Financial Services Association, April 11 (Editor: Feng Yi) Today, the Hong Kong wind power sector bucked the trend. Against the backdrop of negative EU trade investigations, many wind power stocks have instead reached new highs.

As of press release, Dongfang Electric (01072.HK) rose nearly 8%, hitting a new high during the new year. Xintian Green Energy (00956.HK) and Jingneng Clean Energy (00579.HK) both rose by more than 1%, while Longyuan Electric (00916.HK) and Goldwind Technology (02208.HK) followed suit.

According to the news, recently, three national ministries and commissions jointly issued the “Notice on Organizing and Implementing the “Operation to Control the Wind in Thousands of Villages”, which emphasizes that during the “14th Five-Year Plan” period, no more than 20 MW wind power projects per village will be built in administrative villages where conditions are available.

According to estimates from Haitong Securities analysts Wu Jie and Xu Baiqiao on April 9, there are currently 690,000 administrative villages in the country. It is conservatively assumed that only 10% of administrative villages meet the conditions. Based on the 10MW installed capacity per village, the country can increase 690 GW of wind power installations; if only 1,000 villages are launched for pilot projects in 24, based on 10-20 MW/village calculations, it is expected that about 10-20 GW of distributed land wind installations will be added in 24 years.

According to data, in 2023, the world added 118 GW of wind power installed capacity, of which 77 GW of wind power was added in China, accounting for 65% of the world's total installed capacity. According to this estimate, the above policy brought about a significant increase in potential incremental demand of 10-20 GW.

Furthermore. Recently, the European Union announced an investigation into Chinese wind turbine suppliers suspected of gaining an “unfair advantage” in the European market through foreign subsidies, which has also attracted market attention.

The main head of the Trade Remedies Bureau of the Ministry of Commerce immediately met with Martin Lucas, director of the European Commission's Trade Defense Department, in Brussels on April 10 to immediately make serious discussions on issues such as the EU investigation and the release of another report on “serious distortions” in the Chinese economy.

It should be noted that although the domestic market is still the largest wind power market in the world, the impact of trade barriers from the European Union should not be underestimated. Previously, the EU's plans to upgrade its power grid once made the market continue to be optimistic about wind power in 2024.

In November of last year, there were reports that the European Commission would develop a plan of up to 584 billion euros to comprehensively overhaul and upgrade Europe's power grid. Last year, the EU's share of wind power surpassed natural gas for the first time, adding 17 GW of installed wind power capacity across Europe, which is also the biggest increase in the EU's history.

According to a report by Ember, a British energy think tank, if the EU is to achieve its goals, the EU will almost need to double its new fan capacity to reach more than 30 GW per year by 2030. This is equivalent to a quarter of the world's installed wind power capacity in 2023.

However, on the other hand, since 2024, news of domestic offshore wind power projects has continued, the restart trend has been determined, and seabreeze projects in Jiangsu, Guangdong, Shandong, Fujian, Hainan, Shanghai, and Liaoning have started one after another.

The Cinda Securities Telecom team pointed out in this week's industry report that onshore wind power has entered a stage of steady and affordable development, while the early restrictive factors for offshore wind turbines have clearly been mitigated, and tenders have returned to the boom zone. The wind power industry's off-season was not easy in the first quarter. Looking ahead to 2024-2025, or ushering in a relatively rapid seabreeze construction period, the orders and profits of related companies may be clearly reflected.

Cinda Securities believes that in the medium to long term, factors such as deep-sea wind construction may be accelerated, the 15th Five-Year Plan is expected to be more active, and progress in going overseas are all expected to drive the development of the industry for the better.

One interesting piece of data is that Giles Dickson, CEO of the European Wind Energy Association, said on April 9 that the price of Chinese fans in Europe is 50% lower than that of fans manufactured locally in Europe, and that payment can be delayed for up to three years. This also reflects the advantages that domestic wind energy companies have when going overseas.