Offshore Wind Group Looks to Challenge China’s Dominance of Sector

Countries active in the offshore wind industry continue to consider steps to counter China’s dominance of the sector. The latest to announce a move is South Korea, where officials recently announced they may work with a global offshore wind industry group in order to better compete with China.

Officials have said joining the Global Offshore Wind Alliance (GOWA), perhaps as soon as this year, would help South Korean companies increase their presence in the offshore wind equipment manufacturing market. Reports on July 7 said Korea’s Ministry of Trade, Industry and Energy is scheduled to sign on with the GOWA in the second half of 2024. The GOWA, founded by Denmark, the International Renewable Energy Agency (IRENA), and the Global Wind Energy Council (GWEC), was formed in November 2022 during the COP27 conference in Egypt.

GOWA has 20 member states, including the U.S., the European Commission, and the UK. Among the group’s missions is to counter China’s dominance in offshore wind through supporting domestic equipment production and providing subsidies to local companies.

Global Leader in Offshore Wind

China continues to pace the world’s offshore wind power industry, with installations of 18-MW turbines at two different sites during June. One project is in northeast China, in Liaoning Province, where testing began June 30 on turbines installed there. The power from that site will be used to serve Yingkou City. State-owned power generator Dongfang Electric Corp. on June 5 announced it completed installation of similar turbines at a coastal test base in Shantou, in Guangdong Province.

The 18-MW turbines are to date the world’s largest by power rating to enter service. The turbines have a 260-meter, or 853-foot, rotor diameter, and a swept area of 53,000 square meters, or 570,487 square feet. Officials said the turbines are expected to generate 72 GWh of electricity annually.

Envision Energy in June announced it had connected its EN-256/16.7 prototype to the power grid in Sheyang, China, which was briefly the world’s largest to produce power. The first EN-256/16.7 unit rolled off the production line at the Sheyang Zero Carbon Industrial Park in January of this year.

China accounts for about half of the world’s installed offshore wind power generation capacity, with the country ranking first globally for at least the past four years. Chinese manufacturers continue to design larger turbines, rapidly increasing the technology’s size after China Three Gorges Corp. brought the first 16-MW offshore wind turbine online in July 2023.

20-MW Unit in Design

Mingyang, headquartered in Zhongshan, Guangdong, China, in December of last year said it was designing a turbine that could offer as much as 20 MW of power, with a rotor diameter of as much as 958 feet, and a swept area equivalent to the size of nine soccer fields. Luxcara, a German-based renewable energy asset manager, recently announced it has signed a preferred turbine supplier agreement with Mingyang for Waterkant, an offshore wind farm sited in the North Sea. Reports said the agreement is for 16 of Mingyang’s turbines, each with up to 18.5 MW of generation capacity.

Luxcara said it launched an international tender for Waterkant’s equipment late last year. The company in its selection announcement said it chose Mingyang’s turbines after “an extensive due diligence exercise, covering the supply chain, ESG [environmental, social, governance] compliance aligned with the EU [European Union] taxonomy, and cybersecurity supported by independent experts from renowned international advisers.”

Germany also is a GOWA member, and German officials have said they will look at the security and competition aspects of the Waterkant project using Chinese-made turbines. A spokesperson for Germany’s economy ministry told Reuters, “The federal government will look at this decision very closely. On the one hand, in relation to the question of critical infrastructure. On the other hand, the level playing field must be maintained in relation to competition.”

WindEurope, the European wind power industry’s lobbying group, also called for the deal to be scrutinized, saying in a statement: “Germany and the European Union must consider whether they see wind energy as a strategic sector before it is too late.”

GOWA Membership

A Korean government official said the decision to join GOWA makes sense, because “Korea has all the value chains for offshore wind power plants. We are expected to benefit the most from the U.S. and Europe’s moves to exclude Chinese products.”

Paul DeCotis, senior partner at consultancy West Monroe, told POWER: “Membership in GOWA will help member countries accelerate interest in, and development of, offshore wind resources. By facilitating information and knowledge transfer and lessons learned among the member countries GOWA is providing foundational support for joint ventures, agreements to share and mitigate risks, and ensure responsible development with sustainability and ecosystem stewardship in mind.”

DeCotis continued: “Understanding supply chain constraints and materials sourcing and having greater visibility into geopolitical risks to meet offshore wind demands will expedite development.”

Four Chinese companies, including Mingyang, are among the world’s five largest original equipment manufacturers of offshore wind equipment, according to the Global Wind Energy Council (GWEC). The GWEC said recently that China increased its global share of the new wind turbine market to 65% in 2023, up from 53% in 2021. The group said that figure is probably closer to 70% when equipment such as foundations and towers is included.

South Korea was asked to be an original member of GOWA, but declined over concerns that some Korean companies would then be excluded from the Chinese market. Officials, though, have said they are reconsidering as more China-based companies are doing business in South Korea. Vensys Energy AG, owned by China-headquartered Goldwind, is set to supply all 64 turbines for a 365-GW South Korean offshore wind farm currently under construction. Heongtong Group, the largest power and fiber optic cable manufacturer in China, has been chosen to provide the submarine cables for the wind farm. South Korean officials also have said concerns about an escalating trade war between the U.S. and China support joining GOWA.

The Korea Economic Daily reported that an industry source in South Korea said, “GOWA indicates the global wind power market will be divided to reduce Chinese influence. The government’s decision to join the alliance signals Korea’s breakup with the Chinese market.” Officials in Korea also think it would attract more equipment manufacturers to that country, noting that Danish wind turbine maker Vestas Wind Systems A/S, a private member of GOWA, relocated its Asia-Pacific headquarters from Singapore to Korea in September of 2023.

Choi Deok-hwan, head of international cooperation at the Korea Wind Energy Industry Association, told the Korea Economic Daily, “Through GOWA, cooperation will be elevated to a national level from a corporate level. Opportunities for large deals will increase.”

—Darrell Proctor is a senior associate editor for POWER (@POWERmagazine).