The World's #1 Renewable Energy Network for News, Information, and Companies.
Untitled Document

AMSC Files Criminal, Commercial Complaints Against Sinovel

Sinovel Wind Group Co Ltd is facing criminal, civil and commercial complaints after American Superconductor Corporation (AMSC) filed suit alleging illegal use of its intellectual property. AMSC alleges that Sinovel illegally obtained and used core components of its proprietary power and control systems in order to upgrade 1.5-MW wind turbines to meet proposed Chinese grid codes, and to potentially allow for the use of core electrical components from other manufacturers, including a company founded by Sinovel.

An arbitration claim to compel Sinovel to pay for past product shipments and to accept all contracted but not yet delivered core electrical components and spare parts has also been filed. Sinovel stopped accepting shipments from AMSC in April, claiming it was reducing its inventory levels; the company also failed to make payment for subsequent shipments.

According to AMSC CEO Dan McGahn, over the past five years Sinovel has produced thousands of 1.5-MW turbines using core electrical components supplied by AMSC. These components contain proprietary power and control systems which are heavily encrypted. McGahn alleges that senior-level Sinovel employees paid an AMSC employee to illegally turn over a portion of the power module software and source code developed for these machines, enabling Sinovel to upgrade the control system. McGahn claims to have evidence that Sinovel has already used the stolen property to upgrade its turbines saying: "The turbine Sinovel is producing and upgrading today may contain stolen intellectual property."

While emphasizing that it remains "strongly committed to its Chinese customers," McGahn’s key point for investors is that Sinovel is no longer a customer. "Customers pay their bills, and customers respect intellectual property," he said.

In July AMSC was forced to admit that it will be restating its financial statements for the second and third quarters of the 2010 fiscal year. In a statement the company said that "revenues associated with unpaid shipments to certain Chinese customers, excluding Sinovel Wind Group Co., Ltd. (Sinovel), after August 31, 2010 should not be recognized until AMSC is paid, or payment is otherwise reasonably assured, for such shipments. With respect to Sinovel, AMSC has determined that this cash-based method of accounting should have been applied for shipments after September 30, 2010."

The company expects that revenues for the fiscal quarters ended September 30, 2010 and December 31, 2010 will be reduced to approximately $98 million and $43 million, respectively. For the fiscal year ended March 31, 2011, the company expects that revenues will be approximately $307 million.

Market analysts had already been nervous that AMSC had relied on Sinovel for three quarters of its revenue, especially as Sinovel’s performance has weakened in recent months due to a downturn in the Chinese wind market, a point echoed by McGahn, who said: "[Sinovel’s] business is off, their CFO departed and they had to restate their financials."

However, AMSC has clearly suffered as a result, dropping about $20 per share since April and losing another 15 percent on news of the legal action with Sinovel. Shares are currently trading at around $6 each.

Xiao Qiang, Sinovel’s spokesman, reportedly told Bloomberg that it is "impossible" for the company to comment before consulting its legal affairs department.

AMSC says it has since added new layers of authentication and monitoring protection to prevent future illegal use of its software, and it has further limited the number of employees with access to the core code.

The accused employee, an Austrian system integrator, is currently in jail awaiting trial on economic espionage charges, AMSC says.

Untitled Document


U.S. Offshore Wind Power Industry Starting to Emerge

Ehren Goossens, Bloomberg A few miles off the coast of Block Island, a new U.S. industry is emerging from the Atlantic Ocean. That’s where Deepwater Wind LLC is installing a massive steel frame, more than 1,500 tons, that sits on the seabed and juts...

100-MW Kenyan Wind Farm Will Help Power Africa

Renewable Energy World Editors As part of President Obama’s Power Africa initiative, the Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, announced that it committed $233 million in debt financing to ...

Regional News from the July/August 2015 Digital Edition of Renewable Energy World

Renewable Energy World Editors EcoFasten Solar announced that it launched a new mounting "Rock-It System" that it would be displaying during Intersolar. Product compliance was determined through testing per UL Subject 2703, which reviews integr...

With 1.6 GW of Wind Capacity Installed in Q2, American Wind Power Continues To Ramp Up in 2015

David Ward, American Wind Energy Association With 1,661 megawatts (MW) of newly installed wind turbines coming online during the second quarter of 2015 and more than 13,600 MW under construction, American wind power continues to increase its contribution to the U.S. e...


Volume 18, Issue 4


To register for our free
e-Newsletters, subscribe today:


Tweet the Editors! @megcichon @jennrunyon



Doing Business in South Africa – in partnership with GWEC, the Glob...

Wind Energy in South Africa has been expanding dramatically, growing fro...

2015 AREDAY Summit

The 12th Annual AREDAY Summit, August 8-13th in Snowmass Colorado. Engag...

StartUp Green

AREI, American Renewable Energy Institute, in partnership with ...


Clean Energy Patents Maintain High Levels in First Quarter, Solar L...

U.S. patents for Clean Energy technologies from the first quarter of 201...

Fact Check: AWEA represents American wind power

The American Wind Energy Association (AWEA) is proud of its members for ...

Koch Professor drops his Koch title, still makes same errors plus s...

The Koch Professor’s title isn’t the only thing that’s...


Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now