Offshore wind power equipment industry report - Development prospects and key companies

Offshore wind power equipment industry report: Development prospects and key companies

  1. Offshore wind power is expected to increase rapidly in the next five years
    1. A global consensus on two carbons was reached
    2. Energy storage batteries in offshore wind power
    3. The global offshore wind power will usher in a step-by-step development in the next five years
    4. The newly installed capacity of China’s offshore wind power is expected to exceed 37GW
    5. The rapid growth of offshore wind power in Vietnam is about to start
    6. The installed capacity of offshore wind power in Europe is expected to double in the future
  2. Cost reduction is the primary task of offshore wind power development
    1. Multi-channel cost reduction is the right way
    2. Large-scale is the core of offshore wind power cost reduction
    3. The large-scale and intensive combination punches through the pain points of offshore wind power and reduces costs
    4. Policies help offshore wind power soar
  3. The black technology of offshore wind power continues to expand the imagination
  4. Booming demand drives offshore wind power companies to make great progress
    1. The pattern of the whole machine link is first revealed
    2. Offshore wind power assist components
    3. The Vietnamese market takes the lead in increasing volume
  5. Investment strategies and key companies
    1. Mingyang Intelligence
    2. Yunda Shares
    3. Oriental Cable
    4. RIYUE Shares
    5. Tianshun wind energy

Offshore wind power is expected to increase rapidly in the next five years

A global consensus on two carbons was reached

Under the vision of carbon neutrality, countries around the world have successively established targets for offshore wind power. So far, major economies in the world, including the European Union, the United States, Japan, the United Kingdom, China, and Canada, have successively defined green power generation goals. And without exception, the development of wind power and photovoltaics is one of the important paths to achieve carbon neutrality.

Affected by the new crown epidemic, it is expected that the economy except the world’s major economies will experience negative growth in 2020; in order to stimulate economic growth and promote employment, countries around the world have successively formulated green bailout plans.

On the EU side, the European Commission has proposed to increase the installed capacity of offshore wind power from the current 25GW to 450GW in 2050 in order to achieve carbon neutrality in 2050; the eight countries in the Baltic Sea region have signed a joint agreement to increase the installed capacity of offshore wind power to 93GW by 2050.

The United States has made it clear that it will give a 30% offshore wind power investment tax credit to projects that start construction from January 1, 2017 to December 31, 2025; recently announced plans to deploy 30GW of offshore wind power cumulatively by 2030 (the United States currently only 2 small offshore wind farms), reducing carbon dioxide emissions by 78 million tons per year.

According to the draft decarbonization roadmap, Japan plans to increase offshore wind power capacity to 10GW by 2030, 30-45GW by 2040, and cut offshore wind power costs to 8-9 yen/kWh (approximately JPY 8-9/kWh) by 2030-2035. $0.08-0.09/kWh).

And without exception, the development of wind power and photovoltaics is one of the important paths to achieve carbon neutrality

In addition, the United Kingdom and Germany, as the first and third countries in the world’s offshore wind power installed capacity, have respectively established the target of 40GW of offshore wind power installed capacity in 2030 and 2040.

In 2018, Taiwan held two rounds of bidding for offshore wind power, which were allocated to 7 developers. It is expected that the first phase of offshore wind power development in Taiwan will reach 5.5GW from 2019 to 2025.

In addition, Taiwan, China revised its mid- and long-term plans for offshore wind power in 2020. From 2026 to 2035, 10GW of offshore wind power will be added. In 2035, the cumulative installed capacity of offshore wind power in Taiwan, China, will reach 15.5GW.

For the first time, China proposed to build a new power system with new energy as the main body. In September 2020, China first proposed at the 75th United Nations General Assembly to strive to achieve a peak in carbon emissions by 2030, and strive to achieve carbon neutrality by 2060.

In December 2020, at the Climate Ambition Summit, the goal was further clarified – by 2030, China’s carbon dioxide emissions per unit of GDP will be reduced by more than 65% compared with 2005, and the proportion of non-fossil energy in primary energy consumption will reach about 25%.

Since March this year, policies favorable to the long-term and stable development of new energy have appeared frequently. It points out the new mode of new energy consumption in the future. The coordination of multiple resources on the power supply side and the local consumption on the load side will expand new ways beyond the large-scale long-distance delivery of UHV.

The “14th Five-Year Plan” is a critical period and a window period for carbon peaking. It is necessary to build a clean, low-carbon, safe and efficient energy system, control the total amount of fossil energy, focus on improving utilization efficiency, implement renewable energy alternative actions, and deepen the reform of the power system. Build a new power system with new energy as the main body.

The concept of a power system with new energy as the main body has long been proposed in academia, and there have been many years of discussions on a 100% new energy power system. The central government’s statement on the Finance and Economics Committee means that this concept has entered the implementation stage from the demonstration stage, and has officially become the core idea of ​​realizing the “dual carbon” goal.

China’s wind power development has entered the 3.0 era. After experiencing the wind power 1.0 era characterized by the purchase of imported units and the wind power 2.0 era characterized by “West-East Power Transmission” and “North-South Power Transmission”, China has officially entered the 3.0 era of wind power development.

Newly installed capacity of China's onshore wind power over the years

Newly installed capacity of China’s onshore wind power over the years

According to data, the new grid-connected capacity of wind power nationwide will reach 71.67GW in 2020, of which the newly installed capacity of onshore wind power will reach 68.61GW due to the cancellation of state subsidies, and the newly installed capacity of offshore wind power will reach 3.06GW;

By the end of 2020, the cumulative installed capacity of China’s wind power reached 282 million kilowatts, a year-on-year increase of 34.6%, of which the cumulative installed capacity of offshore wind power was about 9 million kilowatts.

According to data from the China Electricity Council, in 2020, the national full-caliber power generation will be 7.62 trillion kWh, a year-on-year increase of 4.0%, of which the grid-connected wind power generation will reach 466.5 billion kWh, a year-on-year increase of 15.1%, accounting for 6.12% of the national power generation.

The large-scale development of wind power is inseparable from the rapid development of UHV under the guiding ideology of large-scale and long-distance allocation of new energy in the past ten years. According to the preliminary work plan of the UHV project released by the State Grid Corporation of China in March 2020, the “5 AC and 2 DC” plan will be approved in 2020, and the pre-feasibility study of the three lines will be completed in the middle of the year;

As of the end of June 2021, there are still “2 AC and 1 DC” to be approved, the pre-feasibility study of the three lines is still in progress, and the overall progress is lower than expected.

In addition, the above-mentioned “5-pass” lines are concentrated in central China, and the “2-direct” lines are all dedicated supporting projects for Baihetan Hydropower Station. The further improvement of the new energy consumption level is only limited by the UHV project.

With the continuous increase in the penetration rate of new energy, we believe that during the “14th Five-Year Plan” period, new energy consumption will open up new ways of local consumption in addition to long-distance delivery.

China's total investment in power grids over the years

China’s total investment in power grids over the years

Onshore stabilizes, and offshore is expected to contribute the main increment. According to the 2020 China Wind Power Market Report, China currently has 25+ onshore wind power base projects under planning or construction, with a total capacity of more than 100GW, basically distributed in the Three North Regions, of which more than 45% of the bases are planned in Inner Mongolia.

According to statistics, the tender volume of onshore wind power exceeded 15GW in the first quarter of this year, and the enthusiasm for onshore wind power development did not drop off a cliff after the rush to install. In contrast, onshore wind power development in the southern Middle East, which had been highly anticipated, fell short of expectations.

Constrained by the three control lines of ecological protection red line, permanent basic farmland and urban development boundary, the land available for wind power development in the southeast of the Middle East is limited.

Compared with onshore, offshore wind power resources are mainly distributed in the southeast coastal load center area, which does not require long-distance power transmission and has good accommodation conditions;

In addition, the development of offshore wind power does not occupy land resources, and the impact on the ecological environment is relatively small. Combined with industry chain research, we expect that the growth rate of new installed capacity of China’s onshore wind power will stabilize in the next five years.

Energy storage batteries in offshore wind power

The main function of the lithium battery for offshore wind energy storage and solar power is to store the electrical energy of the wind power generation system or photovoltaic power generation system, and to supply power to the load when the sunlight is insufficient, at night and in emergency conditions. If you want to know about the key manufacturers of  solar lithium ion batteries, you can refer to this Top 10 solar battery manufacturers.

Wind power energy storage uses lithium iron phosphate as the cathode material of lithium-ion batteries, which has good safety.

