Competition from China pulls wind turbine prices down in 2H

Wind turbines prices fell 4 percent due in larfge part to the competition from Chinese manufacturers and excess capacity to build the machines.

Turbine contracts signed in the second half of 2011 for delivery in 2013 dropped to 910,000 euros or US$1.2 million a megawatt compared with the previous six months.

The price was the lowest since the analyst began tracking prices in June 2008 and down from as much as 1.21 million euros a megawatt in 2009.

Competition in the market for wind turbines has depressed prices worldwide, trimming profits at companies led by Vestas Wind Systems A/S, the world’s largest turbine maker. Vestas, based in Aarhus, Denmark, reported a loss four times wider than analyst estimates in February, squeezed by Chinese competition including from Sinovel Wind Group Co. and Xinjiang Goldwind Science & Technology Co.

“Short-term pain among wind manufacturers is now undeniable and unavoidable,” Michael Liebreich, chief executive officer of Bloomberg New Energy Finance, said in the statement. The price drop is “good news on the demand side as wind is more competitive with coal and gas on a dollar-per-megawatt hour basis, which is vital given ever-lower levels of subsidy and support.”

Most turbine manufacturers expect further price declines this year and next and do not anticipate a recovery until 2014, according to the research company. The Bloomberg New Energy Finance Wind Turbine Price Index, which collects confidential data from 38 of the world’s largest buyers of wind turbines, showed prices dropped across the world including developing markets such as Brazil, Chile, Ecuador, Pakistan, Ethiopia and Australia as China competed for orders.

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