(Yicai) Oct. 17 -- Twelve of China’s leading manufacturers of wind turbines have signed an agreement, pledging to be self-discipled so as to bring to an end a period of price undercutting that has eroded their earnings.

Goldwind Science & Technology, Envision Energy, Windey Energy Technology Group, Ming Yang Smart Energy Group, Sany Renewable Energy, and seven others will refrain from malicious price-cutting and negative campaigns against rivals, according to the pact inked yesterday at the 2024 Beijing International Wind Energy Conference and Exhibition. 

They will adhere to legal pricing practices, promote disciplined pricing strategies, and establish actionable industry self-regulation rules, according to some key points outlined in the agreement.

The pact aims to address the issue of cutthroat price competition, said Qin Haiyan, secretary-general of the China Renewable Energy Society's Wind Energy Committee. “It prohibits signatories from selling products or providing services at prices lower than they cost,” he said.

The deal also requires companies to reject unfair contracts, avoid making unrealistic promises or agreements that exceed their capabilities, and refrain from slandering competitors in the domestic and international markets to gain an advantage, Qin pointed out.

An agreement has been urgently needed because most leading manufacturers are operating at a loss, Qin pointed out. "Vicious price competition hinders the development of high-quality wind power projects and threatens the survival of wind power equipment makers, restricting the sustainable development of the entire industry,” he said.

Wind power generation equipment is a high-value industry with a long lifecycle, said Lou Yimin, senior vice president of Envision Energy. "Customers should focus more on the long-term benefits these devices can bring throughout their operational lifecycle rather than just the product's market price,” he noted.

The sector has performed poorly over the past two years. Except for Ming Yang and Goldwind, which saw their profit jump in the first half of this year, most of their listed peers increased their revenues but at the price of profitability. Sany Renewable's net profit plunged 47 percent in the six months ended June 30 from a year ago, mainly as a result of the price war.

Wind power has secured a crucial role in China's energy mix. The country's total power generation capacity reached 3.13 billion kilowatts as of the end of August, with wind power accounting for around 470 million kW, ranking third after thermal power at 1.41 billion kW and solar energy at 750 million kW, according to the National Energy Administration. 

Editors: Tang Shihua, Martin Kadiev