Roaring 2021 for Growing Chinese Offshore Industry

Within five years Asia and especially China has become a very active region for the offshore wind industry with almost 6GW of annual installations, surpassing the UK and Germany. For the last 3 years in a row, China has been the largest offshore wind market putting six local wind turbine manufacturers on the global top 10 OEMs in 2020 for the industry.[1]

2021 will be yet a record year with estimated installations of 9.89GW offshore in China as central government subsidy comes to an end. Developers and investors are rushing to commission their projects before the end of 2021. Here a premium offshore wind Feed-in Tariff (0.75 – 0.85 RMB/kWh) for 20 years and no price competition comes to an end.^[2]

“We see your customers – Chinese-based turbine manufacturers – being extremely busy the first half of the year. They more or less have to produce an annual production in six months, so their customers, developers, and utilities can install and commission in the second half of the year”, Cotes' business developer in China, Joyce Li explains.

Meeting with wind farm owners in Shanghai

After such a bull run the market is expected to drop in the next few years. 3 GW of installations in 2022. In 2025 the market will be back at 5 GW of installations, according to GWEC – Global Wind Energy Council. Another factor that will help investors to grow the offshore market further is the political ambition to make China carbon neutral by 2060. This could ease the way for projects and opportunities and open new doors. It is also presumed that the 3 hotspots (Jiangsu, Fujian, and Guangdong) of China will gain more and more value and offshore parks will be expanded. [3]

“At Cotes we are optimistic about the Chinese market in the long, mid, and long term. China has over the years several times proven it will exceed any plans or expectations. We have a good dialogue with other turbine manufacturers and companies in the local market, which we do not supply yet,“ Joyce Li commented.

As mentioned, most of the offshore wind farms are located around the areas of Jiangsu, Fujian, and Guangdong. These 3 areas are producing wind capacity in record time and contributing to the post-pandemic economic growth of China. But the industry is also challenging with on-land limits and saturation. Another challenging fact is, that China’s economy is concentrated mostly on the coast of the country, so the energy needs to be transported long distances from the offshore sites to the consumers.[4]

The policy of China supported the business with a subsidy as well in the economic growth in the last years and is helped the industry to grow in terms of implementing the new angle of the industry in their annual plans. The government is enhancing the policy coordination and reducing non-technical costs, like the development and manufacturing focus in China. Due to these changes, price standards have changed, and a new kind of competition has started. The regulation in china causes the issue that sometimes European standards are not matching with the Asian offshore parts because China is concentrating so far on local developers and players and wants to create a new industry part in the country. Only Siemens Gamesa took the possibility and managed an agreement with Shanghai Electric to enter the market.[5]

Want to know more?

With Joyce Li on our side, Cotes entered the Asian market and can manage the business with a passionate and successful taskforce in Shanghai. We are positioned locally and focus on the wind market and how to implement new strategic expansions in the market in terms of dehumidifiers.

If you would like to know more about our global sales and find various contacts, please visit our website here. We will be happy to help you and answer your questions about the professional support of dehumidifiers in the wind turbine industry.

[1] https://energywatch.eu/EnergyNews/Renewables/article12829369.ece; https://www.cnbc.com/2021/02/25/china-accounted-for-half-of-last-years-offshore-wind-installations.html

[2] https://www.evwind.es/2020/10/22/chinas-offshore-wind-energy-industry-post-2021/77839

[3] https://www.evwind.es/2020/10/22/chinas-offshore-wind-energy-industry-post-2021/77839

[4] https://chinadialogue.net/en/energy/china-offshore-wind-power-growth/

[5] https://www.offshore-mag.com/renewable-energy/article/14188902/china-fueling-asian-offshore-wind-market-growth; https://chinadialogue.net/en/energy/china-offshore-wind-power-growth