China Wind Energy Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

China Wind Energy Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

China Wind Energy Market is expected to reach 388.16 GW of installed capacity by the end of this year and is projected to register a CAGR of over 12.39% during the forecast period.

The market was slightly negatively impacted by COVID-19 in 2020. Presently the market has reached pre-pandemic levels.

Key Highlights

• Over the long term, factors such as an increase in environmental awareness, government regulations, and decreasing cost per kilowatt of electricity generated through renewables are expected to drive the market. Rising demands for renewable energy projects within the country are expected to propel the growth of the wind energy market during the forecast period.
• On the other hand, the high competition from other energy sources such as solar, hydro, and fossil fuels is expected to restrain the growth of the market.
• Many of the provinces in the country have ambitious official targets, such as Guangdong's plans to build 30 GW of offshore wind by 2030, followed by Jiangsu (15 GW), Zhejiang (6.5 GW), and Fujian (5 GW). Other coastal provinces, namely Liaoning, Hebei, Shandong, Shanghai, Guangxi, and Hainan, also have their own offshore wind development plans, although their targets are much lower than the four leading provinces. This is expected to provide opportunities for the market players.

Key Market TrendsOffshore Segment Expected to Witness Significant Growth

• Offshore wind energy power generation technology has evolved over the last five years to maximize the electricity produced per megawatt capacity installed to cover more sites with lower wind speeds. Besides this, in recent years, wind turbines have become larger with taller hub heights, broader diameters, and larger wind turbine blades.
• With a coastline of approximately 18,000 km, China has more than 1,000 GW of technical potential for offshore wind at the hub height of 90 meters. Currently, China has no long-term national offshore wind target, but coastal provinces have set ambitious official targets.
• In 2021, new offshore wind power capacity tripled globally, owing to China’s rapid expansion, reshaping the offshore wind sector. According to the Global Wind Energy Council (GWEC), China is expected to host more than a fifth of the world’s offshore wind turbines, equating to approximately 52 GW of offshore wind by 2030.
• China’s expansion in 2021 alone accounted for roughly 40% of the total 57.17 GW of offshore wind power installed globally. In 2021, the country installed 16.9 GW of offshore wind capacity, accounting for 80% of the total, more than quadrupling the volume in 2020. Also, the Chinese manufacturers are poised to break out of the domestic market and compete with their European rivals for worldwide sales. Through a similar process, China overtook the global solar panel industry.
• In global offshore wind installations, China contributed 80% of that growth, a fourth year in which China has led the way. This growth was driven by a Feed-in tariffs (FiT) cutoff at the beginning of 2022. In China, offshore wind projects must be commissioned by the end of the year 2021 to qualify for the FIT, which has caused an installation rush as developers hurry to finish their projects.
• In May 2022, China deployed its largest floating wind turbine as part of a project designed to advance the technology and demonstrate the capabilities of floating wind power generation. Known as Fuyao, the floating platform was towed from Maoming in Southern China into a position more than seven miles offshore in the South China Sea.
• Therefore, offshore wind energy is expected to grow fastest in the coming years, with additional investments in the segment.

Rising Demand for Renewable Energy Expected to Drive the Market

• China is the largest energy consumer and renewable energy market globally, and the country has been rapidly expanding its renewable energy capacity to satiate its domestic energy demand. As the country has been suffering from air pollution caused primarily by fossil-fuel-fired power plant emissions, the country has focused on expanding its renewable energy capacity to meet its growing energy demands while reducing overall emissions.
• According to China Energy Portal, during 2014-2021, China’s total installed wind capacity registered a CAGR of 15.71%. As part of its 14th five-year plan (2021-2025), the country aims to supply 33% of national power consumption by 2025 and for non-hydro renewables to contribute 18%. Additionally, the country aims to increase renewable energy generation to 3,300 TWh by 2030.
• In its latest updated Nationally Determined Contributions (NDC), as part of its commitments made under the Paris Agreement, China has committed to reach peak emissions by 2030 and achieve carbon neutrality by 2030. In terms of energy targets, the country aims to cut C02 emissions per unit of GDP by more than 65% from 2005 levels and increase the total installed wind+solar capacity to 1,200 GW.
• According to CarbonBrief, based on the rapid growth of the renewable energy industry in the country, it is estimated that China will reach its target of 1200 GW of wind+solar deployment significantly ahead of its 2030 deadline. Such rapid growth in the installed wind energy capacity is due to the rising demand created as a result of environmental commitments, and the rising domestic energy consumption is expected to drive the wind energy market during the forecast period.
• Further, China’s provinces have set up individual targets for renewable energy projects as a part of national targets. The largest targets have been set up by the northwestern provinces of Inner Mongolia and Gansu to leverage the presence of large tracts of uninhabited desert lands. These two provinces plan to add a cumulative 190 GW of wind and solar projects by 2025, in addition to the 74 GW of installed capacity as of May 2022. These provinces are followed by Shaanxi, Hebei, and Shandong, which have planned to install 190 GW of new solar and wind capacity additions during 2021-2025.
• Coastal provinces in China have been focused on the development of new offshore wind capacity. Guangdong aims to install 18 GW of offshore capacity by 2025, while Fujian, Zhejiang, and Jiangsu are aiming to install 13.3GW, 6GW, and 9GW of offshore wind power projects by 2025, respectively.
• Shandong has aimed to add 35 GW of offshore wind power capacity by 2030 while starting the construction of 10 GW of projects and adding 5 GW of projects to the grid by 2025. The island province of Hainan has been permitted by the National Energy Administration (NEA) to build 12.3GW of offshore wind by 2025.
• Thus, the growing investment from the state-owned companies and favorable government policies in wind energy generation is expected to drive the growth of the China wind energy market during the forecast period.

Competitive Landscape

The Chinese wind energy market is fragmented. Some of the major players in the market (in no particular order) include Xinjiang Goldwind Science & Technology Co. Ltd, ENVISION GROUP, Shanghai Electric, Dongfang Electric Corporation, and Mingyang Smart Energy Group Limited among others.

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