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Offshore Wind Subsidies and the Shift Toward Chinese Turbines in European Onshore Projects

Offshore Wind Subsidies Could Push Developer to Choose Chinese Turbines for Onshore Projects

Introduction

As the global energy transition accelerates, the wind energy sector is undergoing significant transformations. One of the most notable developments is the growing disparity between offshore and onshore wind economics, driven in part by government subsidies. In Denmark, a country long considered a pioneer in wind energy, this shift is prompting unexpected strategic decisions. Danish developer Eurowind Energy A/S is now considering the use of Chinese-manufactured turbines for its future onshore wind projects. This move, while controversial, underscores the complex interplay between policy, cost competitiveness, and global supply chains in the renewable energy sector.

The Changing Economics of Wind Energy

Offshore Wind: A Subsidy-Driven Boom

Offshore wind has seen a surge in investment and development over the past decade, largely due to generous government subsidies and policy support. In Europe, countries like the United Kingdom, Germany, and Denmark have implemented feed-in tariffs, Contracts for Difference (CfDs), and other financial mechanisms to encourage offshore wind deployment. These subsidies have helped reduce the levelized cost of electricity (LCOE) for offshore wind, making it increasingly competitive with traditional energy sources.

According to the International Renewable Energy Agency (IRENA), the global weighted-average LCOE for offshore wind fell by 48% between 2010 and 2020. In Denmark, the government has committed to expanding offshore wind capacity significantly, with plans to develop energy islands and large-scale offshore wind farms in the North Sea and Baltic Sea.

Onshore Wind: Facing Competitive Pressure

In contrast, onshore wind—once the most cost-effective form of renewable energy—has seen its relative competitiveness decline. While still cheaper in absolute terms, onshore wind projects are receiving less policy attention and fewer subsidies compared to their offshore counterparts. This shift is creating a challenging environment for developers who must now find new ways to reduce costs and maintain profitability.

Eurowind’s Strategic Pivot

Background on Eurowind Energy A/S

Founded in 2006, Eurowind Energy A/S is a Danish renewable energy developer with a strong portfolio of onshore wind and solar projects across Europe. The company has traditionally relied on European turbine manufacturers such as Vestas and Siemens Gamesa. However, rising costs and changing subsidy structures are prompting a reevaluation of this strategy.

Considering Chinese Turbines

In a recent statement, Eurowind revealed that it is seriously considering the use of Chinese-manufactured turbines for its future onshore wind projects in Denmark. The company cited the growing cost gap between onshore and offshore wind, exacerbated by government subsidies favoring offshore development, as a key factor in this decision.

Chinese turbine manufacturers such as Goldwind, Envision, and Mingyang have made significant technological advancements in recent years. These companies now offer competitive products at lower prices, thanks in part to economies of scale and lower labor costs. For developers like Eurowind, sourcing turbines from China could offer substantial cost savings—potentially making onshore projects viable again in a subsidy-scarce environment.

Globalization of the Wind Turbine Market

Rise of Chinese Manufacturers

China is the world’s largest wind power market, both in terms of installed capacity and manufacturing output. In 2022, Chinese companies accounted for over 60% of global wind turbine installations. The country’s leading manufacturers have expanded their international presence, offering turbines that are not only cost-effective but also increasingly reliable and technologically advanced.

Goldwind: One of the largest wind turbine manufacturers globally, with a strong focus on innovation and international expansion.
Envision: Known for its smart wind turbines and digital energy solutions, Envision has projects in Europe, Asia, and the Americas.
Mingyang: Specializes in both onshore and offshore turbines, with a growing footprint in overseas markets.

European Concerns and Regulatory Hurdles

Despite their cost advantages, Chinese turbines face significant scrutiny in European markets. Concerns about quality, cybersecurity, and geopolitical tensions have led to calls for stricter regulations and even potential bans on Chinese equipment in critical infrastructure. The European Commission has launched investigations into foreign subsidies and is considering measures to protect domestic industries.

Nevertheless, some developers argue that excluding Chinese suppliers could stifle competition and drive up costs. As Eurowind’s case illustrates, the need for cost-effective solutions may outweigh political and regulatory concerns—especially in a market where subsidies are increasingly skewed toward offshore projects.

Case Studies: Shifting Supply Chains in Europe

Case Study 1: Eurowind’s Pilot Project

While Eurowind has not yet confirmed a specific project using Chinese turbines, industry insiders suggest that a pilot project could be announced within the next year. The company is reportedly in talks with multiple Chinese manufacturers and is evaluating turbine models for compatibility with European grid standards and environmental regulations.

Case Study 2: Eastern European Adoption

In countries like Romania and Bulgaria, where cost sensitivity is high and regulatory barriers are lower, Chinese turbines have already made inroads. Several wind farms in these regions are now operating with Chinese equipment, demonstrating that the technology can meet European performance standards when properly integrated.

Case Study 3: Germany’s Mixed Approach

Germany, Europe’s largest wind market, has taken a more cautious approach. While most projects still rely on domestic or European suppliers, some developers have begun exploring Chinese options for repowering older wind farms. These projects often involve hybrid solutions, combining European control systems with Chinese hardware to mitigate risk.

Implications for the European Wind Industry

Competitive Pressure on European Manufacturers

The potential entry of Chinese turbines into core European markets could intensify competition for established manufacturers like Vestas, Siemens Gamesa, and Nordex. These companies are already grappling with supply chain disruptions, rising raw material costs, and declining profit margins. The added pressure from low-cost Chinese competitors could force further consolidation and innovation within the industry.

Policy Recalibration Needed?

Eurowind’s strategic pivot raises important questions about the effectiveness and fairness of current subsidy regimes. If offshore wind continues to receive disproportionate support, onshore developers may be compelled to seek cost savings through foreign suppliers—potentially undermining domestic manufacturing and energy security goals.

Policymakers may need to consider more balanced support mechanisms that reflect the full spectrum of renewable energy technologies. This could include targeted incentives for onshore wind, streamlined permitting processes, and support for domestic supply chains.