Financial Services Association, January 7 (Reporter Xiao Lianghua) The wind power market won a new high bid in 2023. According to incomplete statistics from Fengmang Energy, the OEM won a total of 697 bids in 2023 for a total of 106.9 GW fan purchases (including international projects, excluding frame construction), an increase of about 20% over the previous year. Beginning in the second half of last year, a number of companies won orders from Lufeng for 10MW models, and the stand-alone capacity of onshore models entered the double-digit era.

With the increasingly fierce price war in the machine industry and the acceleration of large-scale development, some third-tier OEM companies began to fall behind, and their market share was further concentrated. According to statistics from the Finance Association reporter, the share of winning bids in the 2023 TOP5 (top five companies in the industry) is close to 80%, which is a significant increase from about 74% in 2022.

Li Caiqiu, a veteran in the wind power industry, told the Financial Federation reporter that large-scale product development costs are high, difficult, and risky, and it is difficult to get orders if third-tier companies can't keep up with model development, causing them to slowly fall behind. However, a relevant person in charge of a leading company in the wind power industry said in an interview with a reporter from the Financial Association that most wind power equipment companies have a strong background. Although the industry is becoming more and more popular, nodal incidents such as withdrawals and mergers and acquisitions will not occur in the short term.

TOP5 accounts for about 80%

Regarding the bid data for complete wind turbines, Li Caiqiu analyzed that in 2023, the total bid scale for domestic wind turbines was close to or exceeded 110 GW, of which the public data exceeded 100 GW, while the complete machine companies and some undisclosed bid data exceeded 10 GW. Compared with 90 GW in 2022, the wind power bid scale continued to maintain a high growth trend, with an increase of more than 20%.

Judging from the winning bid situation, market concentration has further increased.

According to statistics from the Finance Association reporter, in 2023, the TOP5 won more than 10 GW of bids, with a total of more than 84 GW, accounting for 78.9% of all successful bids. The share of TOP5 winning bids last year was 74%. “If we add wind farms built by these companies themselves, this figure is even higher.” Li Caiqiu said.

Among them, Envision Energy won the most bids, over 24 GW; Goldwind Technology (002202.SZ) won more than 18 GW, and the amount won by the two companies did not change much compared to the previous year.

Yunda Co., Ltd. (300772.SZ) and Sany Heavy Energy (688349.SH), which implemented the low price strategy, reaped a lot in 2023. Among them, Yunda shares won the bid for over 17 GW and ranked third, and Sany Heavy Energy also surpassed 13 GW. The two companies won only 5.6 GW and 6.7 GW of bids last year, respectively.

Industry insiders told the Financial Federation reporter that in the case of onshore fans of 10 MW or more or offshore fans of 20 MW or more, the reliability requirements for the fans themselves are getting higher and higher, and the quality risks and development difficulties are becoming more and more difficult, so small enterprises are likely to lose their market.

Land wind fell below 1,000 yuan/kW

Wind turbine capacity was further expanded in 2023. In the second half of 2023, Dongfang Electric, Sany Heavy Energy, and Shanghai Electric successively won orders for 10MW models. The total project scale exceeded 2 GW, and the stand-alone capacity of onshore models entered the double-digit era.

The direct result of the rapid increase in the size of fans is lower prices. In the fourth quarter of last year, the lowest bid price for onshore fans fell below 1,000 yuan/kW.

At the end of 2023, Inner Mongolia Energy Group opened tenders for wind turbines (including towers) and ancillary equipment for the Aruhorqin 1 million kilowatt wind storage base project. The lowest bid price was 654 million yuan. After deducting the tower, the unit price was about 908 yuan/kW, falling below 1,000 yuan/kW for the first time, setting a record low in the bid unit price for land wind turbines.

However, many industry insiders believe that the current driving factor for wind turbine prices is mainly the increase in fan capacity, rather than simply the continuation of the “price war.” Larger wind turbines are not only an important way to reduce the cost and increase the efficiency of the whole machine, but also reflect the technical competitiveness of the whole machine manufacturer.

“Take an onshore wind turbine as an example. 15 years ago, a 2MW complete engine without a tower cost about 8 million yuan. Today, the price of a 10MW machine without a tower is about 10 million yuan, and the capacity has increased 4 times. The purchase price per unit capacity has dropped from 4,000 yuan/kw to 1,000 yuan/kw, a drop of 75%, but the price of each fan has remained stable.” Tian Qingjun, senior vice president of Envision Energy, told the Financial Federation.

Electric Wind Power (688660.SH) responded to investors on the investor relations platform on December 29. The winning bid price for onshore wind power has declined since the beginning of 2023. Prices for offshore wind power installations fell rapidly after the peak. Currently, it is impossible to determine whether the price bottom has been reached, but the industry as a whole hopes that market prices will remain reasonable and eventually return to a reasonable level acceptable to all parties after fluctuating and declining.

Five OEM companies went overseas for a total of 7.7GW

The rapid development of China's wind power industry chain and rapid expansion of production capacity have brought about an internal and tight competitive environment for the industry. Today, it is actively going overseas to seize overseas market share, and it has become a “common need” for enterprises in the wind power industry chain.

According to the “2023 Global Offshore Wind Report” issued by the Global Wind Energy Council (GWEC), the world added 8.8 GW of offshore wind power installations in 2022, with a total installed capacity of 64.3 GW; in the next ten years (2023-2033), the total number of new offshore wind power installations in Europe and the Asia-Pacific region will be 157 GW and 186 GW, respectively. Meanwhile, with the exception of China, the global offshore wind infrastructure's capacity satisfaction rate is less than 70%.

Currently, the gross margin of the overseas wind power market is higher than that of the domestic market. At the same time, compared to European and American peers, Chinese wind power companies have obvious advantages in terms of cost and technology.

This year, when OEMs get fan purchase orders, they will further open up the international market. International has won a total of 7.7 GW of bids, accounting for 7.2% of the total market. Sales regions include India, Laos, Vietnam, Kazakhstan, Brazil, etc.

Among them, Envision Energy “far ahead” and won nearly 6GW of international orders. In addition to Envision Energy, Yunda Co., Ltd., Mingyang Intelligence, Goldwind Technology, and CRRC Zhuzhou have also received a certain number of orders.

Tian Qingjun said that in 2022, Envision Energy's overseas orders will be 4GW, which will increase by a certain margin in 2023, and will continue to grow this year. “Vision itself is a company with international genes. It has laid out technology research and development, intelligent manufacturing, and renewable energy development and construction in more than 50 regions and countries around the world, and has a natural advantage in expanding overseas. The gross margin in the international market is high, and some international solutions can also be used by me to feed back the domestic market.”

Companies such as Goldwind Technology and Sany Heavy Energy have also stated many times that they should actively explore overseas markets. Goldwind Technology said on the investor interactive platform in December last year that the company has actively promoted an internationalization strategy over the years and has successfully developed the Australian market. Currently, the cumulative installed capacity in Australia has exceeded 1 GW.