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Mackenzie:China's Renewable Energy Manufacturing Costs 200% Lower Than West's

published: 2024-05-29 18:03

A new report from Wood Mackenzie reveals that in major competing markets, Chinese renewable energy manufacturers are 200% cheaper to manufacture than Western players. Rapidly falling prices, combined with integrated supply chains and high standards of performance, have enabled Chinese renewable energy manufacturers to meet more than 65% of total global demand. Evidence suggests that non-Chinese-made products are twice as expensive as comparable Chinese-made products.

Xiaoyang Li, head of Asia-Pacific power and renewable energy research at Wood Mackenzie, said strong domestic supply chains allow Chinese manufacturers to produce equipment overseas at competitive prices despite price increases due to inflation uncertainty and rising production costs.

Chinese manufacturers are targeting overseas markets with localized demand to become regional manufacturing hubs, the consultancy said. China's exports of renewable energy products grew by 35% from 2019 to 2023, mainly due to its competitive pricing and capacity advantages. During the same period, investment in solar and wind energy projects increased by 23 percent, while energy cells overtook solar modules as China's main renewable energy export commodity.

Chinese companies' interest in investing in overseas renewable energy projects is on the rise, but progress has been slow due to high development risks and uncertain revenue streams, the report said. Chinese renewable energy companies tend to invest in markets with high power demand, stable business environments and predictable revenue streams. Supported by strong equipment supply chains from Chinese manufacturers, Chinese solar and storage investors seeking overseas investment opportunities favor greenfield investments, Li said.

In April this year, China's cumulative installed PV capacity exceeded 670GW, with about 60.5GW added from January to April this year.

Source: https://mp.weixin.qq.com/s/fdeJDlyE1mtl74ajXLaLgw

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