By Charles Kennedy of Oilprice.com
Lower prices for turbines amid a price war in China have resulted in a 98% plunge in the net profit of the top Chinese wind turbine maker, Xinjiang Goldwind Science & Technology Co.
While investments in renewable energy projects in China are booming, intensified competition has led to a race to the bottom for wind turbine prices—a race that has dented profits at the biggest Chinese manufacturer.
Goldwind booked $1.28 million in net income for the third quarter of 2023, down by a massive 98% compared to the same period of 2022, a company statement quoted by Bloomberg showed on Thursday.
Chinese clean energy technology manufacturers have also come under EU scrutiny as the bloc fears cheaper products from China would undermine the European Union’s goals of having a strong EU clean energy manufacturing industry.
Globally, the wind power industry faces additional challenges. Offshore projects are being scrapped amid rising costs and interest rates and supply chain issues.
In August, Siemens Energy initiated a review of its wind business after taking a large hit to earnings and expected full-year revenues and profits due to problems at its unit Siemens Gamesa, one of the largest wind turbine makers in the world. At the end of June, Siemens Energy withdrew the profit guidance for the company due to problems with wind turbines at Siemens Gamesa.
“Following a substantial increase in failure rates of certain wind turbine components, an extended technical review suggested that significantly higher costs will be incurred than previously assumed to reach the targeted quality level,” Siemens Energy said in August.
On Thursday, October 26, Siemens Energy shares plunged by more than 30% to an all-time low after the company said it is in preliminary talks with different stakeholders, including banking partners and the German government, to ensure access to guarantees for long-term projects. More than $3 billion of Siemens Energy’s market value was wiped out by the early afternoon in Frankfurt today.