The lithium battery energy storage system can quickly and effectively smooth the fluctuation of active power output by the wind power system when the power grid is in normal operation;

It can provide a certain amount of reactive power support for the grid when the grid is faulty; it can stabilize the voltage and frequency of the system when it is disconnected from the grid, effectively improving the operating performance of the wind power system.

As the price of lithium batteries has fallen, they have grown in size and capacity and opened up new markets. Some lithium-ion battery storage systems are now able to manage and cope with the intermittency of wind and solar for longer periods of time.

Lithium iron phosphate battery energy storage has become the development direction of countries all over the world because of its long life, low cost, high efficiency, good safety performance, convenient construction, mature technology, no pollution, and large space for future cost and life improvement.

Wind power generation technology is mature, the cost of renewable energy is relatively low, and it has broad development prospects. New energy photovoltaic power generation and wind power generation require stable power storage devices, and lithium-ion batteries with high energy density are just suitable for this work.

The global offshore wind power will usher in a step-by-step development in the next five years

In the next five years, the newly installed capacity of offshore wind power is expected to exceed 70GW. According to statistics, by the end of 2020, the cumulative installed capacity of global onshore wind power is 707GW, and the cumulative installed capacity of offshore wind power is 35GW.

Onshore, the newly installed capacity will decline to a certain extent after the rush to install in 2020-2021, and will start to stabilize and rebound in 2023, with a CAGR of 0.3% in the next five years;

In terms of offshore, in 2022, the newly installed capacity will drop to a certain extent with the end of China’s rush to install, but it will start a high growth trend in 2023, and the CAGR will reach 31.5% in the next five years.

According to the report, it is estimated that the cumulative installed capacity of global offshore wind power will reach 228GW in 2030, and the cumulative installed capacity of global offshore wind power will exceed 1,000GW in 2050, with a CAGR of 11.5% from 2019 to 2050;

In 2021, the newly installed capacity of offshore wind power will exceed 10GW, and in 2027, the newly installed capacity will exceed 20GW. In addition, in the next ten years, the focus of offshore wind power development will shift from the North Sea and the east coast of the Atlantic to East Asia and Southeast Asia. By 2030, the cumulative installed capacity of offshore wind power in Asia will reach 126GW, Europe will reach 78GW, and North America will reach 23GW.

It is estimated that the cumulative installed capacity of global offshore wind power will reach 206GW in 2030; according to the forecast, the cumulative installed capacity of offshore wind power will reach 219GW in 2035. In the next five years, the newly installed capacity of offshore wind power will exceed 70GW. As countries continue to raise their targets, the newly installed capacity may exceed expectations.

Forecast of new installed capacity of global onshore wind power

Forecast of new installed capacity of global onshore wind power

The global offshore wind power center is moving eastward. According to the data, China’s offshore wind power development potential is as high as 2982GW, of which 1400GW is fixed and 1582GW is floating.

According to statistics, by the end of 2020, there were 26 offshore wind power projects under construction in the world, with a capacity close to 10GW; about 44% of the capacity under construction came from China.

In terms of cumulative installed capacity, China successfully overtook the Netherlands and ranked third in the world last year. It is expected that China will overtake the two major offshore wind power countries, the United Kingdom and Germany, this year, and the cumulative installed capacity will dominate the world.

In addition, Japan, Vietnam, Taiwan, and the Philippines are also expected to start large-scale development of offshore wind power in the next few years.

The newly installed capacity of China’s offshore wind power is expected to exceed 37GW

The development goals of sea breeze in the southeastern coastal provinces have been successively introduced. Since the release of the “Double Carbon” goal, coastal provinces have responded positively based on the advantages of consumption and wind resources, taking offshore wind power as an important direction for new energy development during the “14th Five-Year Plan” period.

Relevant planning proposes to take the principle of “offshore as the mainstay and far-sea demonstration” as the principle, to steadily promote the development of offshore wind power projects in offshore areas, and strive to promote the construction of demonstration projects of offshore wind power in far-reaching seas. Offshore wind power added 8GW.

In the relevant plan, it is proposed that the installed capacity of Guangdong Province will reach 18GW by the end of 2025 (that is, 17GW of newly installed capacity during the “14th Five-Year Plan” period), and further explore other exploitable offshore wind energy resources and revise the development plan.

In addition, Zhejiang, Fujian and Shandong have also announced the development goals of offshore wind power. Combined with the planned project capacity and the targets of various provinces and cities, we estimate that the newly installed capacity of China’s offshore wind power is expected to exceed 37GW during the “14th Five-Year Plan” period.

The newly installed capacity of China's offshore wind power is expected to exceed 37GW

During the 14th Five-Year Plan, the newly installed capacity of offshore wind power in China is expected to exceed 37GW. According to the data, in 2020, the newly added hoisting capacity of wind power in the country will be as high as 57.8GW.

After the rush to install onshore wind power in 2020, the new installed capacity of the industry will have a moderate correction in the next five years. According to the recent bidding and research, it is expected that in 2021, China will add 30-40 GW of onshore wind power and 7-8 GW of new offshore wind power. In 2022, China will add 40-50W of onshore wind power and 4-6GW of new offshore wind power.

In the long run, the newly installed capacity of onshore wind power will maintain a slight increase from 2023, while offshore wind power will enter a period of rapid growth during the “14th Five-Year Plan” period.

As of the end of 2020, the cumulative installed capacity of my country’s offshore wind power is about 9GW. In terms of new installed capacity, by the end of June this year, Guangdong, Jiangsu, and Zhejiang provinces have basically defined the “14th Five-Year Plan” new offshore wind power installed capacity targets (respectively 17GW, 8GW and 4.5GW). GW)

The rest of the provinces have issued relevant support policies for offshore wind power, but have not clearly given the new installed capacity target during the “14th Five-Year Plan”; 37.8GW, with an average annual installed capacity of 7.6GW.

Forecast of new installed capacity of offshore wind power in each province

The rapid growth of offshore wind power in Vietnam is about to start

The advantage is unique, the sea breeze develops the slope is long and the snow is thick. Vietnam’s territory is long and narrow in the north and south, and the terrain is high in the west and low in the east. About 75% of the territory is mountains and plateaus. The main population and electricity loads are distributed near the coastline. Only 8.6% of the land area is easy to install wind power generation;

Vietnam’s coastline is 3,260 kilometers long and its territorial waters are basically shallow, so it has unique advantages to develop offshore wind power. According to the data, Vietnam’s offshore wind power development potential is 599GW, of which 261GW is fixed and 338GW is floating.

According to the research, under the low growth scenario, by 2035, the cumulative installed capacity of fixed offshore wind power in Vietnam will reach 7GW, the cumulative installed capacity of floating offshore wind power will reach 0.4GW, and the cumulative installed capacity of intertidal wind power will reach 3.3GW;

Under the high-growth scenario, by 2035, the cumulative installed capacity of fixed offshore wind power in Vietnam will reach 17.5GW, the cumulative installed capacity of floating offshore wind power will reach 2.9GW, and the cumulative installed capacity of intertidal wind power will reach 4.1GW.

Plan revision + subsidy extension to help the rapid development of the industry. According to Vietnam’s previous plan, onshore and offshore wind power projects put into production before November 1, 2021 can enjoy subsidized electricity prices of 8.5 cents/kWh and 9.8 cents/kWh respectively. Reduction and exemption of income tax, land tax and environmental protection fees.

According to Vietnam’s plan released in February this year, considering the epidemic situation and the progress of project construction, the subsidy withdrawal time was postponed to the end of 2023, and the national wind power installed capacity target in 2025/2030 was significantly revised from the previous 2GW and 6GW to 12GW and 12GW respectively. 19GW, and lists the detailed distribution of sites with a total of 59GW of offshore wind power potential.

The installed capacity of offshore wind power in Europe is expected to double in the future

By the end of 2020, the cumulative installed capacity of European offshore wind power will reach 25GW. According to the offshore wind power development plans issued by European governments, the cumulative installed capacity of European offshore wind power will exceed 54GW in 2025, and the cumulative installed capacity will double in five years.

In the UK, the cumulative installed capacity of offshore wind power reached 10.43GW by the end of 2020, and will maintain rapid growth in the next five years. The cumulative installed capacity of offshore wind power is expected to exceed 25GW in 2025 and 40GW in 2030.

In the Netherlands, by the end of 2020, the cumulative installed capacity of offshore wind power will reach 2.61GW, the new installed capacity in the next five years is expected to reach 4.4GW, and the cumulative installed capacity in 2030 is expected to reach 11GW.

