On a patch of land in northern Serbia, the development of one of Europe’s largest wind farms is a sign of the region’s efforts to meet clean energy targets. Yet the decision to pick a Chinese company to supply the turbines has caused alarm among domestic rivals.
Some fear Italy’s Fintel Energia’s use of Zhejiang Windey to supply turbines for the Maestrale Ring wind farm is part of a growing trend that threatens to repeat problems in Europe’s solar industry, where Chinese companies have undercut domestic groups on price, forcing many to collapse.
Although Chinese manufacturers account for just a fraction of Europe’s €57.2bn wind energy market, Brussels has launched an investigation into whether Beijing groups are using unfair state subsidies to slash prices to create a competitive advantage.
In April, EU competition commissioner Margrethe Vestager accused China of repeating the “playbook” in the wider clean technology sector, including big subsidies, that it has used to dominate the solar panel industry.
Pierre Tardieu, chief policy officer at trade group WindEurope that represents 550 renewable groups in the region, fears a “tipping point” where Chinese companies start to dominate the European turbine market, currently led by Denmark’s Vestas and Germany’s Siemens Gamesa.
“We believe very strongly that this would be very, very bad news for the European wind market and the European economy in general,” he added.
WindEurope, whose members include the region’s big turbine manufacturers, claim Chinese manufacturers are offering prices 40-50 per cent lower than European rivals and allowing developers to defer payments. It argues these prices are not possible without unfair public subsidies.
Last month, German asset manager Luxcara picked Mingyang, China’s fourth largest wind turbine maker by market share in 2023, as its preferred supplier of turbines for an offshore wind project.
Holger Matthiesen, Luxcara project director, said the models were “the world’s most powerful” and the deal would help the company “expedite Germany’s energy transition”.
In the UK, Swedish clean technology group Hexicon also chose Mingyang as its preferred supplier for its planned floating offshore wind project.
Other company bosses admit cheaper prices could persuade them to switch to Chinese suppliers.
“We don’t have any Chinese turbines, but if prices stay at these levels, I think you will start seeing more companies using them,” said Miguel Stilwell d’Andrade, chief executive of Portugal’s wind developer EDP, which is 21 per cent owned by China’s Three Gorges Power Corporation. “We will also consider them if they are more competitive.”
Ignacio Galán, chief executive of Spanish utility Iberdrola, added that the company tends to focus on local suppliers, but if Chinese manufacturers “are making reliable and competitive turbines, we would be ready to consider them as potential suppliers”.
In addition, analysts at Aegir Insights say a planned 250-megawatt floating offshore wind farm off the coast of Brittany, France, might not be feasible without cheaper turbines, likely to be Chinese or produced outside Europe.
However, the Chinese have a long way to go to catch up with their European rivals. Leading turbine producers Goldwind and Windey accounted for just 1 per cent of market share in Europe last year, according to the Global Wind Energy Council (GWEC).
Mads Nipper, chief executive of Danish wind and solar farm developer Ørsted, played down concerns of a Chinese threat to home turbine producers, when he told the Financial Times earlier this year that it was unlikely they would win significant market share in western Europe.
The Chinese Chamber of Commerce in the EU (CCCEU) insists that “technological competition and intense competition, not state subsidies, drive Chinese companies’ competitiveness”. It added that the EU’s investigation into Chinese subsidies has triggered “profound dissatisfaction and concern”.
China’s Zhejiang Windey backed the chamber, saying there were no “unfair and implicit state subsidies”.
It added: “We also call for a fair, open and transparent wind market without being manipulated by any single party. We just want to contribute to the global energy transition, with our experience and technology.”
GWEC, which has Chinese companies including Zhejiang Windey and Mingyang among its membership, agreed that maintaining “fair and transparent trade practices” was important in the face of measures launched by the EU to protect clean technology jobs against exports from Beijing.
The measures, which include the EU’s subsidies probe, have stoked worries that without Chinese technology the region could miss targets on carbon emissions. The EU has set tough climate targets that it estimates could cost €1.5tn per year in investment.
“If we in Europe follow a reshoring agenda, with import substitution and domestic manufacturing targets, we risk [ . . .] slowing down the energy transition in Europe as everything would become a little bit more expensive,” said Simone Tagliapietra, a senior fellow at the think-tank Bruegel.
“Instead of going against gravity and beating the Chinese or trying to compete with the Chinese on the economies of scale they’ve built, we would be better to focus on an innovation-driven industrial policy.”
Jonathan Cole, chair of GWEC but speaking in his capacity as chief executive of global wind developer Corio Generation, agreed. Shutting out Chinese businesses from the global supply chain would “significantly hinder” the ability to hit decarbonisation targets, he said.
“Positive fiscal policy designed to stimulate the growth of local supply chains is more likely to help meet our targets than a policy designed to discourage or exclude foreign suppliers,” he added.
Some European politicians also caution against too many barriers to Chinese companies. “We want cheap and fast and domestic production. We can only have two of those three. We should make a tactical choice,” said a senior EU diplomat.
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