China

China

Production 'returning to normal' amid coronavirus outbreak

Turbine production is on the increase in China following the outbreak of the Coronavirus (COVID-19), according to an industry survey by national and global wind sector groups.

Travel restrictions and quarantines caused by the coronavirus have hindered wind turbine production (pic: NIAID-RML)
Travel restrictions and quarantines caused by the coronavirus have hindered wind turbine production (pic: NIAID-RML)

Google Translate

In a joint statement, the Global Wind Energy Council (GWEC) and the Chinese Wind Energy Association (CWEA) wrote that they believe supply chain disruptions and installation delays caused by quarantines and travel restrictions will be “moderate and focused in certain geographic regions”.

The industry groups did not provide a forecast for how much capacity might be affected but added the slowdown will “not be as significant” as Wood Mackenzie’s prediction that installations could be halved if the epidemic continues into the middle of the year.

Outlook

GWEC expects China to remain the world’s largest wind power market in 2020 having previously forecast 28GW of onshore capacity and about 4GW offshore to be added this year.

Like Wood Mackenzie, GWEC and CWEA argued the impact of COVID-19 on wind power installations in 2020 will depend on how soon it can be contained — which the World Health Organisation suggested is “impossible” to predict.

“If the virus outside of Hubei province is more or less under control by mid-March, we can expect a roughly two-to-three month delay in executing China’s wind energy project pipeline," GWEC and CWEA said.

“If the spread of the virus continues to grow beyond March, the delay period may be extended." 

Tariff extension

China’s onshore wind feed-in tariff is set to expire on 31 December 2020 — with projects approved beyond this date unable to claim support.

The country’s five largest utilities have reportedly requested an extension to the deadline, the industry bodies said, and the government’s National Energy Administration (NEA) is launched an industry survey on the value of doing this.

GWEC believes that even if the effects of the coronavirus persist, an extension of the tariff will mean all projects likely to be capable of claiming support will still be able to do so.

Domestic supply chain

Many leading Chinese and foreign turbine and component manufacturers resumed production in the week beginning 10 February.

However, many office-based employees are still working from home, and production facilities are not yet operating at full output, according to the industry groups.

“The resumption of production means that the recovery to business-as-usual has already begun," GWEC and CWEA concluded.

Regional variation

Installation delays are likely to take place in central and southern China where the COVID-19 outbreak is more concentrated, while the rest of the country is likely to be relatively unaffected, the industry bodies claimed.

Logistical delays due to ongoing road blocks and limited workforce capacity due to quarantine requirements are key concerns in the more densely populated central and south, they explained.

However, in the north — where more than 40% of new capacity was added in 2018 — delays are less likely, GWEC and CWEA added. 

Additionally, the NEA’s removal of its ‘red alarm’ mechanism should aid installations in the north of the country this year, they stated.

This warning mechanism meant project approvals and grid connection applications in several northern provinces were put on hold until curtailment rates were reduced.

Like Wood Mackenzie, GWEC and CWEA believe other international markets are less likely to be impacted by COVID-19.

Manufacturers are still able to export equipment from China, with import bans in other markets currently still unlikely.

However, foreign manufacturers with facilities in China remain concerned about stabilising the flow of local components and increasing their workforce capacity.

GWEC and CWEA said the issues will continue to hinder production output into March.

However, if these challenges persist, manufacturers could produce turbines and components elsewhere — as international gearbox suppliers, constrained by the ongoing US-China trade conflict, are currently doing, the industry bodies noted.

Have you registered with us yet?

Register now to enjoy more articles
and free email bulletins.

Sign up now
Already registered?
Sign in