In Germany, the cumulative installed capacity of offshore wind power will reach 7.69GW by the end of 2020. According to the Renewable Energy Law at the end of 2020, the cumulative installed capacity of offshore wind power will reach 20GW in 2030 and 40GW in 2040.

The offshore wind power projects currently under construction in Germany are all bidding projects in 2017/2018 and are expected to be connected to the grid in the next five years, with an estimated new installed capacity of 3.1GW; The new round of bidding is expected to be launched in 2021-2023, and it is expected to be connected to the grid in 2026-2030.

2021-2025 new installed capacity forecast of European offshore wind power

2021-2025 new installed capacity forecast of European offshore wind power

Cost reduction is the primary task of offshore wind power development

Multi-channel cost reduction is the right way

The subsidy recedes and the offshore wind parity is under pressure. According to IRENA statistics, the global photovoltaic LCOE has dropped from US$0.381/kWh in 2011 to US$0.057/kWh in 2020, a drop of 85%; the LCOE of onshore wind power has dropped from US$0.089/kWh in 2010 to US$0.039/kWh in 2020 degree, a decrease of 56%;

The LCOE of offshore wind power dropped from US$0.162/kWh in 2010 to US$0.084/kWh in 2020, a decrease of 48%. According to the “Notice on Improving the On-grid Electricity Price Policy for Wind Power” issued by the National Development and Reform Commission in May 2019, the benchmark electricity price for offshore wind power approved in 2019 has been changed to a guide price. guide price;

Offshore wind power projects approved before the end of 2018 and full-capacity grid-connected before the end of 2021 can enjoy the benchmark on-grid electricity price at the time of approval, and the guide price for the implementation of the grid-connected year when all units are connected to the grid in 2022 and later.

In June 2021, the National Development and Reform Commission issued a notice, pointing out that from 2021 onwards, the on-grid tariff for newly approved (recorded) offshore wind power projects will be set by the provincial pricing authority, which means that from 2021 onwards, new offshore wind power projects will completely cancel the national subsidy.

According to the data, the total installation cost of China’s offshore wind power in 2020 is US$2,968/kW, and the LCOE is US$0.084/kWh (about 0.54 RMB/kWh). There is still a gap between the distance parity of China’s offshore wind power.

Guangdong and Jiangsu are expected to take the lead in realizing sea breeze parity in 2025. It is forecasted that the LCOE of onshore wind power in China will drop from 0.41 RMB/kWh in 2018 to 0.33 RMB/kWh in 2023, a decrease of 20%;

The LCOE of offshore wind power will decrease by 18% from RMB 0.5/kWh in 2018 to RMB 0.41/kWh in 2023. Calculations show that in 2025, offshore wind power in Guangdong and Jiangsu can achieve grid parity or even low price, Hainan, Fujian, and Zhejiang can basically achieve grid parity, and Shandong is still unable to achieve grid parity for the time being.

According to estimates, when the unit cost of offshore wind power is 12,000 RMB/kW and the utilization hours reach 4,000h, the kWh cost can be reduced to about 0.4 RMB/kWh (assuming the internal rate of return on capital is 10%).

According to the calculation of the Fujian Electric Power Survey and Design Institute of China Power Construction Group, taking the demonstration project of the shoal in the south of Fujian as an example, under the condition of parity on the grid (calculated at the coal-fired benchmark electricity price of 0.39RMB/kWh in Fujian Province), when the equivalent full load is hourly Counting 3800h, the static investment per kilowatt is reduced to 14750 RMB/kW, and the internal rate of return of the project capital can reach 6%;

The static investment per kW is reduced to 14,000 RMB/kW, and the internal rate of return on the project capital can reach 8%. According to the data, the construction cost of offshore wind power under the rush to install this year has increased. The unit cost of Jiangsu and Zhejiang offshore wind power is about 15,000-17,000 RMB/kW, and the unit cost of Fujian and Guangdong offshore wind power is about 17,000-24,000 RMB/kW; It is expected that the unit cost of offshore wind power will drop significantly after 2022.

According to the data, the utilization hours of offshore wind power generally reach more than 3000h, and individual units are as high as 5600h. The advantage of utilization hours will greatly dilute the high cost of offshore wind power. We predict that Guangdong Province is expected to take the lead in realizing the grid parity of sea breeze in 2024.

Comparative analysis of the forecast price of offshore wind power LOCE and the price of coal power in each province in 2025

Comparative analysis of the forecast price of offshore wind power LOCE and the price of coal power in each province in 2025

Units, foundations and operation and maintenance are the key links in cost reduction of offshore wind power. The whole life cycle cost of wind power project includes two parts: CAPEX and OPEX. The cost structure of wind power projects in different regions and types is quite different.

For onshore wind power in the Three-North region, wind turbines account for 55% of the investment cost, while the basic proportion is only 4%. For Guangdong offshore wind power projects, wind turbines (including installation) account for about 43% of the investment cost. It accounts for 24%, which are the two highest proportions in the CAPEX cost of offshore wind power.

In addition, the OPEX cost of offshore wind power accounts for about 40% of the total life cycle cost, and the quality and level of later operation and maintenance largely determine the benefits of the project.

In terms of units, large-scale units can effectively reduce the cost per unit capacity. In terms of basic aspects, the improvement of process and technical level will effectively reduce related costs.

In terms of operation and maintenance, unmanned, intelligent and professional will improve the MTBF and effectively reduce the cost of the project later. From the perspective of cost ratio and cost reduction space, the unit, foundation and operation and maintenance are the key links in cost reduction of offshore wind power.

Large-scale is the core of offshore wind power cost reduction

Large-scale units help offshore wind power to increase revenue and reduce costs. Large-scale wind turbines are the most effective way to reduce the cost of offshore wind power.

First, the increase in the capacity of a single unit means a larger swept area and a higher hub height, a lower cut-in wind speed, and more wind energy can be captured in the same geographical location, which can effectively increase the power generation of wind turbines in the full life cycle;

Second, the use of larger single-unit capacity units for the same capacity wind farm can effectively reduce the investment costs of raw materials, foundation, hoisting, lines, and land allocated to the unit capacity.

Third, the large-scale unit will reduce the cost and difficulty of later operation, maintenance and management. Combining the above three factors, the large-scale unit will effectively reduce the LCOE of wind power generation.

For offshore wind power, a larger unit capacity also means that wind farms of the same capacity require fewer wind turbine sites, and the corresponding wind turbine foundation, transportation, installation and maintenance costs are also significantly lower than onshore wind power. Taking Europe, where the development of offshore wind power is the most mature, as an example, the average new installed capacity of offshore wind power in 2020 will reach 8.2MW, which is much higher than the level in my country over the same period.

Distribution of new installed wind power capacity in China over the years

Distribution of new installed wind power capacity in China over the years

The leader of the whole machine has stepped up the large-scale layout at sea. Since 2018, the global wind power leader has stepped up its large-scale deployment of units. Vestas released 10MW offshore wind turbines as early as September 2018, and has been delivered to the Seagreen Wind Farm in Scotland this year;

In February this year, Vestas released a 15MW offshore unit, which once again refreshed the global installed capacity of offshore wind power. For GE, its 12MW offshore wind turbine prototype was connected to the grid in the Netherlands in 2019.

Up to now, it has received orders from Brazil, Sweden, the United States, the United Kingdom and other places, and signed a cooperation agreement with State Power Investment Corporation in November 2019 to introduce 12MW units and set up a final assembly base in Jieyang, Guangdong; GE released the 14MW model again at the end of last year. Grid-connected production at Dogger Bank C in 2026.

Siemens Gamesa released the 11MW offshore unit in November 2019, and completed the prototype connection to the grid at the Orsterild wind farm in Denmark in February of the following year, and has received orders from the Netherlands, Germany and other places; Siemens Gamesa released the 14MW model in May 2020 , has received orders from China Taiwan, the United States and other places.

The overall layout of large-capacity units in China’s OEMs lags behind that of the three overseas giants. Currently, the large-capacity units that have been hoisted and connected to the grid mainly include Mingyang Smart 10MW, Dongfang Electric 10MW, Electric Wind Power 8MW and Goldwind 10MW.

Import substitution of core components further opens up space for cost reduction. At present, most parts of wind power have been localized, but a few parts such as main bearings, converters, transformers and pitch systems of large-capacity and offshore wind turbines still rely on imports.

Taking the bearing sector as an example, wind power mainly includes main shaft bearings, pitch bearings and yaw bearings. Among them, the main shaft bearings have a relatively high proportion of imports. At present, the top three global main bearing market shares are Schaeffler (29%) and Skye respectively. Fu (24%) and NTN (12%).

