First published in Cleantech magazine, Volume 6, Issue 2. Copyright Cleantech Investor Ltd
Any new clean technology with ambitions to take market share from the mainstream energy generation sources must be prepared to suffer growing pains. Wind, like solar, is on a clear growth trajectory. Wind is making an increasing contribution to the energy mix in most major countries and gains market share every year. However, wind equipment manufacturers, like the producers of solar panels, are suffering from competitive pressure on prices.
In the solar industry, competitive pressure from low priced Chinese solar panels hit hard last year – the result of massive capacity expansion in solar in China. Large solar photovoltaic factories, with high levels of automation, have created economies of scale with parallels to the semiconductor industry.
In wind, there are fewer potential economies of scale in manufacturing. Additionally, the sheer scale of wind energy generating equipment favours localised production – although equipment is sometimes moved around the world. Competition from Chinese turbine manufacturers, however, is becoming a significant factor for established western producers.
Denmark’s Vestas clung on to the number one spot in the recently released market share rankings of wind turbine equipment producers from IHS Emerging Energy. Despite a difficult year financially, Vestas managed to stay ahead of China’s Sinovel, which ranks number two (having overtaken GE of the US in 2010). Sinovel is closely followed, in terms of market share, by its fellow Chinese manufacturer, Goldwind, which came third in the IHS rankings (see full list on pages 28 and 29).
The fact that two Chinese producers featured amongst the top three globally in 2011 is mainly due to fast growth rates in the domestic Chinese market. However, the Chinese companies have set their sights on external markets – where they have an advantage over at least some of their western counterparts in the form of access, for the clients developing projects with their turbines, to financing from the China Development Bank.
Chinese wind turbines, financed by loans from the China Development Bank, are gearing up to generate energy in countries including Ireland, Greece, the US, Chile and Brazil. The availability of credit for project financing is critical in the wind industry. Will the Chinese producers manage to topple Vestas from its top spot in 2012? What’s certain is that we can expect another turbulent year!
Anne McIvor - April 2012
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