China’s top turbine makers

A wave of consolidation has shaken up China’s wind turbine market over the past two years, reducing the number of manufacturers from roughly 80 in 2011 to about 20 last year.

The top 20 players (see below) now account for over 95% of the domestic market, while the top three — Goldwind, United Power and Sinovel — claim a combined market share of nearly 50%.

Bloomberg New Energy Finance (BNEF) suggests that the top five manufacturers from 2012 will probably continue to dominate in 2013. Goldwind is likely to lead the pack, followed by United Power, Sinovel, Ming Yang and XEMC-Darwind. But one relative newcomer, Envision Energy, could be poised to storm into the top five.

Goldwind

According to BNEF analyst Zhou Yiyi, Goldwind will again lead this year, with as much as 3GW of installed capacity in China.

In 2012, the manufacturer installed about 2.8GW of turbines, giving it a domestic market share of roughly 19%.

In response to grid congestion in northern China, there is a push to build projects in lower-wind-speed areas, particularly in the south. Here, Goldwind has a potential technological advantage, as it was the first Chinese company to produce an ultra-low-wind-speed permanent-magnet direct-drive turbine.

But the fact that the projects are being built in the south, where grid infrastructure is more developed, is not an advantage — Goldwind’s key production bases are in the north.

Macquarie Securities analyst Patrick Dai is unsure if Goldwind will remain dominant in 2013. “My view is probably not,” he says, noting that its biggest customer is Longyuan, a developer that is under pressure to buy turbines from sister company United Power.

United Power

Along with Longyuan, United Power is a unit of Guodian, China’s largest independent power producer. It installed 1.9GW of turbines in China last year, giving it about 13% of the market and overtaking Sinovel for the first time.

It has not disclosed how much capacity it shipped in the first half of this year, but a spokesperson tells Recharge that it delivered 467 turbines between January and the end of June, suggesting that it may be on track to match or surpass its 2012 installation total.

United Power is a potential “game changer” in 2013, and its gains may well come at Sinovel’s expense, says Dai.

Sinovel

Troubled Sinovel is the biggest question mark this year. The former top dog started losing market share in 2011 and has since fallen to third place. Last year, it claimed 10% of the Chinese market, with 1.5GW of installations.

However, a string of recent problems — including a China Securities Regulatory Commission probe into alleged violations of securities laws and a court battle over claims it stole intellectual property from former partner AMSC — have cast a pall over its future. It has explored a number of measures to return to profitability over the past year, including downsizing, altering its strategic priorities and restructuring its shares.

This year, Sinovel will probably rank third in terms of installations, says Zhou. The company still has the biggest accumulated capacity in China, more than 14GW. But its outlook beyond 2013 is extremely uncertain.

“Sinovel will be the Suntech of the wind sector,” says Dai, referring to the troubled Chinese PV manufacturer, which has filed for insolvency.

Within the next two years, it is possible that Sinovel will disappear from the Chinese turbine market. It could be acquired by a rival, or may be targeted for a reverse takeover, so it can reposition itself to make something other than turbines, Dai says.

Ming Yang

Last year, Ming Yang ranked fourth, installing about 1.5GW in China, up 27% on the year, to claim 8.7% of the market. This year, it expects to ship 2.5GW, with 400MW of that going overseas.

It shipped 161MW of turbines in the second quarter of this year, most of it in China, according to chief executive and chairman Zhang Chuanwei. The company said that by the end of the first half, it was on track to surpass its 2012 market share, based on tenders from the first half.

Dai says that Ming Yang, based in the southern province of Guangdong, is geographically positioned to benefit from the growing focus on new wind farms in the south.

XEMC

Shanghai-listed XEMC ranked fifth in China last year, installing about 1.2GW. The company, based in Hunan province, tells Recharge that it expects to install 1GW in China in 2013, but total contracted orders could reach 3GW for the year. It installed roughly 600MW in the first half of 2013.

It sells the bulk of its turbines in central and southern China, so the grid curtailment issue in the north will not significantly affect its business this year.

Envision Energy

Envision has only been in the industry since about 2008, but every analyst Recharge has spoken to flagged the unlisted, Shanghai-based turbine designer as one to watch this year.

“They will probably rank fourth to sixth — we’re not really sure at this stage,” says Zhou, adding that a significant portion of its gains this year are likely to come at the expense of Sinovel.

Envision ranked seventh in China last year, up from 13th in 2011. It installed 540MW in 2012, up 56% on the year, and expects to install 800MW-1GW in 2013.

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