China’s competitiveness as a wind turbine manufacturing location outperforms the US and European countries, according to the latest fDi Benchmark study, despite Western producers leading the global market.
The country has placed first in fDi’s latest assessment, followed by the US, the UK, India and Germany. Of the top 15 global wind turbine manufacturers in 2022, according to Blackridge Research, 10 are Chinese — the biggest being Goldwind, Mingyang and Envision.
The dominance of Asia’s biggest economy in wind turbine manufacturing comes as a result of the long shadow cast by the Chinese government’s push to develop the entire wind supply chain amid ambitious renewable energy targets. As of 2021, China’s installed wind turbines account for more than half the world’s onshore and offshore capacity.
The study, based on fDi Intelligence proprietary data and models, benchmarks the top 61 countries that have received the highest number of FDI projects in the wind energy cluster (both wind turbine manufacturing and wind generation) between January 2003 and December 2022. The aim of this is to find the locations with the best quality/cost profile for setting up a wind turbine manufacturing facility employing up to 75 persons. The model allocated a 75% weight to quality and 25% to cost factors.
With strong infrastructure in place, China pips the US to the post on overall quality, even if its industry cluster (size, specialisation, research and development capabilities) is slightly inferior to that in the US. The UK, which ranked third, featured the best general business environment, while India, in fourth, had the best labour availability and quality.
Danish Vestas, Spanish-headquartered Siemens Gamesa and French-headquartered GE Renewable Energy remain the top three global manufacturers.
Meanwhile, the US, which placed second, showcases the Western world’s longstanding competency in wind technology. Due to a historically robust ecosystem — and the presence of market leaders such as Vestas, GE Renewable Energy (a subsidiary of US multinational General Electric) and others — the country has received the highest number of greenfield foreign direct investment (FDI) projects in terms of both wind turbine manufacturing (49) and wind generation (230) between 2003 and 2022. In particular, Vestas, the world leader in wind turbine manufacturing, invested half of the FDI it mobilised worldwide into the US for the production of wind turbines between 2003 and 2022, according to fDi Markets.