Chinese wind turbine manufacturers expand into Europe amid trade tensions

Chinese Wind Turbine-Makers Enter German Market, Stirring EU Concerns

Chinese wind turbine manufacturers have secured their first order in Germany, signaling their expanding presence in Europe and raising alarms within the EU industry. The European Commission has initiated an investigation to determine if Chinese companies benefit from unfair subsidies, exacerbating tensions between the world's two largest wind markets, Beijing and Brussels. Drawing parallels to the collapse of the European solar industry over a decade ago due to limited regulatory action against Chinese imports, European wind manufacturers fear a similar fate.

Currently, Chinese firms such as Goldwind, Mingyang Smart Energy, and Windey constitute less than 1% of Europe’s wind capacity. However, in 2023 alone, they've received orders amounting to 1.2 gigawatts (GW), a volume that previously took them a decade to achieve. This includes a recent deal with German project firm Luxcara for Mingyang turbines with a total capacity of 296 megawatts (MW) – a first for the German market. The German government intends to scrutinize this decision closely.

Industry experts express concerns that China's entry into Europe may be irreversible. Wolfram Axthelm, managing director of Germany’s wind power association BWE, highlighted that Chinese rivals, due to overcapacity, are keen on penetrating the European market. They also reportedly offer more attractive terms, such as deferred payments and prices significantly lower—up to 50%—compared to European manufacturers.

China's production capacity stands at approximately 82 GW, overshadowing its domestic market’s demands and nearly quadrupling Europe’s capacity. In defense, the Chinese Wind Energy Association claims that the country’s competitiveness is derived from its market size, which has driven costs down, and denies any subsidization of its manufacturers. They argue that Europe’s investigation is counterproductive to the region’s wind power and global climate change objectives, stressing that purchasing equipment from China is vital to meet the EU’s expansion targets.

Industry Responses and Developments

To date, major European wind developers like EnBW and BayWa have steered clear of Chinese turbines. Nonetheless, in June, RWE—ranked second globally in offshore wind development—assessed Mingyang’s production facilities to evaluate their products. RWE aims to continue collaborating with established firms but is also exploring if Asian suppliers can meet their stringent standards on technology, quality, safety, and cost-efficiency.

Mingyang has showcased its ambition by producing some of the largest offshore turbines in the industry, with rotor diameters of 260 meters. Luxcara selected Mingyang because it was the only whose 18.5 MW model could be delivered by 2028. This model alone can power over 30,000 households.

Future Prospects and Production Capabilities

Despite logistical challenges of shipping large turbines, most Chinese manufacturers, except for Goldwind's Vensys division and Zhenshi Holding Group, lack European production facilities. Vensys plans to produce an 86-meter turbine blade in Spain, while Zhenshi recently acquired a factory there to manufacture blades.

Evgenia Golysheva, VP of Strategy and Operations at ONYX Insight, highlighted the necessity for local production to maintain equipment efficiently. Last year, Sany, another Chinese turbine maker, contemplated building a plant in Europe and has since hired former executives from Siemens Gamesa and Nordex. Although Sany and others refrained from commenting, Mingyang affirmed its commitment to serving European demand, despite potential resistance from existing competitors.

In summary, as Chinese wind turbine-makers make significant inroads into the European market, industry stakeholders and governments must navigate complex competitive dynamics, supply chain logistics, and regulatory landscapes to secure the region’s renewable energy goals.