2020 Ranking of China Wind Power Developers
The state-owned official power industry association, China Electricity Council (CEC), last month released a critical ranking regarding China’s wind power developers. and operation indicators for 2019 and the results of the National Wind Farm Production and Operating Indicator Competition.
The ranking, National Wind Farm Production and Operating Indicator Competition (“电力行业风电运行指标对标结果”) serves as a unique chance to look into the market structure of the Chinese wind power market.
The ranking—an routine move every year—this year evaluated performance data of 1878 wind farms of 47 wind power developer. These projects total 170.2GW capacity or some 92% of the country’s installed capacity.
Clearly, the list of wind power assets and the developers are not exhaustive. But it is a wonderful opportunity to understand the key players and the market dynamic.
Top-10 Wind Power Developers in China
The top-10 Chinese wind power developers listed in the ranking reflects the three most common wind players in China.
Below is the top-10 wind power developers.
Top-Five: China’s Tier-1 Power Generation Conglomerates
Evidently, the top-5 wind developers are also the top-5 power generation utilities in China.
Commonly referred to as the “Big-5” (五大发电集团), the five dominant wind firms are China Energy Investment Corporation (CEIC), China Huaneng, State Power Investment Corporation (SPIC), China Datang and China Huadian.
They are the largest power utilities in China, putting investment in all the power sectors. [Read More on the Five Top-Tier Utilities and Their 2019 Financial Result]
6-8 Placers: “Clean Power” Developers & Tier-2 Power Utilities
The five are followed by China General Nuclear (CGN), China Resources (CRC) and China Three Gorges (CTG), each with 12.05GW, 6.82GW and 5.28GW wind capacity.
Notably, they are also the “tier-2” power utilities in China—or known as “Small and Nobel Four” (四小豪门). [Read More on the Four Tier-2 Utilities in China]
The three are all “cross-overs,” each coming from a different power segment. CGN in history is a nuclear-power only developer; CRC used to be heavy on thermal. And CTG, as we mentioned, remains the largest hydropower developer in the world. [Read More: our in-depth break down of China Three Gorges ]
9-10 Placers: Private and Local Heavyweights
Tianrun New Energy Corp and Beijing Energy Corp are the last two of the top ten.
The former is a power development affiliate of Goldwind, the leading turbine maker in the country. The latter is a local-government back conglomerate with investment across fossil fuel, power, water, and other sectors.
The duo reflects two features of the Chinese wind market. Local government plays a critical role in China’s energy and power investment, and their direct-owned entities often involved in developing regional energy resources.
[Read More on China’s Local Government Owned Power Utilities]
Meanwhile, critical manufacturers along the value chain seek to invest in power assets to diversify their risk portfolio and balance industry down circles, as Tianrun’s case suggest. Besides Tianrun, other turbine makers Ming Yang and Envision are also active in building up their wind farm asset portfolio.
What to Know about the Top-10
- The heavy “polluters” are the biggest wind investors: although traditionally heavy on coal-fired power, the “Big-5” has been the key driver of China’s wind boom in the past decade and served as the main investor.
- State-owned players the absolute dominant: the top-10 ranking provides a telling clue to the fact that state-owned enterprises (SOEs) are the absolutely dominant force in the wind market. Except for Beijing Tianrun, all nine of the top-10 wind developers are state-owned or state-run.
- Wind used to Be More Attractive to the SOEs: Wind power investment appears to be a preferred option than solar for most of these SOEs. For the top-10 SOEs, more than 80% of their renewable portfolio is wind power. However, as previously mentioned, that market preference is changing and for the next 10 years, state-owned developers would become more serious about solar investment. [Read More: our analysis on SOEs’ investment in solar ]
The Full List of 47 Wind Energy Players
The ranking listed 47 wind companies in China. The list did not include all the players, certainly. Wind turbine maker Envision (who also owns some wind power asset), for instance, was not mentioned.
Nevertheless, the 47 provided a clue for the overall market dynamics.
We summarized the five categories of the 47 Chinese wind power development and their rough market shares:
- Central Government-Owned Power Utilities: Tier-one and tier-two players have dominated the wind market. Together, the “Big-5” and their central government-owned peers represent 83.4% of the total wind power assets in the list.
- Regional Energy Companies Owned by the Local Authorities: Total wind power installed capacity of these regional heavyweights is at 20.52GW, accounting for 12.06% of the national sum in the list.
- Wind Turbine and Equipment Manufacturers: Wind turbine and equipment manufacturers, such as Goldwind and Ming Yang Smart, are active in wind asset investment. But still, the OEM-background power developers only made up 3.89% (6.63GW) of the total installed wind capacity in the list.
- Private Independent Power Producers: Ningxia Jiaze Renewables Corp. is the solo private power producer enlisted in the ranking. With an installed capacity of 448.5 MW, it accounted for merely 0.26% of the total installed capacity of award winners. (There are much more private wind developers in China. But still, their market portion is relatively small.)
- International Developers: There has been limited participation of foreign capital in the list-only 0.39% of the national mix.
The shares of each category in the line are, more or less, in line with their portion in China’s total wind power mix.
Who to Work with: the Bottom Line
For companies seeking to get into the Chinese wind market, a critical step is to build up working connections with the wind developers. Choosing the right partnerships is often critical for foreign suppliers.
Central State-owned Players?
The SOEs are often time the best option for developing partnership. These companies own and operate a wide range of wind assets and are long-term renewable investors—driven not just on economic return but Beijing’s policy preference.
The policy-oriented investment means that they are committed to the long term and are more eager to test leading technology.
The apparent challenge of working with the SOEs, however, is that they are massive, with complex company structure. Identifying the right connections takes time.
Local Government-run Energy Players?
The local policy agenda and emphasis is always the key factor determining whether a local government-run energy developer would be open for cooperation.
Companies with international portfolios—such as Shenenergy from Shanghai— are certainly more open to foreign suppliers.
Private actors own a small portion of China’s wind projects. That means the market size is limited.
An established private developer could be a good option for international suppliers, as these companies are more sensitive to their efficiency and returns.
The downside is that private players are, often time, not the long-term investors for technology or assets.
Also, the fraction of private investment in China wind industry was further “diluted” by the direct or indirect corporate right of control from SOEs. A pertinent case is Goldwind, who is in part owned by China Three Gorges.
International Investors and Developers?
There is foreign capital in the sector, despite in a tiny share.
Foreign investments take place in various forms, including direct and indirect holding shares of domestic power generation groups. For instance, the Chugoku Electric Power Company (Japan), J-Power (Japan), Korea Electric Power Corp. (KEPCO), KEPCO Shanxi International (Hong Kong) together own 52% of the shares of Gemeng International Energy, a Sino-foreign joint venture backed by the Ministry of Commerce and the Shanxi Provincial Government.
In the past decade, the tiny foreign shares are diminishing as developers are selling off investment. For instance, Norway-backed NBT developed wind farms in the provinces of Inner Mongolia (100MW) and Jilin (50MW), of which majority shares were sold to China Datang.
The investment of EDF into China’s offshore wind sector was expected as a sign of a return of foreign capital. But EDF’s experience is not easy to repeat. And a lot more changes in China’s market set up and legal structure would need to happen for a larger group of foreign investors to return.