained about China's tariff bidding system, which forces project owners to compete against one another to offer the cheapest tariff to the grid. The government has already launched two pilot schemes offering favourable tariffs for renewable energy projects but has no plans as yet to extend the policy nationwide.

What is really important is what it costs to generate a kilowatt-hour. (Power companies) are capable of going in and bidding, and knowing what return they will get, Andersen said.

China