Wind turbine manufacturers accelerate "hand-to-hand combat"

The decline in the gross profit margin of the whole machine manufacturer has swept the industry, and the era of low profits of the wind power machine may have arrived.

Recently, Bloomberg New Energy Finance, a market research institution, announced the data of China's new wind power hoisting capacity in 2023, and the new domestic wind power hoisting capacity last year was 77.1 GW, a record high, an increase of 58% over 2022. Among them, onshore and onshore wind power achieved high growth at the same time, with onshore wind power adding 69.4 GW, a year-on-year increase of 59%; Offshore wind power added 7.6 GW, up 48% year-on-year.

Behind the high growth is the increasingly fierce competition for market share, as the wind power manufacturing has entered the era of low profits, wind power manufacturers continue to consolidate their own advantages while seeking more profit growth poles.

The market competition for mainstream machine manufacturers is fierce

According to the data, the top three wind turbine manufacturers in 2023 will all have a lifting capacity of more than 10 GW. Among them, Goldwind continued to rank first, with a new lifting capacity of 15.67 GW, and Envision Energy ranked second with a new lifting capacity of 14.84 GW. It is worth noting that Goldwind's market share has decreased from 23% in 2022 to 20%, while Envision Energy has increased from 17% to 19%, and the gap between the top two market shares has gradually narrowed.

During the same period, the new hoisting capacity of Yunda Co., Ltd., Mingyang Intelligent and Sany Renewable Energy ranked third to fifth, with new hoisting capacity of 10.38%, 9.02% and 7.76% respectively, and their share in the domestic wind power market also exceeded 10%. The total market share of the top five machine manufacturers in the domestic market has reached 74%, and the market concentration is still relatively high.

In addition, Dongfang Electric, Electric Wind Power, CSSC Marine, CRRC and United Power are also on the list, ranking sixth to tenth in terms of new hoisting capacity.

Last year, the newly installed capacity of offshore wind power doubled compared with 2022, replacing electric wind power in the first place, and during the same period, the new lifting capacity of electric wind power and Envision Energy reached 1.6 GW and 1.1 GW, and the momentum of offshore wind power is rapid. In addition, Yunda will also complete the full-capacity hoisting of its first offshore wind power project in 2023, with a total scale of 504 MW.

In the field of onshore wind power, Dongfang Electric has achieved a three-fold increase in the hoisting capacity of onshore wind power, and Sany Renewable Energy's onshore wind power hoisting capacity in 2023 has almost doubled compared with 2022 and ranked fourth, and the growth rate is also worth paying attention to.

Demand is increasing, but we should still be wary of excess

By the end of 2023, the market share of the top ten domestic machine manufacturers has reached 99%, and the market space of foreign machine manufacturers has been continuously compressed, decreasing year by year from about 3% in 2021, and the market share of foreign machine manufacturers in 2022 and 2023 will be only 1% and 0.4% respectively, and only the European wind power company Vestas will add 61 MW of lifting capacity in 2023.

In the view of Bloomberg New Energy Finance, it is affected by the fierce local competition.Foreign wind turbine manufacturers almost no longer have new hoisting capacity in China.

Since wind power entered the era of parity, China's wind power market has experienced several years of fluctuations, and after superimposing the "dual carbon" goal, 2023 is the first year that China's wind power market will achieve both onshore and offshore growth after stopping subsidies for new wind power projects. Under the condition of changes in supply and demand, the price of wind turbines is constantly falling.

Statistics show that the average annual production capacity of wind power in China has reached about 100 GW, and according to the recent forecast of Qin Haiyan, Secretary-General of the Wind Energy Professional Committee of the Chinese Renewable Energy Society, China is expected to add 75 GW to 85 GW of wind power installed capacity in 2024.

Under the risk of oversupply, the bidding price of domestic wind power units dropped from about 3,700 yuan/kW around 2020 to about 1,500 yuan/kW in the third quarter of 2023, a decrease of nearly 60%. Not only that, according to industry statistics, the number of projects with winning bids of 1,000 yuan to 1,400 yuan per kilowatt accounted for 17% in the past year, repeatedly refreshing historical lows.

Taking the 6.25 MW wind turbine as an example, according to the average price of the industry, the cost of equipment components basically reaches 1,200 yuan/kW, and the floating cost is about 200 yuan/kW, which also means that the price of the wind turbine below 1,400 yuan/kW is almost unprofitable.

In fact, the low-price environment for several years has put "huge pressure" on the whole machine manufacturer. In the recently released 2023 annual performance forecast, Mingyang Intelligent pointed out that affected by the industry cycle, the wind power industry has entered a stage of fierce price competition, and the overall bid price of wind turbines has declined, especially for onshore wind power, and the overall price of the company's wind turbines has declined, which in turn has led to a year-on-year decline in the gross profit margin of the company's wind turbine sales.

The above situation is not an isolated case, the decline in the gross profit margin of the whole machine manufacturer has swept the industry, and the era of low profits of the wind power machine may have arrived.

Seeking more profitable growth poles is key

To promote the healthy development of the industry, in addition to adhering to product quality, machine manufacturers can also actively expand more business and seek more profit growth poles.

"Judging from the current industry situation, on the one hand, wind power manufacturers have laid out new energy downstream application business, and on the other hand, they have vigorously expanded emerging markets and achieved revenue growth in more places." Tian Qingjun, senior vice president of Envision Group, said in an interview with reporters, "At present, it has become the consensus of the development of the industry to continuously reduce costs, improve product quality, and enhance the core competitiveness of enterprises through technological innovation. ”

According to the reporter's understanding, the top three domestic wind power manufacturers have stepped into the self-operated wind farm business, seeking to increase power generation revenue. Judging from the financial report released by Goldwind in 2023, the company's wind power construction plan and approved index capacity in Guizhou, Heilongjiang, Hebei, Jilin, Inner Mongolia and other provinces, autonomous regions and cities, the grid-connected installed capacity of self-operated wind farms have increased, and the power generation revenue has also increased significantly. Envision Energy is also not to be underestimated, with the installed capacity of self-built wind power projects hitting new highs year after year, and opening its own wind power business in Hunan, Inner Mongolia and other provinces, autonomous regions and municipalities.

In addition, with the advantages of its own wind power industry chain, OEMs are also actively involved in diversified emerging fields such as hydrogen energy and power batteries, which have more potential, and support downstream consumption while building wind power, opening up new tracks to increase revenue, and further promoting green electricity consumption.

It is worth noting that China's wind turbines are "going to sea" with rapid momentum.Southeast Asia, Central Asia and even the European Union have become important target markets.

Under the leadership of the "double carbon" goal, the market pattern of wind power turbines is still changing.