The wind power market in China
China’s wind power industry has only gradually developed since the middle of the last decade, but China has become the main driving force of global wind power in the past five years. From the perspective of China’s power energy in recent years, wind power has become the third-largest source of power after thermal power and hydropower. Wind power generation in 2019 was 405.7 billion kilowatt-hours, accounting for 5.54% of the national power generation.
Whether the cumulative installed capacity or newly installed capacity, China has become the world’s largest wind power market. According to statistics from the China Wind Energy Association, in 2019, China (except Hong Kong, Macau, and Taiwan) installed 10,916 new wind-driven generators of 26.785 million kilowatts of installed capacity, a year-on-year increase of 26.7%; as of the end of 2019, the country’s cumulative installed wind-driven generators were over 135,000 units, and the cumulative installed capacity was approximately 2.36 Billion kilowatts, a year-on-year increase of 12.8%. China’s wind power installed capacity continues to maintain steady growth.
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Six Chinese Companies in the Top 10 Global Marine Wind Turbine Manufacturers
Among the top 10 global marine wind turbine manufacturers, there are 6 companies are Chinese, and they are Shanghai Electric, Envision, Goldwind, Mingyang, United Power and XEMC.
The global wind market has been led by the Spanish German Siemens Gamesa Renewable Energy (SGRE) and the Japanese-Danish MHI Vestas for a long time, according to data from the Global Wind Energy Council (GWEC), these six Chinese companies are going to take the global leadership of offshore wind power. China installed more offshore wind power in 2018 than any other nation in the world.
“Beijing Declaration” outlining China’s ambitions for wind capacity
On October 14, the 2020 China International Wind Power Conference (CWP2020) was held in Beijing. The “Beijing Declaration on Wind Power” was unanimously adopted and jointly issued by representatives from more than 400 wind energy companies around the world.
“Beijing Declaration” outlined China’s ambitions for wind capacity to reach 800GW by 2030 and at least 3000GW by 2060.
China’s ambitions for several main reasons
The following reasons have contributed to China’s giant ambitions:
- China’s aim for carbon neutrality by 2060;
- Offshore wind: An opportunity for cost-competitive decarbonization of China’s energy economy;
- Low exploitation rate of wind power in China.
China has promised to achieve the goal of carbon neutrality by the end of 2060 for the fight against global warming, and it is part of the “14th Five-Year Plan”. A national strategy for wind power and carbon neutrality must be applied for a better life for Chinese people who are suffering from air pollution.
Moreover, offshore wind is also an opportunity for the cost-competitive decarbonization of China’s energy economy. China has reduced greenhouse gas emissions for a great deal recently, partly attributable to major investments in onshore wind.
Investments in offshore wind by China have been still minor, limited compared to the real potential of wind power. The technological development potential of global wind energy resources is about 40 times the current global electricity demand, and most of the resources have not been developed and utilized. China’s developed wind energy resources account for less than 5% of its reserves.
Challenges for foreign players in the Chinese wind power market
The market is indeed giant, while the road is not always straightforward for foreign businesses, and they are concerned mainly for these reasons:
- The booming market dominated by state-owned enterprises (SOEs);
- State policies are mainly made for those SOEs (they have advantages over private foreign investors);
- The huge and diverse market has different rules in each region;
China’s current power market structure can be dated back to 2002, when State Power Group, owning a majority of the energy infrastructure in China back then, was divided into five power generation companies and two grid companies (China State Grid Corporation and China Southern Grid). Since then, “the five” have more than half of China’s energy projects, and a small number of state-owned companies owned about the other half, while private or foreign companies share the remaining. This is the same thing for offshore wind, as the approved pipeline is currently developed by state-owned businesses.
What’s more, since those players are dominating the market and have a complex relationship with the country, rules are mainly made for them. Policies in different regions could also be different.
Opportunities coexist with challenges in the Chinese wind power market
Even though there can be challenges in this giant market, there are still opportunities for foreign players.
On one hand, as the Chinese economy is slowing down, the country is trying to attract more foreign investment, thus the country has worked out several policies and subsidies for investments in China. On the other hand, offshore wind development brings a set of new challenges compared to onshore, it is thus a good thing for China to have experienced foreign partners.
We have worked with foreign investors in Chinese digital marketing since 2002 and we have a deep understanding of the Chinese market. We can help foreign businesses to stand out in this complex environment.