As price competition in China intensifies, the focus is shifting towards exports.
Last year, Chinese wind turbine exports saw a significant increase. The European Union (EU) has investigated subsidies for Chinese wind turbines following electric cars and solar power. Chinese companies are speeding up exports in response to intensified domestic market competition.
On the 22nd, the Chinese economic media, Caixin, reported that Chinese wind turbine exports surged by 60.2% year-on-year last year, citing a report recently published by the Wind Power Committee of the Chinese Renewable Energy Society.
Goldwind, China’s largest wind turbine manufacturer, exported turbines with a capacity of 1624 megawatts (MW), three times more than the previous year, and Envision Energy’s exports increased by 40% to 1624MW. Goldwind and Envision Energy, the world’s top two wind turbine companies, accounted for 90% of all Chinese exports. In addition, six companies, including United Power, CRRC, Sany Heavy Industry, and Ming Yang Smart Energy, exported wind turbines to 18 countries.
Chinese wind turbine companies are targeting export markets due to the deterioration of profitability due to intensified price competition in China. The average price of Chinese onshore wind turbines has recently halved from 3,000 yuan per kilowatt (KW) at the beginning of 2021 to 1,500 yuan ($238). During the same period, the price of offshore wind turbines also plummeted from about 7,000 yuan per KW to 3,000 yuan ($476). As a result, Goldwind’s net profit decreased by 40% for the second consecutive year, and Ming Yang Smart Energy’s net profit shrank by a whopping 90%.
Notably, China’s wind turbine exports are concentrated in the Belt and Road Initiative (BRI) participating countries and BRICS (Brazil, Russia, India, China, and South Africa). According to data from the Wind Power Committee, the top five countries for Chinese wind turbine exports last year were Uzbekistan, Egypt, South Africa, Laos, and Chile, accounting for about 70% of China’s total wind turbine exports.
China needs to target the European market to increase its export volume. China, the world’s largest wind power market, accounts for 67% of the global market, with a market size of 79 gigawatts (GW). However, the size of exports compared to the domestic market is only one-twentieth, indicating an immense potential, according to Chinese industry. Chai Xin pointed out that the proportion of Europe in last year’s wind turbine exports was only 2.3%.
Meanwhile, Margrethe Vestager, Executive Vice President of the EU in charge of competition, announced in a speech at Princeton University on the 9th (local time) that “we are launching a new investigation into Chinese wind turbine suppliers,” mentioning the EU’s Foreign Subsidy Regulation (FSR). It’s a move to block the export of wind turbines to Europe, following electric cars and solar panels from China. In response, the Chinese Ministry of Commerce harshly criticized the EU on the 11th, calling it “typical protectionism.”
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