A recent article in Cleantech magazine charted the fortunes of the share prices of the incumbent wind turbine manufacturers head quartered in Europe. It was not comfortable reading for most involved. Large-scale redundancies at Vestas have been well publicised in recent times, as well as, cancellations of factory build-outs and a scaling back on research and development investment. Meanwhile, Siemens has reported figures that reflected both their investments in recent times but also a lower than expect sales performance in the wind sector.
In the meantime, Ming Yang has announced investment in a state-of-the-art facility in the US and a joint venture development agreement in Bulgaria worth over €125 million in total. Another Chinese OEM, XEMC Darwind has also announced a joint venture development agreement in Ireland to establish their turbines in a European setting and build confidence in their technology. Elsewhere, Goldwind has seen strong growth in a number of markets, while Envision Energy have had an R&D facility in Denmark for almost three years now and look set to make further investments in European markets in the near future.
The economic crisis in Europe has seen unprecedented pressure on all governments to slash subsidies across many technologies, including wind, leading to an even more intense focus on reducing the cost of energy produced both onshore and offshore. Lower manufacturing costs in China, access to cheaper capital from their state-owned financial institutions, and wind technology that is increasingly achieving European quality standards means these companies can no longer be ignored as cheap imitators. The risk to developers in not embracing this new wave of Chinese manufacturers and working with them to achieve a lower cost of energy could soon provide the tipping point that will see large-scale uptake in European markets.
There is a little way to go before this happens with regards consolidation within the 100 Chinese manufacturers seeking to crack this market today but, in our opinion it may not be as far away as one may think. So, what are the implications for employment? In our opinion not as bleak as the above supposition would indicate. It is not commercially viable to ship all components from China once volume sales are achieved, and therefore these products will be manufactured in Europe. The high-end engineering skills base is still in Europe and will remain here for some time; not least to add credibility to the product. For these organisations to succeed, it will therefore be essential that they have local operations and maintenance support to offset the perceived availability risk for developers.
In conclusion, the success of a handful of more cost effective and reliable Chinese machines will be good for the industry in Europe and the impact on jobs should be positive as opposed to negative as the lower cost of energy brings previously unviable projects in low wind speed areas back on to the table.
