CHINA'S wind power capacity may top 120,000 megawatts by 2020, the most ambitious target seen so far, if the industry continues to have government blessing and policy support, according to a report.

The nation's installed wind capacity could reach 50,000MW by the end of next decade with current policies and if environmental policies are strengthened, it could be 80,000MW, according to the report released by the Chinese Renewable Energy Industries Association with other industry groups at the Wind Power Shanghai 2007 show which opened at Intex Shanghai yesterday.

At best, it could reach 120,000MW, or equal to the capacity of five Three Gorges dams, it said. China's official 2020 wind target is 30,000MW, set by the National Development and Reform Commission and now widely believed to be an underestimation.

Installed wind capacity has been doubling year on year in China and stood at 3,600MW as of the end of the first half of this year.

Early last year, China implemented a renewable energy law which gives financial incentives to these project developers in a bid to boost the nascent industry, making it one of the markets with the most potential growth.

"China's wind energy market is booming even though the supportive policies are yet to be improved," said Li Junfeng, secretary-general of CREIA.

Currently, most wind farm investors participate in tenders organized by the government in China, and the low tariffs are crucial for developers to win projects. However, industry officials have warned of risks like developers choosing inexperienced producers for equipment. This could lead to poor quality and lower-than-predicted utilization.

China also requires a minimum 70 percent local production for equipment in new wind farms, to help boost the national industry and prompt foreign firms to establish more manufacturing plants here.

Yesterday at the Shanghai show, Nordex AG Chief Executive Officer Thomas Richterich announced that the German wind turbine maker plans to invest another 50 million euros (US$72 million) in China.