The nacelle for Mingyang’s first MySE 12MW hybrid drive offshore wind turbine rolled off the production line in June 2022 (source: Mingyang)
Analysis by the Institute for Energy Economics and Financial Analysis (IEEFA) suggests that Chinese wind turbine manufacturer Mingyang Smart Energy could have a major effect on the global offshore wind market
As IEEFA energy finance analyst Norman Waite noted in a recent report, the offshore wind turbine industry has been split between China and the rest of the world, with different players in each. However, Mingyang appears poised to disrupt international, non-Chinese markets and do so at a vulnerable time for established competitors.
For the offshore wind market as a whole, however, Mingyang’s entry into non-Chinese markets is welcome. As a new competitor with world-class designs and ample capital at its disposal, Mingyang would help drive turbine sizes higher and offshore wind power prices lower. In 2021, the company launched the 16-MW MySE16.0-242 offshore wind turbine, which is due to enter commercial production in 2024. The nacelle for Mingyang’s first MySE 12MW hybrid drive offshore wind turbine rolled off the production line at the company’s manufacturing base in Shanwei, Guangdong province 1 June 2022.
Mingyang’s entry into international markets could therefore benefit a global offshore wind turbine industry currently dominated by three players – Siemens Gamesa Renewable Energy, GE Renewable Energy and Vestas.
“Mingyang is China’s most formidable offshore turbine supplier,” said Mr Waite. “Since 2020, one of out every five turbines installed offshore was a Mingyang model. The company has focused on developing technologies necessary to make larger offshore turbines and was the largest supplier of turbines larger than 5 MW in the world in 2021.
“The company runs a conservative balance sheet and has raised capital wisely. It has consistently maintained ample cash to fund R&D and business development. It earns most from its larger turbine sales as well, with an estimated US$1M margin on every 6 MW+ model.”
Mingyang is now preparing to venture out of China and recently raised equity in London that can be used to fund a turbine assembly and blade manufacturing facility in the UK.
“If Mingyang succeeds in investing in a UK production facility, the global offshore wind industry could change significantly by the end of this decade,” said Mr Waite.
“This couldn’t come at a worse time for incumbents like Vestas, GE, and Siemens Gamesa,” said Mr Waite. “All three have seen a drastic fall of operating margins in the wake of higher commodity and transport prices. Siemens Gamesa and GE are also both on the cusp of potentially significantly disruptive reorganization efforts.
“As Mingyang ventures abroad, it faces markets which are expected to add more a lot more capacity between 2025-30. Rather than defending its nearby East Asian neighbour markets, Mingyang has a chance to go big in the UK and potentially other continental European markets. If Mingyang is successful in this UK expansion effort, it could be a game-changer for the company and the global offshore wind industry.
“Mingyang has consistently led the way toward larger offshore units in China and appears like it will continue to do so,” says Waite. “It was the first to introduce 6.5MW, 8MW, and 11MW offshore wind turbines to the local market.”
Mr Waite also noted that in contrast to other Chinese turbine players, Mingyang has moved much of its production in-house. The company keeps external suppliers for redundancy, but does much of its production of blades, drive gearboxes, and other systems on its own to protect its intellectual property.
