Don’t say wind, say better “made in China” wind. That the Asian giant has managed to become a fundamental piece of renewable technologies, including wind turbines that take advantage of gusts of wind, is nothing new. The European sector itself has warned of the growing footprint of the Chinese industry. Not because the trend is known, however, the data that help to measure it is still surprising. Especially when they provide perspective on its evolution and what is, as of today, the share of Asian companies.
The consultancy Wood Mackenzie, based in Edinburgh, has just published a report that puts the thermometer on the sector. And the result is striking.
How are turbine orders evolving? That is the first question answered by Wood Mackenzie analysts, who, before taking out the magnifying glass to study the different markets and companies, focus on global demand. And its balance is positive. Quite a bit, in fact. According to their data, the world record of wind turbine orders said goodbye to 2022 with double good news: the acquisition of the equivalent of 44 gigawatts (GW) in the fourth quarter and 136.6 GW in the full year. In both cases they are record figures.
How does that translate into investment? The authors calculate that the annual investment was around 74,200 million dollars and, in general terms, the intake of orders experienced a year-on-year rise of 90% during the last quarter of the year and 30% if what is analyzed is the year as a whole. fiscal. The data is also good if we focus on offshore, offshore wind: last year it also reached new records, with 19 GW in orders received.
And what is the role of China? Well, according to the data from WoodMac, we can speak of a fundamental role. And that may mean falling short. The consultant calculates that China monopolized close to 65% of the capacity of orders during the fourth quarter, a percentage that even rose to 70% in the whole of the year. What’s more, the order entry ranking was led by three OEMs (original equipment manufacturers) based in the Asian giant: Envision Energy, Mingyang and Goldwing, with more than 17 gigawatts each.
“This activity was driven by the positioning of the developers to comply with China’s 14th five-year plan, which highlights the development of green energy in the Asian nation,” highlights the study, which leaves another key indicator: 80% of the activity associated with offshore wind came from China.
And the rest? Here is one of the keys. Order intake outside of China fell 15% year-on-year to 41 GW, around 9 gigawatts below the four-year average order capacity. The phenomenon is so important that Luke Lewandowski himself, director of research at Wood Mackenzie, dwells on the fine print of the analysis.
What reading does it make of the data? “We have seen incredible activity in China, but their skyrocketing numbers have somewhat masked a slowdown in Western OEMs, which have been hit by supply chain challenges and cost increases,” Wood analyst warns. Mackenzie, continuing: “This has had a negative impact on both new order intake and installation activity outside of China.”
A separate chapter deserves North America, where the intake of orders was “relatively stable”, with a rise of 7%. “We are already seeing the positive reaction to the Inflation Reduction Act, with a 22% increase in orders in the second semester compared to the first in the US,” he settles.
What does the sector outside of China think? Over the last few months, the large European manufacturers have already recognized the complexity of a scenario marked by the macroeconomic and geopolitical context, with imbalances in the market, drift in prices or interruptions in the supply chain, among other factors. such as slow permissions. In October Wind Europe already calculated that during the third quarter of 2022 turbine orders had fallen by around 36% compared to the same period in 2021.
This context is completed with the shadow of the Asian giant. “China is starting to win some orders in Europe for wind turbines. They are knocking on the door,” Giles Dickson, director of WindEurope, reflected in The Financial Times at the end of 2022. The newspaper’s calculations show that if in 2018 the large Chinese manufacturers accounted for around 36.6% of the new turbine installations worldwide, in 2021 they were already around 53.5%.
Images: Xinhua and Wood Mackenzie
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