In terms of converters, some high-power offshore wind power converters rely on foreign brands such as ABB, Siemens, KK, and Emerson. However, it should be pointed out that the components currently relying on imports do not account for a high proportion of the value of the wind turbine, but they have extremely high requirements for long-term operational reliability.

Therefore, complete machine manufacturers and owners have limited enthusiasm for domestic substitution. However, with the continuous decline of wind parity and the winning price of complete machines, the pace of domestic substitution of core components is bound to accelerate.

Electric and wind power raw material cost split in 2020

Electric and wind power raw material cost split in 2020

The large-scale and intensive combination punches through the pain points of offshore wind power and reduces costs

Scale effect is an important way to reduce the cost of any new technology. From the earliest use in the satellite field to today being one of the cheapest forms of energy for mankind, the rapid decline in the cost of photovoltaic power generation is mainly due to economies of scale and technological iterations.

Compared with photovoltaics, as an industry technology with strong mechanical properties, the iteration speed is slower, but the applicability of scale effect is unquestionable. If any technology has advantages (not considering price for now), there will be initial specific small-scale applications;

If its advantages are prominent enough, the scope of application will gradually expand, and the price will decrease accordingly. The decrease in price will make it more competitive in the market, so that the demand will further increase, and finally it will be implemented into a wider range of applications.

The above process constitutes a virtuous circle, which ultimately drives the substantial cost reduction of the technology. If the range of cost reduction when the cumulative installed capacity of a power generation technology is doubled is defined as the learning rate, the relevant research shows that the LCOE learning rate of photovoltaic, onshore wind power and offshore wind power from 2010 to 2019 is 36% and 23% respectively. and 10%.

In addition, the learning rate often has the characteristics of low before and high – in the early stage of technology application, the learning rate is low, and the cost reduction speed is slow; after the technology application matures, the learning rate increases significantly, and the cost reduction speed is accelerated. Offshore wind power is at a turning point from the initial stage of application to the mature stage of application, and the speed of cost reduction is greatly accelerated.

Intensive and large-scale development is a powerful tool to reduce the cost of offshore wind power. Intensification and scale will help offshore wind power reduce costs from both initial investment costs and later operation and maintenance costs. The expansion of the scale will effectively dilute the investment costs of design and survey, wind turbines, transmission lines, power transmission and transformation equipment, installation and construction, and greatly reduce the difficulty of operation and maintenance, as well as the consumption and frequency of ships and personnel.

For example, in July last year, German power transmission operator Amprion proposed to build a “European Offshore Wind Power Bus” in the North Sea, aiming to reduce the cost of offshore wind power transmission by establishing a cross-border shared offshore transmission grid. In the latest policy documents of the southeastern coastal provinces, the centralized development of offshore wind power and the construction of tens of millions of kilowatts of offshore wind power bases are all high-frequency words, and the large-scale development of offshore wind power has become the consensus of all provinces.

In addition, various provinces and autonomous regions have built nearby sea wind equipment manufacturing bases according to the offshore wind power development plan. Among them, Jiangsu, Fujian and Guangdong provinces have the earliest layout and the largest scale, covering the whole process of design and development, equipment manufacturing, inspection and testing, installation and construction, and post-operation and maintenance. Most of the projects are still in the ramp-up stage of production capacity. With the full completion of the base, the cost of the entire industry chain of offshore wind power will drop significantly.

In addition, large-scale development can also help the upstream and downstream industry chains to obtain long-term purchase orders, boosting industry confidence.

Sany Heavy Energy will split the raw material cost from January to September 2020

Sany Heavy Energy will split the raw material cost from January to September 2020

The shortcomings of construction capacity under the tide of rush installation are highlighted. At present, the number of completed offshore wind farm projects in China is small and the scale is small, the corresponding marine machinery and equipment technology is immature, the construction team is relatively simple, and the construction experience is insufficient, resulting in high construction costs, coupled with complex offshore construction conditions and difficult construction.

Key equipment such as special large ships/platforms (such as foundation piling, wind turbine transportation, hoisting, etc.) required for construction is small, and the cost of ship shifts is high. Compared with onshore wind power, the installation and construction costs of offshore wind power account for a larger proportion of the total cost.

The research institute said that the construction environment of offshore wind power is complex and changeable, and the construction window is greatly affected by external factors such as weather, resulting in the ceiling of its construction efficiency. A construction vessel with excellent performance can only lift up to about 40 offshore wind turbines a year.

At present, there are about 40 offshore wind power construction vessels in service in China, and the theoretical upper limit of the annual hoisting capacity is about 1,600 units. It is estimated that the cost increase caused by rush installation is about 2000-3000 RMB/kW, which is mainly due to the increase in installation cost. The rental of professional construction vessels has risen from 4 million yuan/month in the middle of last year to 10 million yuan/month at the end of April this year. moon.

Under the expectation of high growth of global offshore wind power, bidding for offshore wind power construction vessels/platforms has been frequent recently. With the gradual ramp-up of new construction capacity, the overall cost of offshore wind power will further decrease.

Large-scale, intelligent, and unmanned operation and maintenance help Haifeng reduce OPEX. O&M expenditures account for 15% to 25% of the life cycle cost of offshore wind power projects, second only to the procurement cost of wind turbines.

At present, the operation and maintenance method of China’s offshore wind power is to provide relevant services by the unit manufacturer during the five-year warranty period. After the warranty is issued, the wind farm investment developer will recruit personnel for operation and maintenance, or find a third-party operation and maintenance service provider to provide operation and maintenance services. .

At present, China Haifeng’s operation and maintenance adopts the operation and maintenance mode of periodic scheduled maintenance as the main, supplemented by sudden fault maintenance, and still faces problems such as high failure rate of wind turbines, no relevant standards, limited operation and maintenance level, and shortage of special transportation tools.

To reduce operation and maintenance costs, we need to start from four aspects:

First, to improve the reliability of wind turbines, on the one hand, it can reduce the number of operation and maintenance from the source, and on the other hand, it can increase the power generation in the whole life cycle to dilute the cost of electricity;

Second, carry out early warning and diagnosis of unit faults based on digital means, and establish a “cloud operation and maintenance” platform or big data center to realize intelligent and unmanned operation and maintenance.

Third, improve the technical level of operation and maintenance vehicles, improve the work efficiency of special ships/aircraft, and reduce costs.

Fourth, realize “shared” operation and maintenance through the cluster development of offshore wind power. For example, European owners have formed project clusters in the North Sea region, and synergies can be formed between new projects and adjacent projects in operation, sharing personnel, operating land, ships, etc., thereby reducing operating costs.
Wind power cost modelWind power cost model

Policies help offshore wind power soar

Take the United Kingdom, which has the largest cumulative development of offshore wind power, as an example. In 2002, the United Kingdom launched the implementation of the renewable energy obligation certificate system. Renewable Energy Obligation Certificate) or purchased on the secondary market.

The RO system promoted the rapid development of renewable energy in the UK in the early days, but because the consumption obligation was determined by the government, there was always a supply and demand mismatch between suppliers, generators, the government and electricity users.

In 2015, the contract for difference mechanism (CFD) based on the principle of “more refunds and less compensation” gradually replaced the RO system and replaced it throughout 2017. The main principle is that when the market electricity price is higher than the contract execution electricity price When the electricity price is lower than the contract electricity price, the government subsidizes the price difference to the power generation enterprises (in practice, it is implemented by the state-owned company LCCC).

The CFD system realizes the connection between the existing electricity market in the UK and the demand for renewable energy subsidies, which greatly reduces the risk of renewable energy investment. In addition, the bidding system ensures that the most cost-effective projects are selected.

At present, the CFD bidding is in the third round (2019), and a total of 6GW of renewable energy projects have been awarded, of which offshore wind power is as high as 5.47GW. In order to guide the settlement price), the UK offshore wind power has basically achieved parity.

At the beginning of the year, Guangdong Province issued relevant documents, pointing out that subsidies of 1,500 RMB/kW and 1,000 RMB/kW will be given to projects with full capacity grid connection in 2022 and 2023, respectively. ), the total subsidized capacity does not exceed 4.5GW.

The official draft is expected to be officially released in the near future, and we believe that the possibility of exceeding expectations cannot be ruled out. In February this year, Zhejiang Province issued the “14th Five-Year Plan for Energy Development in Zhejiang Province (Draft for Comment)”, which clearly proposed to speed up the establishment of a provincial-level financial subsidy system and allocate new projects through a competitive method.

