Top Chinese wind turbine maker Xinjiang Goldwind Science & Technology Co. has seen profits plummet by 98% as a price war in China in the wind power sector has driven the prices of turbines to the lowest levels ever seen.
Although China has seen the investment in renewable energy projects boom, competition between suppliers has intensified, causing wind turbine prices to begin a race to the bottom as each manufacturer attempts to be the last one standing in the potentially lucrative sector. In the process, profits have been plummeting, especially at China’s biggest manufacturer.
For the third quarter of 2023, Goldwind pulled in $1.28 million in net income, a 98% decline from the same period one year prior, according to a company statement which was quoted by Bloomberg on Thursday.
In addition, renewable technology firms in China have been coming under increased scrutiny from EU regulators, who fear if the bloc becomes too reliant on cheap Chinese renewable energy products, it will prevent the EU from developing a strong renewable clean-energy manufacturing industry.
On the global scene, there are additional challenges facing the wind power industry, as rising costs, increased borrowing costs, and supply chain issues have led to more projects which had been in the works being scrapped.
Siemens Energy initiated a review of its wind-power division in August, following an enormous hit it took to its earnings, as well as projected full-year revenues and profits as a result if difficulties at its Siemens Gamesa unit, which is among the largest wind turbine makers in the world. As a result of the review, the company was forced to withdraw the guidance for the division in September due to the problems with the wind turbines at Siemens Gamesa.
In August, Siemens Energy said, “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 shares plunged to al all-time low on Thursday, October 26th, plummeting by over 30%, following a statement by the company that it was holding discussions with various stakeholders, including banking partners and the government of Germany, in an effort to acquire guarantees for long-term projects.
By the early afternoon in Frankfurt on Thursday, over $3 billion of the market value of Siemens Energy was wiped out.
