OWA Industry Observation | Western Wind Power Giants 'Lose Ground,' May No Longer Have a Chance to Turn the Tide.
01 Wind Power Market Restructuring: Chinese Manufacturers "Seize the Opportunity" to Enter Europe
From India to Brazil, many Western wind turbine manufacturers are quietly adjusting their strategies to focus resources on restoring financial stability, creating a new competitive landscape. Analysts suggest this shift may inadvertently pave the way for Chinese equipment manufacturers (OEMs) to rise in the European market, becoming a key part of the industry's restructuring.
Last month, Goldwind began production at its new plant in Camaçari, Brazil, formerly owned by GE Vernova. This change represents not just an asset transition but a reflection of the shifting trends in the wind power industry. Andrea Scassola, VP of Wind Business at Rystad Energy, noted that Western OEMs are increasingly focusing on the European and American markets to reshape their financial structures, evident from GE Vernova's significant layoffs and its aim to transform into a "lean, efficient, and profitable" enterprise.
Goldwind is one of the Chinese equipment manufacturers expanding its global business.
Meanwhile, Chinese wind turbine manufacturers are responding differently under pressure. The fierce price wars in the domestic market have weakened their profit margins but have also prompted them to look toward the international stage, previously dominated by Western firms. According to WindEurope, Chinese OEMs offer wind turbines at about half the price of similar European products, significantly enhancing their competitive edge and intensifying price competition in these markets.
02Which Markets Are Western OEMs Exiting?
Brazil has one of the world's largest onshore wind power markets, but its wind industry faces competition from abundant hydro resources. In response to these challenges, GE Vernova decided to exit the Brazilian wind market in 2022. Following this, Germany's Nordex had to adjust its strategy and scale back operations in Brazil, despite its significant market potential. Conversely, Denmark's Vestas is expanding its factory in Brazil, planning to produce the V163-4.5MW model.
As GE Vernova handed over the Camaçari plant, its Danish subsidiary, LM Wind, closed another factory in Turkey.
In India, Siemens Gamesa is attempting to sell its wind business, facing legal disputes in the process. Once holding 45% of the Indian market in 2019, that figure has now dropped to below 5%, largely due to the rise of Envision Energy and a revival of local OEMs.
Envision has captured around 40% of the Indian market within a few years, aided by a blade factory in the country.
Last year, Siemens Gamesa closed its blade factory in Morocco. Shortly after, Chinese blade manufacturer Aeolon announced plans to establish its first overseas MW-level wind turbine blade production base in the country, aiming to export to Europe and North America.
In contrast to Western OEMs, Chinese wind turbine manufacturers have shown a strong interest in "marginal" and high-risk markets. Joseph Webster, an offshore wind expert at the Atlantic Council's Global Energy Center, notes that this interest is driven by multiple factors, including Chinese policy direction, financial support, cost control capabilities, and the Belt and Road Initiative.
03 Chinese Wind Turbine Manufacturers Attracting Attention from Western Developers
As Western manufacturers withdraw, opportunities for collaboration between Chinese wind turbine manufacturers and European energy giants are increasing. Scassola from Rystad Energy stated, “Many of the key asset owners are European companies operating globally, and the markets from which Western OEMs are exiting fall within their investment scope.” Chinese manufacturers have already "attracted the attention of Western developers" and formed "partnerships."
Webster pointed out that if Western developers find success in collaborating with Chinese OEMs in emerging markets, they are more likely to partner with them in Europe. He added, “However, when selecting an OEM, Western developers primarily base their decisions on price, quality, and reliability. 'Networking' is indeed important, but it is not the main factor.”
Paulo Almirante, Executive Vice President of Engie Group, presented Goldwind Chairman Wu Gang with the Renewable Energy Industry Performance Award earlier this year. Engie is using Goldwind turbines for a project in Egypt
Recently, Western developers have shown increasing interest in Chinese wind turbines. Companies like EnBW, Statkraft, and Iberdrola have expressed willingness to consider using Chinese equipment or have praised advancements in the Chinese wind power sector. RWE’s head of offshore wind, Sven Utermöhlen, even shared a photo on social media of himself wearing a Mingyang Wind Power safety helmet while visiting their factory.
However, the barriers to entry in the European market remain high, and the complexities of geopolitical and regulatory environments cannot be overlooked. In high-tech strategic industries like wind power, geopolitical influences are significant. To navigate this, Western OEMs are ramping up lobbying efforts to seek political support. Last year, the "Wind Power Proposal" introduced in Europe aimed to enhance the competitiveness of European industries.
Scassola believes that despite the numerous challenges Western OEMs face in recovering in non-European markets, Chinese wind turbine manufacturers, with their cost advantages and global reach, are likely to emerge as new leaders in these emerging markets.