Compared with the United Kingdom, China has not yet established a complete power market system and mechanism including the spot market, and the on-grid electricity price is still dominated by fixed electricity prices (benchmark electricity price/guide price). still to be explored;

Although Guangdong Province has pioneered the transition from “back-end subsidies” to “front-end subsidies”, the subsidy method has not yet been market-oriented, and cannot highlight the role of technological iteration and the comparative advantages between projects.

In the relevant planning, the focus is on the construction of offshore wind power bases in Guangdong, Fujian, Zhejiang, Jiangsu, Shandong, etc. It is expected that in the second half of the year, specific policies will be introduced in each province in order to cope with the 2-3-year window period between the cancellation of the national subsidy and the grid parity.

Cost composition of offshore wind power operation and maintenance

Cost composition of offshore wind power operation and maintenance

Green certificate and CCER transactions will bring additional benefits to offshore wind power. In January 2017, China issued a relevant notice and initially established a green certificate resource subscription mechanism to make up for the funding gap for new energy subsidies to a certain extent.

In May 2019, China issued a relevant notice, which for the first time clearly established a renewable energy power consumption assessment mechanism. For those who have not fulfilled the responsibility for consumption, they can complete it by purchasing a green certificate. The introduction of this policy is expected to change the current bleak green certificate transaction. The situation will greatly increase the enthusiasm of responsible entities to purchase green certificates and increase the income of new energy projects.

Since the green certificate system was established earlier and the original intention was to make up for the subsidy gap, so far offshore wind power has not been included in the scope of green certificate issuance.

In addition, the relevant management measures issued at the end of 2020 pointed out that key emission units can use national certified voluntary emission reductions (CCERs) to offset no more than 5% of their verified emissions.

According to estimates, the LCOE of a 100MW PV project can be reduced by about 7% by selling CCER (assuming the CCER price is 20 RMB/ton).

The black technology of offshore wind power continues to expand the imagination

The floating type opens a new era of wind resource utilization. According to research, more than 80% of the world’s available offshore wind energy resources are distributed in locations with a water depth greater than 60 meters, and floating offshore wind power technology is an inevitable choice for capturing wind energy in deep water areas.

Compared with offshore fixed units, deep-sea floating units have the advantages of better wind energy resources, flexible locations, low basic installation costs, less environmental impact, and more flexible consumption methods. times, is still in its infancy.

Floating offshore wind power foundations mainly include tension leg type, semi-submersible type and single-column type, in addition to barge type, hybrid type and other derivative types, which need to be selected according to actual geographical and sea conditions.

Europe, Japan and South Korea started early, and China’s first prototype was recently connected to the grid. In 2009, the world’s first 2.3MW floating wind turbine appeared in the Norwegian waters; in 2017, the world’s first commercial floating wind farm Hywind was put into production in Scotland;
In 2009, the world's first 2.3MW floating wind turbine appeared in the Norwegian waters

In July 2020, WindFloat Atlantic, the world’s first semi-submersible floating wind farm, was put into operation (a total of 3 MHI Vestas 8.4MW wind turbines); in October 2020, Equinor started the construction of the world’s largest floating offshore wind power project, Hywind Tampen, using 11 Siemens The Gamesa 8MW wind turbine is expected to be put into operation by the end of 2022, and will supply 35% of the annual electricity consumption for five offshore oil and gas platforms.

So far, countries including the United Kingdom, Portugal, Spain, France, Norway, Sweden, Japan, and South Korea have had experience in the development and commercial operation of floating offshore wind power prototypes.

China’s research on floating offshore wind power began in 2013, and companies such as CGN, Huaneng, Three Gorges, Mingyang Intelligent, Shanghai Electric, Xiangdian Wind Energy, Goldwind Technology, and Haizhuang Wind Power have all carried out preliminary basic work;

In May this year, China’s first floating offshore wind turbine produced by Mingyang Intelligent rolled off the production line in Yangjiang, and is expected to be installed and connected to the grid at the Three Gorges Yangjiang Shapa Wind Farm by the end of July.

Floating offshore wind power will be grid parity by 2029 at the latest. Floating wind power is suitable for scenarios where the water depth is greater than 60 meters or the seabed conditions are not suitable for fixed type. Compared with fixed type, the biggest constraint at present is the higher cost.

According to estimates, more than 10GW of floating wind power projects will be built in the Asia-Pacific region in the next ten years, with a total investment of about US$58 billion (about US$5,800/kW). $4000/kW level.

In addition, the Hywind Tampen project currently under construction is expected to cost about US$5,700/kW, and the project to be constructed in Ulsan, South Korea, is expected to cost about US$5,400/kW, which is about twice the cost of stationary offshore wind power. Currently, there is limited operational data for floating offshore wind power projects, and there is no reliable LCOE calculation.

According to the analysis, the floating LCEO is expected to drop from $0.2/kWh in 2020 to $0.07/kWh in 2030.

According to the latest research, it is expected that by 2029, the winning price of floating wind power projects in the UK in CFD will be lower than the wholesale price of the electricity market, which means that floating wind power will achieve grid parity by then.

In addition, considering that fixed offshore wind technology and its commercialization experience can be quickly transplanted to floating, the speed of cost reduction is expected to be further accelerated.

The currently visible ways to reduce costs mainly include the experience transplant of fixed units, making full use of the existing supply chain, lightweight and modular units, making full use of existing construction resources, learning from offshore engineering platform technology and obtaining wind energy resources that are superior to nearshore.

According to research, by 2030, the global floating offshore wind power scale will reach 15GW, and by 2040, it will reach 70GW; DNV GL predicts that by 2050, the global floating wind power scale is expected to reach 260GW.

Floating offshore wind power LOCE cost development trend forecast

Towerless designs promise to redefine offshore wind. In May of this year, the first 1:3 prototype X30 of the PivotBuoy towerless floating wind turbine designed by Spanish company X1 Wind entered the assembly stage, equipped with a 225kW Vestas V29 wind turbine, and will be deployed to the waters near Spain.

PivotBuoy subverts the existing floating structure design, creating the first leeward type (that is, the impeller facing away from the incoming wind direction) floating fan, with single-point mooring to achieve automatic wind alignment; the tower-free design can greatly reduce the amount of steel used, and Easy to match with larger fan blades.

According to the calculation of X1 Wind, the PivotBuoy design is 80% lighter than the conventional floating design, the applicable water depth is up to 1500 meters, the overall cost is reduced by 50%, and the LCOE can reach about 0.05 euros/kWh.

In July 2020, French start-up EOlink announced that its pyramid-shaped towerless wind power design has received funding from the European Union’s “Ocean Demonstration Program”, which aims to reduce steel usage, reduce weight and significantly reduce costs, while balancing stress distribution, reduce fatigue load, the maximum unit capacity can reach 15MW.

At present, EOlink has completed the 1:10 model test, and said that the design can reduce the LCOE of floating wind power to about 0.035 euro/kWh; the company plans to carry out 5MW prototype test in 2022.

Hydrogen production from offshore wind power breaks the dimensional wall of the new energy/petrochemical industry. From the consumer side, due to the high cost of preparation and the simple and abundant storage and transportation of coal, oil and natural gas, 90% of the world’s annual hydrogen production is used in the refining and chemical industries, and it is rarely used in the fields of transportation, heat and power production. .

From the supply side, due to the outstanding cost advantage, 98% of hydrogen energy currently comes from fossil fuel production (gray hydrogen), and less than 2% of the consumption comes from blue hydrogen and green hydrogen.

According to estimates, hydrogen energy is expected to be widely promoted in the heating and heavy truck industries before 2030, and will gradually show cost competitiveness in mainstream industries and transportation industries after 2030;

Superimposed on the global dual-carbon vision, the growth rate of the hydrogen energy industry is expected to further accelerate. It is expected that by 2050, the proportion of hydrogen energy in the global primary energy consumption is expected to reach 15%-25%.

With the increase of offshore wind power offshore distance and the improvement of transmission capacity, the proportion of submarine cables in project investment expenditure will increase significantly, and offshore wind power hydrogen production based on the Power-to-X idea will highlight its advantages. At present, the mainstream offshore wind power hydrogen production schemes include three types:

1. Hydrogen is produced by electrolysis directly on the offshore platform and stored under pressure, and high-pressure hydrogen cylinders are transported through ships;

2. Hydrogen is produced by electrolysis on land and delivered by vehicles or pipelines;

3. Hydrogen produced by electrolysis on existing offshore oil and gas drilling platforms is sent out through submarine pipelines. Taking Europe as an example, after more than 60 years of development of oil and gas fields in the North Sea, oil and gas pipelines spread all over Europe onshore and undersea.

