(Yicai) Feb. 8 -- The profits of leading Chinese wind power equipment suppliers are expected to have shrunk last year, mainly because of an intense price war in the industry.

Ming Yang Smart Energy Group, one of China's top five wind power equipment suppliers, announced on Jan. 30 that its profit likely narrowed 85 percent to 90 percent to between CNY354 million and CNY530 million (USD49.8 and USD74.5) last year from the year before.

However, Ming Yang Smart Energy’s net profit decline is significantly larger than analysts’ predictions in October, meaning that the company had a very bad fourth-quarter performance. After Ming Yang Smart Energy reported last October that its net profit shrank 66 percent to CNY1.2 billion in the first three quarters from a year earlier, Haitong International Securities Group predicted that the firm’s annual net profit could reach CNY3.9 billion.

Shanghai Electric Wind Power Group also released its annual earnings forecast on Jan. 30. The wind turbine maker said it expects its net loss to have widened up to four-fold to between CNY1.2 billion and CNY1.3 billion (USD168.7 million and USD188.4 million) last year from the previous one.

Both firms attributed their declining performances to factors such as the intense price competition in the wind power industry, overall decrease in bid-winning prices of wind turbines, and falling sales of offshore wind turbines.

"The intense competition in the wind power market won't ease in the short term, even though the drop in product prices last year was not as significant as in the previous few years," a senior executive at a top wind turbine manufacturer told Yicai.

"The price war in the wind power industry is still ongoing, forcing wind turbine manufacturers to make their wind turbines bigger and more powerful to attract more wind farm developer clients," Chen Xiangyu, wind power analyst at Bloomberg New Energy Finance, told Yicai.

"Prices of offshore wind turbines continue to drop, while those of onshore wind turbines are falling at a slower pace. But onshore wind turbine prices are expected to remain low in the Chinese market in the short term," Chen noted.

At China Wind Power 2023, a wind power exhibition held in Beijing last October, Ming Yang Smart Energy unveiled the world's most powerful offshore wind turbine, with a rated capacity of 22 megawatts. Sany Renewable Energy, another Chinese wind power firm, showcased its new 15 MW onshore wind turbine and 16 MW offshore wind turbine at the same event.

China-made wind turbines had a rated capacity of about 2 MW in 2016, but their scale quickly rose to up to 6 MW, according to data by Ruixuan Consulting. The turbine's wind wheel diameter also rapidly increased.

As wind power equipment have become bigger and more powerful, land sizes, construction schedules, and operational costs for wind power farms could significantly decrease, an industry insider told Yicai. Meanwhile, as the wind wheel diameter is longer, the same wind speed can generate more power, the insider noted.

However, increasing the scale of the equipment can bring safety risks. For example, large wind towers at a wind power station in Inner Mongolia Autonomous Region collapsed due to a design issue last year, according to the Northeast China Energy Regulatory Bureau of National Energy Administration.

Editors: Tang Shihua, Futura Costaglione