China’s Ming Yang Smart Energy (MYSE) wants to develop a 15MW offshore wind turbine and 10MW floating machine using 6bn yuan ($850m) raised by a planned share issue, the company told investors.
Plans for the 14-15MW prototype turbine – which would be among the largest designs underway in the world – and the super-sized floating model were revealed along with proposals for more wind farm investments as Ming Yang seeks to embark on its third and largest fundraising in 15 months, following an initial public offering (IPO) in January 2019 that raised 2.5bn yuan and a 1.7bn yuan convertible bond issuance just four months ago.
The scale of the proposed issue – larger than the two previous rounds combined – at a time of market uncertainty created intense discussion among financial commentators in China.
The firm plans to allocate the largest part of the capital to be raised, 27% or 16.3bn yuan, to building an offshore wind manufacturing facility, which aims to eventually make 14MW-15MW turbines at a production capacity of 300 turbines per year, said a prospectus for the private placement, which still awaits regulatory approval.
While the 10MW floating machine development could take 36 months, Ming Yang did not provide a schedule for the potential 14MW-15MW R&D.
The rest of the funding will be used to pay back loans as well as new investment in five onshore wind farms.
The plan shows Ming Yang’s continuing focus on developing double-digit wind turbines and a floating foundation.
Ming Yang has come up with a semi-submersible and “an innovative floating” design after initial research, according to the prospectus.
China plays supersized catch-up
The fundraising comes against a backdrop of stiff competition among turbine OEMs in China and globally to develop super-sized wind turbines, and a burgeoning Chinese interest in floating wind.
Last year, GE put up the world’s first 12MW turbine prototype in the Dutch port of Rotterdam, setting a new industry benchmark. Siemens Gamesa has delivered an upgraded 11MW turbine model and is working on technology expected to pave the way for 14-16MW machines entering service.
Chinese OEMs have so far been a few steps behind. Dongfang Electric unveiled the country’s first 10MW turbine prototype in the second half of last year, but the largest machine put into test in China is an 8MW turbine manufactured by Shanghai Electric.
Ming Yang is among a handful of Chinese players pushing for double-digit turbine development. The firm erected a 7.25MW turbine last February and hailed the launch of a new product with “8-10MW capacity range” late last year, although that has not yet been installed. R&D for a 10MW prototype appears to be ongoing, as the prospectus of its convertible bond issued last December indicates.
Ming Yang has teamed with wind developer China Three Gorges (CTG) to develop a floating turbine, which if successful could be installed in CTG’s Yangjiang Offshore Wind Farm. The local government of Guangdong province, Ming Yang’s home-base, initiated the project by providing R&D funding, Recharge understands from industry sources close to the matter.
Zou Libing, vice engineering chief of the MYSE Research Institute last year told Recharge that the Yangjiang floating project, being touted as “the first national demonstration of floating wind”, would “soon” begin development in the waters off Yangjiang city and be online “in three years”.
At that stage the pilot was based on a semisubmersible platform concept being developed by the firm around one of its 5.5MW model machines, with the OEM tasked with delivering the integrated design of the turbine, floater and a mooring system, according to Zou.
But as the recent fundraising prospectus shows, the OEM and the local government have apparently shifted gear to a larger model.
Slated to become China’s largest market for offshore wind, Guangdong province has a longer-term plan to develop what it describes as “deepwater” sites, which could accommodate 57GW of turbine deployment.
These sites have average water depths of 35-50 metres, which is still below the 50 metres-plus at which floating is generally reckoned to offer clear economic advantages over fixed-bottom deployment. However, the challenging seabed conditions in China’s Guangdong and Fujian province could potentially change the economics of fixed bottom application in these waters.
Ming Yang still faces domestic competitors in floating turbine R&D.
CSIC Haizhuang, a turbine affiliate of the world’s largest shipbuilder, has moved ahead a floating wind demonstration in nearby Guangdong city Xuwen. The project secured funding from China’s Ministry of Industry and Information Technology and has teamed up with Shell-owned French floating developer Elofi.
Separately, the Shanghai government is supporting another floating wind pilot in its offshore territory, which was expected to begin construction by 2019 but has been delayed. Shanghai Electric is the turbine supplier for the project.
