26 March 2025
The Bankability of Chinese Turbines in the Journey to Global Net Zero Targets for Offshore Wind
In this first part of a coming series on technology evolution for Floating Offshore Wind developments we introduce the issues surrounding the expected adoption of large-scale wind turbines from Chinese original equipment manufacturers (OEMs).
A delegation of leading offshore wind underwriters from Europe and London is set to embark on a week-long visit to China, where they will meet with top Chinese wind turbine OEMs, tour manufacturing facilities, and evaluate production processes, quality control measures, and testing capabilities. The trip has been organised in collaboration with the Lloyd’s Market Association (LMA). With governments imposing stringent net-zero targets, there is an urgent need to address the insurance challenges associated with developing larger and more advanced energy projects. This includes sourcing new and larger turbines from suppliers for fixed-bottom installations, as well as transitioning from smaller commercial to grid-scale floating arrays.
Global expansion and supply chain pressures
National renewable energy policies are accelerating offshore wind expansion, as countries not only across the UK and Europe but also Latin America and Asia-Pacific, pursue their energy transition targets. According to recent predictions, global offshore wind generation will grow from around 75 gigawatts (GW) of capacity in 2023 to more than 485 GW by 2033. An estimated 80% of the global offshore wind resource potential lies in areas with a water depth of more than 60 metres, making it more suitable for floating than fixed-bottom foundations. The Global Wind Energy Council predicts that 8.5 GW of floating offshore wind generation will likely be built globally by 20301. The sheer scale of development underway makes it likely that projects will need to try and consider Chinese OEMs, in addition to the tried-and-tested European suppliers.
GE Vernova’s decision to pause on new offshore turbine orders, due to an already two-to-three-year backlog, is adding pressure on the two remaining European OEMs in the global offshore wind sector. These OEMs are likely facing increased order book enquiries, while global developers face mounting challenges to secure greater generating capacity at a commercial scale.
China has long been a key component supplier to European OEMs , raising the question of whether Chinese OEMs are now positioned to step up as tier-one suppliers beyond their domestic market.
In terms of current deals, Ming Yang Smart Energy has reportedly signed to produce 18.8 MW floating WTGs in Italy for a 2.8 GW project near Sicily and to supply 18.5 MW WTGs for the 270 MW Waterkant wind farm off Germany. Two other Chinese manufacturers, CSSC Haizhuang and Dongfang, have separately announced plans to produce 18 MW turbines.
Global Offshore Wind Generation by 2033s
Building confidence
Closer to home, Scotland’s Green Volt project, expected to be Europe’s first commercial-scale floating offshore wind farm with a generating capacity of 560 MW, was reportedly considering Ming Yang as a potential supplier, indicating a shift towards using Chinese WTGs. However, this has recently been denied by Green Volt who have stated that ‘no turbine supplier has been confirmed’. As CAPEX spending continues to rise, some developers may need to evaluate Chinese WTGs to achieve final investment decisions and meet ambitious offshore wind growth plans.
General concerns about the utilisation of Chinese WTG’s are often centred around the following:
• Rapid scaling of turbine sizes
• The inability of the wider supply chain to keep up, particularly in terms of vessel and crane capacities
• Increased concerns around what is being lost in such savings, e.g., the general quality of materials and components, whilst turbines may be up to a third cheaper than their European equivalents
• The extent of full-type and site-specific certification
• Willingness to share comprehensive operating data
• The extent of warranty provisions
• Lead times on replacement/critical spares and the level of post-sale service in-region
• Security concerns, around the use of Chinese WTGs
These questions need to be carefully considered by developers. Chinese OEMs must demonstrate their commitment to address concerns to build confidence among insurers and the international finance market. Recently, at the 5th Annual Floating Wind Europe Conference in Amsterdam, it was highlighted that some lenders remain resistant to funding projects that incorporate Chinese turbines, given that bankability is intrinsically tied to insurability. Insights from the returning underwriter delegation will be of interest to our clients, helping determine whether sentiment towards Chinese turbines is evolving.
One potential solution floated is around the involvement of European contractors in taking over the Service Maintenance Agreement (SMA) to offer in-region servicing as part of the solution.
Final thoughts
The timing of the LMA delegation’s visit coincides with the UK’s Energy and Net Zero secretary travelling to China for discussions with officials, including topics on green technology supply chains. Ultimately, meeting global net zero targets may require broader acceptance of Chinese WTGs to support developers’ ambitions for grid-scale offshore wind projects.
Our second instalment, focusing on coverage solutions for floating projects, will follow after insurers have reviewed their engagement with the Chinese OEMs.
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