Chinese turbines sell 20% below rivals’ prices in export markets — EnergyWatch

Turbines produced by Chinese companies are being sold 20% below the prices of US and European rivals in markets outside of China.

This is according to data collected by Bloomberg New Energy Finance, BNEF, based on contracts from 2019 onwards.

Wind turbine prices in the highly competitive Chinese market have fallen to a historic low, which strengthens the opportunities for Chinese companies outside China, including in markets such as the Middle East and Central Asia, BNEF writes.

As an example of this, BNEF cites the contract Goldwind signed with energy developer Masdar back in 2022 to supply turbines for the 500 megawatt Zarafshan project, which is scheduled to be completed by the end of 2024.

At the time, Goldwind was awarded the deal due to more favorable turbine prices.

The fierce competition on the home turf in China has meant that turbines can be installed at a price of 300,000 dollars per megawatt, which is on average 57% lower than in 2020, Bloomberg writes.

The price drop is driven by larger turbines, larger projects that ensure economies of scale, and competition from more than 10 turbine suppliers. However, cost reductions have not been able to keep up with the price drops, which has squeezed Chinese suppliers’ margins.

Outside of China, on the other hand, turbine prices have risen 25% compared to before the coronavirus pandemic, driven by commodity price increases, inflation, rising freight rates and supply chain disruptions. Therefore, export deals may be more profitable for Chinese suppliers than domestic sales.

BNEF also estimates that European turbine manufacturers such as Vestas, Siemens Gamesa and Nordex are unlikely to close the price gap with Chinese rivals as they continue to prioritize improved margins and rely on more expensive supply chains.