To this end, the United Kingdom and Germany have revitalized the existing oil and gas pipeline resources, using offshore wind power to produce hydrogen and large-scale long-distance transmission, greatly reducing the cost of offshore wind power development and reducing carbon emissions.

Cost comparison of different hydrogen energy sources

Marine Ranch: Build nests to attract phoenixes, build reefs to attract fish. The idea of ​​constructing marine pastures in offshore wind power areas is similar to “complementary agriculture and solar energy, complementary fishing and solar energy”, that is, using the underwater pile foundation of offshore wind farms as the anchoring foundation

A suitable artificial fish reef is constructed on this pile foundation to form a “new compound marine ranch platform” to achieve the purpose of protecting and multiplying fishery resources and improving the water environment.

The integrated development of marine ranching and offshore wind power is an important new industrial model and future development direction for economical and intensive use of the sea. At present, European countries represented by Germany, the Netherlands, Belgium, Norway, etc. have implemented pilot research on the combination of offshore wind power and marine aquaculture in 2000.

The principle is to fix the fish culture cage and the shellfish culture raft on the foundation of the fan to achieve the goal of intensive sea use, and to provide a typical case for evaluating the development potential of the integration of offshore wind power and multi-trophic mariculture.

In 2016, Asian countries represented by South Korea also carried out a combination of offshore wind power and marine aquaculture. The results showed that the amount of important economic biological resources such as bivalve and seaweed increased in the offshore wind power area. At present, Guangdong, Shandong and other provinces have clearly proposed the development of the “offshore wind power + marine ranch” model.

Booming demand drives offshore wind power companies to make great progress

The market structure is not yet mature, and the technical barriers to segmentation are relatively high. Compared with onshore wind power, the operating environment of offshore wind power is more severe and complex, and the operation and maintenance are more difficult.

It is often necessary to meet special requirements such as typhoon resistance, corrosion resistance, light weight, and load optimization, so the reliability requirements for the whole machine and parts are significantly higher than those on land.

Up to now, most of the offshore wind power related enterprises are mainly engaged in the onshore wind power business, and most of the offshore wind power business is the transplant and extension of the onshore business;

As the focus of incremental wind power installations in China gradually shifts from onshore to offshore, the proportion of offshore wind power businesses in the wind power industry chain has also increased year by year. In general, China’s offshore wind power industry is still in a stage of rapid growth, and the market structure is not yet mature.

Compared with onshore wind power, offshore wind power has higher requirements on foundation, cables and construction, and there are certain technical and experience barriers. In terms of foundation, in addition to using traditional monopile foundations, offshore wind turbines need to select jackets or floating foundations according to seabed conditions, and offshore booster stations often require dedicated jacket foundation support;

In terms of cables, subject to harsh sea conditions and the need to save space, special anti-corrosion and anti-impact optoelectronic composite cables are often required; in terms of construction, companies specializing in marine engineering are required to be responsible for installation and construction.

In addition to traditional wind power manufacturing enterprises, including Changfeng Offshore Engineering, Wison Offshore Engineering, Longyuan Zhenhua, China Merchants Heavy Industry, CIMC Raffles, Equinor, Shell, Total, etc. Oil and gas exploration companies are rapidly entering the offshore wind power industry. Relying on their rich experience in marine engineering and the advantages of special equipment, they have become new disruptors and challengers in the industry.

Green hydrogen cost trend forecast

The Eastern and Western markets are relatively independent, and the penetration process is expected to accelerate. According to BNEF data, Siemens Gamesa, Shanghai Electric and Mingyang Intelligent rank the top three with 1.91GW, 1.26GW and 0.88GW respectively in the ranking of new installed capacity of offshore wind power in 2020.

As of the end of 2020, due to the limitation of the transportation radius of wind turbines, the supply scope of domestic complete machine manufacturers is mainly local, while the markets in Europe, America, the Middle East and Africa are mainly dominated by machine manufacturers from other countries. In the Chinese market, in 2016 and before, the market was mainly dominated by Shanghai Electric, with Goldwind and Envision Energy accounting for about 8% of the market;

Subsequently, Goldwind and Envision Energy rose rapidly, and Shanghai Electric’s market share dropped significantly. In 2019, the rise of Mingyang Intelligence has formed a pattern of four major domestic offshore complete machine business. In 2020, the combined market share of China’s offshore wind power market of the four OEMs will reach 83.25%.

In other markets, if the Chinese market is not considered, since 2017, Siemens Gamesa has maintained its dominance, Vestas has maintained the second place, and the installed capacity of GE and Senvion has remained low throughout the year.

It should be noted that, since offshore wind power is still in its infancy globally, the centralized hoisting of individual projects may cause large fluctuations in the market share of complete machine manufacturers, and the market competition pattern has not yet stabilized.

According to GE’s recent announcement of offshore wind turbine types and bids, it is expected that GE’s market share will increase significantly in the next two years. In the past two years, with the rise of investment, Southeast Asia, South Asia, South America and other regions are also joining the army of offshore wind power development. Chinese OEMs have already sold offshore wind turbines overseas;

Some giant companies have long sensed the trend of China’s offshore wind power development, and they have built factories in the local area, posing a certain threat to local manufacturers. With the advent of the era of high growth of global offshore wind power, the downstream markets of Chinese/Western OEMs will penetrate each other, and head-on competition is imminent.

The gross profit margin at sea is significantly higher than that on land, and the increase in the proportion of shipments has greatly boosted the profitability of leading companies. Compared with onshore wind turbines, offshore wind power units have higher requirements on load design, environmental adaptability and complex working condition control, and the gross profit margin is generally higher than that of onshore units.

Generally speaking, the gross profit margin of onshore wind turbines sold in China is generally at the level of 10%-15% (2020), while the gross profit margin of offshore wind turbines is basically above 20%.

According to the electric wind power prospectus, in 2020, the gross profit rate of the company’s 4.X onshore wind turbines will be 11.09%, and the gross profit margin of offshore wind turbines of the same capacity will be as high as 26.16%.

Although the higher gross profit margin of offshore wind power is related to the growth stage of the industry, the overall design of offshore wind power is higher than that of onshore wind power, so in the long run, it will maintain a higher gross profit margin than onshore wind power.

After the rush to install onshore wind power, the growth rate of the onshore wind power industry has slowed down, and the industry leaders with increased offshore wind power shipments and business share are expected to embrace both volume and profit, and China’s complete machine industry structure is expected to undergo major changes.

In addition to the four leading players in the offshore wind power market in China, complete machine companies including Yunda Co., Ltd., China Marine Equipment Co., Ltd., and Dongfang Electric have active deployments in the field of offshore wind power.

For the complete machine manufacturers whose shipments are in the second and third tiers of the industry, due to the small base of shipments, the increase in the shipments of offshore wind power will bring great flexibility to the performance.

Ranking of Offshore Wind Power Installed by OEMs in 2020

Offshore wind power assist components

The “two seas strategy” is expected to change the future pattern of parts and components. Selecting typical parts companies in the wind power industry (the revenue of wind power equipment manufacturing business accounts for more than 75% of the company’s total revenue), and comparing the proportion of their overseas revenue, it can be found that domestic parts manufacturers can be divided into three categories:

The first category of companies is mainly for the Chinese market (such as Xinqianglian, Riyue, Tianneng Heavy Industry, Dongfang Cable, Hengrun);

The second category of companies has a relatively high proportion of business in various countries, but the proportion of business in various countries in the world has dropped significantly due to the rush to install/epidemic factors last year (such as Taisheng Wind Energy, Tianshun Wind Energy);

The third category of companies has a relatively high proportion of business in various countries in the world and has not decreased much in the last year (such as Jinlei Co., Ltd., Jixin Technology). The first type of company market is currently mainly in the domestic or overseas market with a relatively low sales growth rate, and there is huge room for growth in the overseas market in the future;

The second type of companies are mainly constrained by capacity constraints, and give priority to domestic orders under the tide of domestic rush installations. With the continuous release of production capacity, overseas markets are expected to quickly open up the situation;

The third type of companies maintain stable cooperative relations with global customers, and have good potential in customer extension and development. In terms of offshore wind power, at present, all Chinese component manufacturers have just set foot in, and few companies in the annual report separately disclose the revenue of offshore wind power business. this

Since 2008, parts manufacturers have proposed the “two seas” strategy. With the continuous increase of the proportion of offshore wind power in each company’s business, the competition pattern of parts and components is expected to change greatly.

