After the “anti-involution” wave, the wind power industry has entered a cycle of profit recovery.
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Morgan Stanley raises its rating on China's wind power sector, believing that the sector may usher in a recovery following efforts to end internal competition.
According to Chasing Wind Trading Desk news, Morgan Stanley pointed out in its latest research report that after nearly three years of downward cycle, the value chain of China's wind power sector has successfully put an end to involution through industry self-discipline, leading to a turnaround in prices and overall profitability at the beginning of 2025. The investment bank expects domestic wind power installation demand to remain resilient and is optimistic about investment opportunities in key component suppliers and submarine cable companies.
The report shows that, after experiencing a difficult period from 2022 to 2024, China's wind power industry has successfully reversed the vicious competition through internal self-regulation mechanisms. Morgan Stanley expects that during the 15th Five-Year Plan period, the average annual new installed capacity will exceed 110 GW, and may reach about 120 GW during 2028–2030.
The report also foresees that, benefiting from a more favorable power curve and electricity price outlook, wind power will have stronger investment appeal than photovoltaic power, and offshore wind power installations will resume accelerated growth.
Industry self-discipline drives price recovery
Morgan Stanley analyst Eva Hou pointed out that the key factors for China's wind power industry successfully ending involution include strong demand growth, the establishment of industry self-discipline mechanisms, and supply chain integration. Data show that in the first eight months of 2025, onshore wind turbine bidding prices rose by 8% compared with 2024, and offshore turbine prices rose by 12%.
This achievement is mainly attributed to:
Strong demand growth: Annual new installed capacity grew from 48 GW in 2021 and 38 GW in 2022, to 76 GW, 79 GW, and 54 GW in 2023, 2024, and the first seven months of 2025, respectively. Annual bidding volume also soared from 54 GW in 2021 to 164 GW in 2024.
Industry self-discipline constraints: Twelve major turbine manufacturers jointly signed the "Fair Competition Self-Discipline Convention for China's Wind Power Industry" in October 2024. Operators are now focusing more on quality rather than price, which is related to the increase in turbine accidents in recent years.
Supply chain integration: Due to pricing pressure on complete turbine manufacturers, new investment in key components has continuously decreased. Meanwhile, as turbine power ratings increase, outdated production capacity is being phased out.
Optimistic demand outlook during the 15th Five-Year Plan
Morgan Stanley expects wind power installation to accelerate during the 15th Five-Year Plan, with annual new installed capacity exceeding 110 GW, and reaching about 120 GW during 2028–2030. The main driving factors include: compared to solar power generation, wind power demonstrates stronger investment appeal due to a more favorable power curve and electricity price prospects; offshore wind power installations will reaccelerate; and demand for onshore turbine replacements will grow.
Notice No. 136 has created a relatively favorable policy environment for the wind power industry. Compared with photovoltaic power, wind power has stronger investment appeal among developers due to a better power curve and electricity price outlook. Huadian New Energy and CGN New Energy have committed to setting wind and photovoltaic installed capacity ratios at 1:1 and 2:1, respectively, during the 15th Five-Year Plan period.
Regarding offshore wind power, the “Deepwater Offshore Wind Power Development Management Measures” are expected to be issued in Q4 2025 or Q1 2026, providing further support for industry development. Bidding and construction of offshore wind projects in key areas such as Guangdong, Shandong, and Jiangsu are expected to accelerate.
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