The only thing that would stop western firms buying equal quality but cheaper Chinese products was full on protectionist banning of them, and that would occur on only a narrow slice of products. While there’s a good deal of chauvinism from the west, it’s possible to get equally high-quality turbines at a significantly lower price from China than from western firms today.Īs I said in my ESG Frontier Dialogue seminar with Beijing’s Tsinghua PBC School of Finance recently when asked about the implications of the EU’s carbon border adjustment mechanism, the combination of China’s purchasing power parity and Wright’s Law advantages meant that Chinese firms should be able to undercut western manufacturers and still make a good profit. Chinese firms are producing about 46% of wind turbines installed globally. Meanwhile, those supply chain problems are inverted for Chinese manufacturers like Goldwind, Envision, and Minyang, which are churning out high-quality onshore and offshore wind turbines for domestic and international markets willing to buy them.Ĭhinese firms are now six of the top ten turbine manufacturers on the planet, and Goldwind isn’t lagging Vestas or Siemens Gamesa by much. Western wind turbines are getting more expensive, and western NIMBYs continue to hinder onshore wind energy. Western manufacturers are facing supply chain issues, which is unsurprising given the significant trade hostility shown toward China, which is the primary minerals processor and component manufacturer for key aspects of wind turbines. Clearly, the IEA analysts finally got the memo that they were embarrassing themselves.Īs always, western analysts tend to overstate the global challenges facing the wind energy sector. I suspect that’s more likely to be accurate, and as a note, that represents a 50% year over year increase. However, they have an accelerated case of 500 GW of new capacity. I suspect that their main case is going to be proven wrong, as China built 47.4 GW of wind and solar in the first quarter alone. 32% growth year over year is indicative that they’ve finally realized growth rates aren’t linear. They are projecting growth of 107 gigawatts of new capacity over installations in 2022, for a total of 440 GW in new capacity this year. However, their 2023 forecast crossed my screen and there a few insights in there.įirst off, their forecasts for renewables aren’t terribly wrong any more. I stopped paying attention to their forecasts almost a decade ago. We all have our biases that are hard to overcome. And every year they were proven wrong, as the actual growth function was exponential. As a result, every year they did a simple induction based on the previous year’s curves. Its analysts - while not stupid, and having access to lots of data - were stuck in a paradigm that didn’t understand modularity, manufacturability, global supply chain advantages for manufactured goods, and parallelization of construction. The growth of those forms of energy was rapid, but not exponential. Electrical generation that it was concerned with was centralized, and mostly consisted of custom engineered, very large, singular units. The IEA is a global organization that for the vast majority of its history was about oil, gas, and coal. Auke Hoestra, program director of the NEON research initiative at Eindhoven, had annual fun publishing how absurdly wrong they were. And every year since 2002 and at least through 2020, their forecasts were laughably, radically wrong. For years, the International Energy Agency would provide updates on the historical growth of renewables globally, and then project them in a flat line into the future, often with slowing growth after a few years.
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