The technical barriers in some aspects of offshore wind power are relatively high, and the know-how advantage of the industry leader is gradually highlighted. Due to the difficulty and high cost of operation and maintenance of offshore wind power, compared with onshore wind power, the reliability requirements of the whole machine and components are higher, and the know-how advantage of industry leaders will be more prominent on offshore than onshore.

Among many parts and components, the main shaft, bearing, gear box and cable have high technical barriers due to the extremely high maintenance cost. In terms of spindles, due to the harsher and more complex offshore operating environment, and higher requirements for spindle strength, toughness and uniformity, small and medium-sized forging/casting companies will be blocked from the offshore wind power spindle market.

Wind power bearings include main shaft bearings, pitch bearings, yaw bearings, gearbox bearings and motor bearings. Among them, offshore wind power main shaft bearings are basically all imported due to safety and reliability considerations, but some manufacturers have entered the testing stage of the whole machine factory. It is expected that the localization rate of offshore wind power spindle bearings will increase significantly in the next 2-3 years.

For doubly-fed and semi-direct-drive offshore wind turbines, gearbox reliability is the core component that determines MTBF (mean time between failures), while the price of offshore wind gearboxes is not much different from that of onshore wind turbines, only with cost advantages and a large number of Industry leaders with accumulated experience are expected to open up the offshore wind power market.

In terms of cables, offshore wind power has different requirements for cables in various stages of project construction, operation and maintenance, and there are high technical barriers in subdivisions such as ultra-high voltage DC/AC cables, optoelectronic composite cables, dynamic cables, and umbilical cables.

Some links are still in the R&D and testing stage (such as DC submarine cables above ±500kV, floating offshore wind power dynamic cables, and high-reliability joint technology), and there is still a lot of room for technology update and replacement.

In addition, submarine cables require dedicated laying/operation and maintenance vessels and teams as logistical support, and enterprises are required to have full life cycle service capabilities.

The market share of major offshore wind power manufacturers in the global market (excluding China) over the years

The market share of major offshore wind power manufacturers in the global market (excluding China) over the years

The expansion of the leading production capacity/proportion of the business of Haifeng components brings flexibility in performance. Different from the complete machine link, China’s leading parts and components enterprises have the ability to supply the world. In the past two years, leading enterprises have stepped up the layout of offshore wind power production capacity. The transportation and installation of blades and other difficult links.

Among them, the blade segment is the most difficult to transport, so mainstream manufacturers at home and abroad have basically completed the production capacity layout of blades for offshore wind power, and the construction of special offshore capacity in other segments is still under construction.

It should be pointed out that the production capacity of large components of offshore wind power is highly dependent on scarce resources such as wharfs and shorelines, and companies with coastal land resources will have a significant advantage in the process of capacity expansion.

Generally speaking, the gross profit margin of offshore wind power supporting parts is generally higher than that of land, and the increase in the proportion of offshore wind power business brought about by capacity expansion will bring strong performance flexibility to leading parts and components companies.

Taking the cable segment as an example, the gross profit rate of submarine cables for typical enterprises in 2020 will be over 50%, while the gross profit rate of land cable products is only slightly higher than 10%. kinetic energy.

The Vietnamese market takes the lead in increasing volume

As mentioned earlier, many countries, including Europe, the United States, Japan, South Korea, Vietnam and other countries, have formulated aggressive offshore wind power development goals. In addition to exporting parts and components to machine manufacturers in various countries, Chinese companies are beginning to directly participate in the development and construction of overseas wind power projects.

Up to now, Chinese enterprises have made rapid progress in the Vietnamese market, including complete machine manufacturers, parts manufacturers and EPC general contractors have all made gains in the Vietnamese market, and Chinese enterprises have been initially recognized in the Vietnamese market.

It should be pointed out that at present, most of the export sales of complete machines and key components are completed through the wind power projects that have won the bids for the general contract of Chinese enterprises, and the enterprises of complete machines and key components have not yet achieved large-scale direct bids for projects around the world;

With the increasing popularity and reputation of Chinese wind power companies and the constant familiarity with other countries’ standards/credit/management systems, China’s wind power industry chain is expected to go abroad in an all-round way and enjoy the dividends of offshore wind power development.

The installed capacity and market share of offshore wind power in the Chinese market over the yearsThe installed capacity and market share of offshore wind power in the Chinese market over the years

Investment strategies and key companies

In terms of parts and components, according to the sales target, it can be divided into sales to owners (tower, pile foundation, jacket) and sales to OEMs (other parts).

The main costs of towers, pile foundations and jackets are raw materials including medium and heavy plates, cement, concrete, etc. This year, the costs can basically be transferred to the owners under the condition of an overall increase in raw material prices.

Taking the onshore tower as an example, the price of low-alloy medium and heavy plate for towers has dropped rapidly after reaching a high point in mid-May this year. At the level of RMB/ton-11000RMB/ton, the gross profit per ton is about 1500 RMB/ton-2000 RMB/ton, maintaining the level of the same period last year.

Mingyang Intelligence

Offshore wind power shipments have increased significantly, and floating type leads the long-term development of the industry

Mingyang Intelligent adheres to the ultra-compact semi-direct drive technology route, and is forward-looking in the layout of large-capacity offshore wind turbines while the onshore wind power market continues to improve.

Based on the analysis of a large number of marine meteorological and working conditions data, it has launched customized offshore wind power series products according to the characteristics of different regions of China. It is a leading manufacturer of offshore wind turbines in China.

According to the data, as of the end of 2019, the cumulative installed capacity of offshore wind turbines of 5.0MW and above in the country was 1217MW, and Mingyang Intelligent accounted for 29.6%; .

The company adheres to the strategy of self-research and production of key components, and has a high market price risk resistance capability. The gross profit margin of onshore wind turbines is maintained at 18%-19%, and the gross profit margin of offshore wind turbines is maintained at more than 20%.

As of the end of the first quarter of this year, the company’s wind turbine orders reached 15.77GW, a record high, of which offshore units accounted for 35%. In Q1 2021, the company’s external sales capacity will be 959MW (+33.4%), of which offshore shipments will be 294MW (+122.8%), accounting for 31% of shipments.

It is expected that the company’s onshore wind turbine shipments will be about 3GW in 2021, offshore wind turbine shipments will be 3-3.5GW, and onshore and offshore wind turbine shipments will maintain growth in 2022.

The proportion of offshore wind power shipment capacity in the company's total shipment capacityThe proportion of offshore wind power shipment capacity in the company’s total shipment capacity

In addition to the wind turbine sales business, the company vigorously strengthens the project (including two “integration”) reserves on the basis of adhering to the “rolling development” model.

In the future, the company will maintain a certain scale of its own power plants, and other reserve projects will obtain investment income through transfer, and there is huge room for performance enhancement.

In May of this year, the world’s first typhoon-resistant 5.5MW offshore floating test prototype developed by the company rolled off the production line in Yangjiang Industrial Base. It is the first complete machine manufacturer in my country to complete the development and production of a floating prototype. The prototype can resist up to 17 Class typhoon, using semi-submersible floating foundation.

Up to now, the mooring suction anchors, foundation platforms, towers, etc. of the project have been completed, and the first prototype is expected to be connected to the grid at the Three Gorges Yangxishapa Offshore Wind Farm before the end of the year.

It is expected that the company’s floating wind power technology will initially have commercialization conditions from 2023, and is expected to lead the long-term development direction of the wind power industry.

Yunda Shares

Gross profit margin/market share recovery, new products are expected to open up the offshore wind power market

The last round of price war and the price increase of raw materials under the rush to install in 2020 have hit the company’s gross profit margin/net profit margin.

Under the circumstance of the sharp increase in the price of spare parts last year, the company insisted on focusing on the interests of customers, insisting on fulfilling the contract, and the concept of honest operation has been recognized by a large number of owners. In 2020, the company made a major breakthrough in customer marketing, signed strategic cooperation agreements with key owners such as CGN New Energy and Three Gorges New Energy, and won the only “five-star supplier” of CGN New Energy in 2020.

According to statistics, as of the end of May this year, the company has added more than 6GW of new orders this year, ranking among the top in the market (the company has 6.16GW of orders by the end of 2020), and the company’s future market share increase is more certain.

In addition, with the sharp correction in the purchase price of parts and components this year, the company’s profitability has been greatly restored. In the first quarter of 2021, the company’s sales gross profit margin and net profit margin reached 16.35% and 2.15% respectively (13.84% and 1.515% for the whole year of 2020).

