Harbin Electric – one of China’s biggest electrical equipment groups – looks set for a return to the wind turbine sector after taking control of fallen OEM star XEMC Windpower.

Harbin earlier in November concluded a deal with the Hunan provincial government — the current main shareholder of XEMC Windpower — to co-operate over “restructuring” the Chinese turbine manufacturer and wind resource development.

Details of the restructuring have yet to be announced, but several industry sources told Recharge that the Heilongjiang-based electric group intends to acquire 51% of the wind OEM and become its key shareholder.

XEMC Windpower in 2019 fell out of China’s top-10 OEM ranking for the first time in years, with 687MW of new installed capacity, according to the annual report of the China Wind Energy Association.

As well as reviving XEMC, the deal could mark a comeback by Harbin Electric to China’s huge – and hugely competitive – wind turbine market.

With a strong focus on the coal, hydro and nuclear power sectors, the group is one of China’s three largest electric equipment suppliers, next to peers Dongfang Electric and Shanghai Electric.

Harbin previously tip-toed into then out of the nascent Chinese wind market from 2002 and developed several turbines ranging from 10KW to 1.2MW, but those efforts stopped after 2006.

Harbin Electric has also previously teamed up with US giant GE for turbine development. But the duo’s joint venture did not achieve major commercial success, with no further progress after the releases of a 2.75MW onshore turbine and a 4.1MW offshore machine.

In XEMC Windpower’s case, its heyday saw the firm in the domestic top-five during 2012-2014 and it once made it to the global top-10 in 2014.

However, amid drastic competition and consolidation in the Chinese wind market, the OEM’s market share has shrunk to just 2.6% from 7.6% five years ago.

The fall put a strain on the OEM’s profitability and led to the decision of its former mother company — Xiantang Electric Manufacturing Corp — this February to sell off 100% of the subsidiary, Recharge previously reported.

While initially having no luck in finding a new buyer, the wind group was taken over by Hunan’s local government in June via its wholly-owned capital investment firm, a move that sources in XEMC Windpower said was only a temporary solution.

The wind OEM now hopes for new capital investment and momentum through the deal with Harbin Electric, allowing it to compete in a market dominated by the likes of Goldwind, Ming Yang and Envision.

XEMC Windpower is one of the few domestic suppliers in China that offers a large offshore turbine, with 71MW in the sea, in part thanks to the firm’s acquisition of the Dutch turbine company Darwind back in 2009.

The OEM has brought 4MW to 8MW direct-drive products to the market and, in recent years, unveiled plans to develop double-digit turbine and floating designs.

Wind

Chinese giant Harbin eyes comeback for fallen wind turbine star XEMC