The construction of one of Europe's largest wind farms in a corner of northern Serbia marks a push for the region to meet clean-energy targets, but the decision to choose a Chinese company to supply the turbines is worrying domestic rivals.
Some worry that Italy's Fintel Energia's selection of Zhejiang Windy to supply turbines for the Maestrale Ring wind farm is part of a growing trend that could rekindle problems in Europe's solar industry, where Chinese companies are underselling domestic groups, driving many into bankruptcy.
Chinese manufacturers account for only a small slice of Europe's 57.2 billion euro wind energy market, but Brussels has launched an investigation into whether Beijing groups are using unfair government subsidies to undercut prices to gain a competitive advantage.
In April, EU Competition Commissioner Margrethe Vestager accused China of repeating the “techniques” it has used to dominate the solar panel industry across clean tech, including heavy subsidies.
Pierre Tardiu, chief policy officer at WindEurope, an industry group representing 550 renewable energy organisations in the region, fears a “tipping point” is coming where Chinese companies will dominate the European turbine market, currently led by Denmark's Vestas and Germany's Siemens Gamesa.
“I strongly believe this would be very bad news for the European wind market and for the European economy as a whole,” he added.
EU Competition Commissioner Margrethe Vestager accused China of repeating a “playbook” it had already used in clean tech. © Ting Shen/Bloomberg
WindEurope, which includes the region's major turbine makers, claims that Chinese manufacturers are offering prices 40-50 percent lower than European rivals and allowing developers to defer payments – prices it says would not be possible without unfair public subsidies.
German asset manager Laxcala last month chose Ming Yang, China's fourth-largest wind turbine maker by market share for 2023, as its preferred supplier of turbines for offshore wind projects.
Luxkala project director Holger Matthiessen said the models are “the most powerful in the world” and that the contract would help the company “accelerate Germany's energy transition.”
In the UK, Swedish clean technology group Hexicon has also chosen Min Yang as a preferred supplier for its planned floating offshore wind projects.
Other executives acknowledged they could switch to Chinese suppliers if prices were lower.
“We don't have any Chinese turbines, but I think if prices stay at these levels, more companies will use them,” said Miguel Stilwell D'Andrade, CEO of Portuguese wind developer EDP, which is 21% owned by China's Three Gorges Power Corp. “If Chinese turbines are more competitive, we will consider them.”
Ignacio Galan, CEO of Spanish power company Iberdrola, added that his company tends to focus on local suppliers but is “open to considering Chinese manufacturers as potential suppliers if they produce reliable and competitive turbines.”
Moreover, analysts at Aegir Insights said a 250-megawatt floating offshore wind farm planned for the coast of Brittany, France, may not be viable without cheaper turbines, possibly made in China or outside Europe.
But China still has a long way to go to catch up with its European rivals: The major turbine makers Goldwind and Windy held just 1% of the European market share last year, according to the Global Wind Energy Council.
Mads Knipper, chief executive of Danish wind and solar farm developer Orsted, played down concerns about the Chinese threat to domestic turbine manufacturers, telling the Financial Times earlier this year that it was unlikely to gain significant market share in Western Europe.
“It is technological warfare and fierce competition, not state subsidies, that drives the competitiveness of Chinese companies,” the China Chamber of Commerce and Industry in the EU (CCCEU) said, adding that the EU's investigation into Chinese subsidies had caused “deep dissatisfaction and concern.”
China's Zhejiang province lawmaker Windy supported the chamber, saying there was no “unfair implicit state subsidy.”
“We also want a fair, open and transparent wind market that cannot be manipulated by any party. We just want to contribute to the global energy transition with our experience and technology,” he added.
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The GWEC, whose members include Chinese companies Zhejiang Windy and Mingyang, agreed it was important to maintain “fair and transparent trade practices” in the face of measures introduced by the EU to protect clean tech jobs from exports from Beijing.
The measures, including an EU subsidy investigation, have stoked fears that without Chinese technology the region may not be able to meet its carbon emissions targets, with the EU setting tough climate targets that are estimated to cost 1.5 trillion euros a year in investment costs.
“If Europe follows a reshoring policy with import substitution and domestic manufacturing targets, it risks making everything a little more expensive and slowing down Europe's energy transition,” said Simone Tagliapietra, a senior fellow at the think tank Bruegel.
“Instead of trying to defy gravity and beat China or compete with them on the economies of scale they've built, we would be better off focusing on innovation-led industrial policy.”
Jonathan Cole, chairman of the GWEC and speaking in his capacity as CEO of global wind power developer Corio Generation, agreed: Cutting Chinese companies out of global supply chains would “severely hinder” the ability to meet decarbonization targets, he said.
A production line at Mingyang's facility in Dongfang, China. Some company executives acknowledged they might switch to Chinese suppliers because of cheaper prices © Wu Wei/VCG via Getty Images
“Aggressive fiscal policies designed to stimulate the growth of domestic supply chains are more likely to help us achieve our goals than policies designed to block or exclude foreign suppliers,” he added.
Some European politicians have also warned about too many barriers for Chinese companies. “We want cheap, fast and we want to produce domestically. We can only have two of those three. We have to make a strategic choice,” said a senior EU diplomat.
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