Judging by the selling price and order situation, we expect the company’s gross profit margin will remain above 16% for the whole year.

Copper price trend

Copper price trend (average price of Changjiang Nonferrous Metals market Unit: RMB/ton)

The company has made a major breakthrough in market development this year. By the end of May this year, it has won nearly 500MW of wind power orders in Vietnam. Recently, the company launched the onshore WD175-6000/6250 model and the offshore 7MW platform, announcing that the company officially joined the circle of large-scale and offshore wind power friends.

According to the information, the company has signed the first batch of overseas offshore wind turbine procurement contracts and will complete the delivery within this year; in addition, the company’s controlling shareholder Zhejiang Electromechanical Group recently signed a strategic cooperation framework agreement with Zhejiang Energy Group to strengthen cooperation in offshore wind power and other fields .

It is expected that a large share of the incremental demand for offshore wind power in Zhejiang Province during the “14th Five-Year Plan” will be undertaken by the company, and offshore wind power is expected to become a new growth point for the company’s business.

In addition, 2020 is also a turning point for the company’s power generation business. All 200MW wind farms controlled by the company will be connected to the grid at the end of 2020, and the first phase of the 50MW project in Yucheng has also started smoothly. The power generation business will substantially help the company’s performance this year.

In addition, in 2020, the company signed new wind power and photovoltaic development agreements of 1.7GW and 0.8GW respectively, laying a good foundation for the growth of the company’s power generation business.

Oriental Cable

Master the core technology of submarine cable, and the expansion of production capacity helps the company to open up new markets

As an industry-leading supplier of cables and system solutions, the company now has three major product areas: terrestrial cable systems, submarine cable systems, and marine engineering. The system R&D and production capacity of cables leads the industry in core technology fields such as flexible joints, dynamic cables and umbilical cables.

Products are widely used in electric power, petrochemical, rail transportation, offshore wind power, offshore oil and gas exploration and production and other fields. As of the first quarter of this year, the company’s total orders on hand were 7.780 billion yuan, of which submarine cable systems and marine engineering were 5.724 billion RMB, accounting for 73.57%.

Price trend of medium and heavy plate

Price trend of medium and heavy plate (national low alloy 20mm medium plate unit: RMB/ton)

The company’s special dynamic cable for floating offshore wind power will be used in the Three Gorges Yangxisha Pa Mingyang intelligent floating prototype in the near future, creating a precedent for floating dynamic cables in China. The country’s first offshore oil platform shore power project was picked up by the company and delivered in Qinhuangdao and Caofeidian in April this year.

At the end of last year, the company successfully won the bid for the European submarine cable project, and will provide photovoltaic composite submarine cables for the Skye-Harris island link project of the Southern Scotland Power Grid Company to meet the electricity needs of nearly 20,000 residents on the island.

At the end of June this year, the first overseas offshore wind power submarine cable EPC general contract project undertaken by the company (Vietnam Binh Dai 310MW offshore wind farm) submarine cable laying work was officially launched, which is also the first offshore wind power submarine cable undertaken by a Chinese submarine cable company in Southeast Asia. EPC project.

In addition to the advantageous field of cables, the company has launched a series of high-quality home improvement wire products to actively explore the C-end market. We expect that offshore wind power, offshore oil and gas, and civil low-voltage cables will become the company’s key development directions during the “14th Five-Year Plan” period.

In order to meet the rapid growth of downstream demand, the company actively promotes production capacity expansion. The company’s Ningbo Beilun offshore engineering base will be put into operation in July this year, adding about 1,400 kilometers of new submarine cable production capacity and about 90,000 kilometers of new intelligent transportation equipment cable production capacity.

The company’s Guangdong Yangjiang Industrial Base is expected to start construction in the fourth quarter of this year and be put into operation by the end of 2022. It is expected to start generating revenue from 2023, mainly targeting deep sea cables. It is expected to generate an annual revenue scale of 1.3-1.5 billion yuan after full production.

RIYUE Shares

Capacity expansion + structure optimization, wind power and nuclear power have become bipolar business growth

The company is a large-scale ductile iron leading enterprise, mainly engaged in the research and development and production of special castings for wind power, injection molding machines and other equipment. By the end of 2020, the company has formed an annual production capacity of 400,000 tons of castings, and the second phase of Haizhuang’s key castings has a production capacity of 80,000 tons and is expected to be put into production by the end of this year;

The company’s IPO project has an annual output of 100,000 tons of large-scale casting finishing production capacity, and the annual output of 120,000 tons of large-scale offshore wind power key components finishing project began to release production capacity in July 2020, and the project is expected to be completed in 2021.

The company’s 220,000-ton large-scale casting finishing project, which was scheduled to be added in November 2020, has been under construction. By then, the company will have a casting capacity of 480,000 tons + 440,000 tons of finishing capacity, and both volume and profit are just around the corner.

The company proposed in its 2020 annual report that it will start the construction of a 150,000-ton-per-year casting capacity expansion project in a timely manner, and the company’s profitability is expected to further expand.

Yunda Shares Sales Gross Margin,Net Margin

Yunda Shares Sales Gross Margin,Net Margin

From 2017 to 2020, the company’s wind power casting sales volume growth rate was as high as 147% CAGR, and the gross profit per ton increased steadily. With the gradual completion of the finishing production capacity, the gross profit margin increased rapidly, and now it has reached 28.99%.

In terms of injection molding machines, the company’s sales volume, gross profit per ton and gross profit margin have remained stable in recent years. In the future, as the company’s production capacity expands, the injection molding machine business is expected to maintain stable growth in line with the industry.

The company’s other casting business mainly includes diesel engine castings, machining center castings and other products. In November 2019, the company established Ningbo Riyue Nuclear Equipment Manufacturing Co., Ltd. to carry out the research, development and production of nuclear power spent fuel transfer storage tanks; in June this year, the third 100-ton ductile iron spent fuel transport container produced by the company was shipped.

The ductile iron spent fuel container castings are ultra-thick-walled cylindrical castings, with a single piece weighing more than 100 tons. The primary difficulty in the production of castings is to shorten the cooling time in the hot zone area, prevent the occurrence of defects such as fragmented graphite, and avoid the deterioration of the casting performance;

Secondly, it is necessary to consider the low temperature and multi-load environment during transportation to ensure the uniformity and density of castings; thirdly, casting castings need to complete the production organization of molten iron in a very short period of time. There are only a few capable production enterprises.

The company’s nuclear power spent fuel transfer storage tank products are expected to start mass production this year and next, and the high value and gross profit level are expected to make it a new growth pole for the company’s business.

Tianshun wind energy

The three-legged tower + blade + power station supports the sustainable development of the company’s performance

Under the condition of rising commodity prices this year, the company’s tower business can basically realize the downstream transmission of costs, and the gross profit per ton is maintained at the level of 1500 RMB-2000 RMB.

The company actively responds to the two major trends of “regional concentration and customer concentration” in future wind power development. During the “14th Five-Year Plan” period, the tower business will focus on the “Three North” regions, the Central Plains region and the offshore region, and focus on serving the development needs of central and state-owned enterprises’ wind power projects. Refinement of production capacity and precise layout.

By the end of 2020, the company’s total onshore tower production capacity is 600,000 tons, which is expected to reach 750,000-800,000 tons this year, and 1.2 million tons by the end of 2022.

On the offshore side, the company’s 300,000-ton Sheyang + 300,000-ton offshore production capacity in Germany is expected to be put into operation by the end of 2022, and will begin to contribute to performance in 2023.

The company will export about 120,000 tons of towers in 2020. After the German offshore engineering base is put into operation, the cost related to the export of towers will be greatly reduced, and overseas business is expected to become an important engine for performance growth.

Casting sales capacityIn terms of blades, the company’s overall gross profit margin dropped from 31.33% in 2019 to 21.29% in 2020 due to the substantial increase in blade sales, which led to a decline in the proportion of the mold business.

By the end of 2020, the company has 14 blade production lines and 4 mold production lines. The production capacity is expected to double in the next three years, and the sales volume of blades is expected to exceed 2,000 sets (6,000 pieces). In terms of customers, the company’s products were mainly aimed at Envision Energy. This year, it is expected to develop new customers including Goldwind Technology and Yunda.

In terms of power station operation, the company has embraced the arrival of the era where resources are king in advance. As of the end of June, the reserve resource volume is about 15GW. In the future, it will adopt the “self-operated + transfer” asset-light operation model. The large-scale transfer is expected to start in 2022. Profits are expected to increase substantially through the transfer of power plants.

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