ANALYSIS - China wind companies poised for green policy boost

By Leonora Walet and David Stanway

HONG KONG/BEIJING (Reuters) - China's ambitious plan to increase wind power capacity could attract up to $150 billion in investment, but Beijing will have to get serious about revamping regulations and building much needed infrastructure.

China is set to raise its wind power capacity to 100 gigawatts (GW) by 2020, eight times its current level and more than Britain's entire current power capacity, as part of a stimulus package aimed at boosting renewable energy.

Shares of wind firms such as China High Speed Transmission (CHST), the country's biggest maker of wind turbine gearboxes, have risen over 60 percent this year on expectations China will soon unveil more incentives to develop wind energy.

China, the world's second biggest energy consumer, is also the top greenhouse gas polluter, and the threat of climate change is driving Beijing to take a series of initiatives to restrain the country's greenhouse gas emissions by power plants.

"We see wind as the best investment option, as it is the world's most commercial green energy," said Nomura analyst Clarisse Pan, who expects China's wind industry growing at up to 24 percent a year through 2020.

While private funding for wind projects is expected to soar, new transmission lines will have to be constructed as more wind power farms are built.

And faced with tough regulatory hurdles, some firms might be discouraged and hold off investments, making it difficult for China to set its targets.

"The market is too unstable (for us) to take the risk," said Suzlon Energy China chief executive Paulo Fernando Soares, referring to government's large-scale project tenders where foreign firms like Suzlon are struggling to compete with local companies.