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Global expansion of China's Goldwind set aloft by low-cost turbines

Wind technology exports poised to reprise solar panel success

China continues to promote the use of wind power and other renewable energy sources. (Photo by Yusuke Hinata)

GUANGZHOU -- China's top wind turbine maker Goldwind is shifting its international ambitions into high gear, with rising global investments in renewable energy providing a tailwind.

Expansion into Central Asian nations and others participating in Beijing's Belt and Road Initiative signals that Chinese manufacturers, backed by government subsidies, may soon take the global lead in wind energy -- just as they did in solar power technology.

When this reporter visited Goldwind's Yancheng factory about 300km north of Shanghai in October, workers were busy inspecting roughly 10 nacelles, the core turbine part that houses a generator and gear box and stands more than 3 meters tall. Employees were zeroed in on performing thorough checks, confirming everything from bolt tightness to paint thickness, given that such inspection is difficult once the nacelles are atop the towers.

The plant in coastal Jiangsu Province is Goldwind's main export base. While foreign markets account for just 10% of total sales, big orders have been coming in this year. The company, formally Xinjiang Goldwind Science & Technology, announced in July a 100MW project in southern Kazakhstan to install generators accommodating extreme wind speed changes and capable of powering more than 100,000 local homes.

The Kazakhstan order came after Goldwind won business in Pakistan, Greece and Turkey this spring as the company apparently pursues markets along Beijing's Belt and Road investment program that stretches from China to Europe and beyond.

"To expand our operations globally, we're highlighting our overall low-cost offerings," including maintenance expenses, said an employee.

In September, the wind turbine leader announced a strategic tie-up with Standard Chartered's Singapore unit, apparently in anticipation of project financing on overseas proposals.

The rapid growth of Goldwind, established in 1998, has been fueled by China's domestic demand.

Battling to clean up the country's smog, Beijing began promoting the renewable energy industry in the mid-2000s, with domestic investments in wind power reaching 120 billion yuan ($18.1 billion) in 2015. Wind energy generation totaled 400 billion kilowatt-hours in 2019 -- less than 10% of all power output in the country but far more than the U.S. or anywhere in Europe.

Boosted by such strong local demand, Goldwind rose to the top of the industry in 2015 with the biggest global market share. The company built up design and construction know-how based on German technology, while enhancing cost competitiveness thanks to subsidies and benefits of mass production.

The nacelle, a core turbine part, houses the generator and gear box. (Photo by Yusuke Hinata)

But the momentum was lost as insufficient transmission infrastructure led to underproduction because of a harder time obtaining permits for new projects.

Meanwhile, growing wind energy investment in Europe and industry realignment lifted rivals, with Vestas of Denmark and Spain-based Siemens Gamesa Renewable Energy overtaking the Chinese company in global market share.

Now, Goldwind is accelerating its international drive, prompted by Beijing cutting renewable energy subsidies. Support for onshore wind will be phased out starting in late 2020, and the change is spurring companies to turn to overseas markets and offshore farms, which involve more complex logistics.

Making money overseas is no easy task. Shipping enormous turbines and nacelles is capital intensive, and a strong partnership with a local engineering company is essential for parts assembly. Project delays due to schedule mismanagement and other mistakes risk compensation liabilities.

In fact, Goldwind reported an estimated hundreds of millions of yuan in losses associated with a delay in an overseas project for the January-June period.

Still, with massive government subsidies, Chinese manufacturers stand to emerge as leaders in wind power in the medium term just as they did in the solar panel industry, analysts project. While Japanese and German producers dominated photovoltaic modules at one point, today's global market is roughly 70% controlled by Chinese players, including Jinko Solar.

"No foreign companies can undercut Chinese manufacturers," said an official at a Shanghai trading company selling solar facilities.

Some wind energy companies in China have made building a track record more of a priority than their bottom line, said an executive at a European rival.

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