Early-2020 order wins in China for Siemens Gamesa and Vestas suggest traditionally ‘expensive’ Western wind equipment giants are gaining momentum against local rivals in a market where turbine prices have soared to 10-year highs.

Siemens Gamesa won a deal worth 160m yuan ($22.9m) with development giant Longyuan, according to a tender disclosure this week. The Spanish-German OEM was chosen as supplier for the 38MW Yanjing onshore project that China’s largest wind power producer is building in Fujian.

Siemens Gamesa won the order in competition with domestic supplier Envision, and notably with a bidding price about 3% lower than its Chinese rival.

The deal indicates a shifting dynamic in a market where Western groups traditionally play the role of ‘high pricers’ amid China’s current wind installation dash, Recharge understands from industry commentators.

Last year China saw a record 70GW of tendering for wind turbines, as its industry rushed ahead with projects to beat a policy deadline that will axe subsidies for onshore plants falling to connect to the grid by the end of 2020.

As demand for equipment skyrocketed, turbine prices soared in 2019. Analysis by Recharge of public releases of project tenders shows average turbine prices in December rounds exceeded 4,000 yuan/kW, up 25%-30% compared to the level in 2018 and a ten-year high.

The price increase reflects the limited supply capacity of domestic players, a factor that experts have already warned will be a roadblock to projects wanting to complete by the deadline, Recharge previously reported.

The rising demand also provides a window opportunity for the western OEMs to win more orders in China, traditionally a challenging market.

In January, Danish turbine giant Vestas defeated five Chinese OEMs to become the supplier to the 200MW Zhanhai onshore project developed by Heibei Construction Investment Corp. The win came just weeks after in-total 106MW orders from two Chinese clients announced by Vestas, which this week revealed it booked 515MW of orders there in 2019, up from 373MW in 2018.

In another sign of the trend, GE Renewable Energy flagged a record-breaking 1,215MW of onshore orders from the Chinese market in 2019.

Like the rest of Chinese industry, the wind equipment sector is currently hoping to restart after an enforced extended shutdown as a result of the coronavirus, with the CEOs of Vestas and Siemens Gamesa both commenting on the issue this week.

Wind

China wins for Siemens Gamesa and Vestas as West's turbine OEMs close price gap