Chinese offshore wind turbine manufacturers are leveraging their cost advantage to capture global market share, posing a serious threat to European competitors like Siemens Gamesa and Vestas. This aggressive pricing strategy is sparking debates over the localization of offshore wind manufacturing in Europe, the US, and across Asia-Pacific. Meanwhile, Taiwan is facing scrutiny from the European Union and the World Trade Organization (WTO) over its localization policies.
The Global Wind Energy Council (GWEC) reports that most of the new wind farms developed worldwide in 2023 have opted for Chinese-made turbines. China's wind energy production capacity now stands at 82 GW—four times that of Europe and well beyond its domestic needs.
Niels Steenberg, Chairman of Offshore Wind Operations Development at Siemens Gamesa for the Asia-Pacific region, noted the pervasive impact of Chinese competition globally, particularly on pricing.
China's low-cost wind turbines have made strong inroads into European markets, with similar trends observed in Japan and South Korea. This has prompted several countries to set ambitious localization targets. Japan, for instance, aims to source 60% of its offshore wind power domestically by 2040.
Steenberg acknowledged that Siemens Gamesa's Taichung nacelle assembly plant was initially established to meet Taiwan's localization requirements. However, the company quickly realized that relying solely on the Taiwanese market was unsustainable for the factory's long-term operations. The uncertainty and relatively small size of Taiwan's market led Siemens Gamesa to reposition the Taichung plant as a supply hub for the broader Asia-Pacific region. With Taiwan's offshore wind sector developing slowly and possibly facing contraction, exports have become a critical focus. Taiwan's eight domestic and international factories dedicated to offshore wind must pivot towards international markets to remain competitive.
While Taiwan's localization policies provide crucial support, Steenberg stressed that the future of these facilities hinges on transitioning beyond localization and towards export-oriented strategies. To secure a foothold in the global market, Taiwan's wind turbines must be competitive on both price and cost.
Siemens Gamesa's Asia-Pacific strategy involves not only supplying Taiwan's Hai Long Offshore Wind Project but also fulfilling orders from Japan and South Korea, though many projects are still awaiting final investment decisions. While Taiwan currently leads in offshore wind development, the combined market scale of Taiwan, Japan, and South Korea is expected to equalize by 2028, with each market projected to reach 1.5 GW in installed wind turbine capacity.
For instance, Round 3.2 of Taiwan's offshore wind development will involve 2.7 GW of projects. However, the success of these initiatives depends on developers securing stable investment sources. Steenberg likened the situation to a tripod foundation, saying, "It needs three legs—Taiwan, Japan, and South Korea—to be stable."
Discussing the cost differences between wind turbines manufactured in Europe and Taiwan, Steenberg noted that reducing costs hinges on whether the turbines are for domestic use or export. For export turbines, finding cost-effective suppliers is key. If Taiwan's supply chain can deliver high-quality products at competitive prices, Siemens Gamesa will turn to Taiwanese manufacturers.
Steenberg expressed hope that all components for export turbines could be sourced from Taiwan, emphasizing that the responsibility lies with the suppliers, not Siemens Gamesa.
