How Goldwind seized ‘window of opportunity’ in quest to conquer Brazil

That factory, a former GE Renewable Energy plant, could serve as a launchpad not just for Goldwind’s ambitions in Brazil but in the Americas generally, where it lays claim to having a larger footprint than any of its Chinese competitors.

Its opening also comes at a crossroads for Brazil’s wind sector, with the squeeze from hydropower and grid constraint issues having rocked OEMs in what was last year the world’s third-largest market for onshore wind turbines.

The turbines were ill-suited to the coastal environment many were installed in and were suffering from rust among other issues, said Liang. When Goldwind struck the deal, only 30% were working properly, he said. Now, it is 99.5%.

“Basically, we saved [Energimp] from bankruptcy.”

That contract was crucial to Goldwind’s “learning curve” in Brazil, said Liang. The team it pulled together for the project is still the core of its current construction and service unit, he said. The deal also helped Goldwind develop its current network of contractors.

Ahead of buying its new factory, Goldwind spent several years lining up its suppliers in Brazil. Localising the production of turbines allows buyers access to a highly favourable credit line known as FINAME from the Brazilian Development Bank (BNDES).

In that time, Liang said Goldwind was however able to take advantage of a “window of opportunity” in Brazil, when it was exempting import duties on turbines larger than 3.3MW – the logic being these were not available domestically.

That exemption, which ended last year, allowed Goldwind to supply 4.5MW turbines for two projects totalling 260MW for China General Nuclear Power Group; and 6MW turbines for a 648MW project for China Three Gorges, helping it strengthen its foothold in the market.

Goldwind always knew this was an “opportunistic” window and it couldn’t go on importing turbines forever, said Liang. “We know that if we are going to be a reliable supplier in the Brazilian market, we need to act as a Brazilian company.”

New Bahia base can be springboard for ambitions

Goldwind will produce turbines with power ratings between 5.3-7.5MW at its new factory, said Liang.

It will assemble nacelles and hubs at its factory while buying blades and towers locally. One of those ‘local’ suppliers will in fact be another Chinese company, Sinoma, which has set up a blade plant in the same Camaçari hub as Goldwind.

FINAME rules require that at least 21 of 34 listed turbine components must be sourced locally. Goldwind has localised 25, which Liang says gives the OEM some breathing room.

Overall, Goldwind is “very satisfied” with the Brazilian supply chain, said Liang. It’s not “too competitive,” he said, for each type of component you can find three or four suppliers. “But they are very well-qualified suppliers.”

Goldwind hopes to produce around 150 wind turbines a year, amounting to around a gigawatt of capacity.

Based on current expectations for the installation of turbines in Brazil in the coming years, that amounts to somewhere between a third and a half of the supply needed for the market.

If it can sell even half the machines it intends to make, that would entail a massive ramping up of Goldwind’s market share, which Liang said is currently less than 5%.

“If you just look at the price per megawatt,” Liang believes Goldwind is likely cheaper than its competitors in Brazil. The new factory allowing it to build larger turbines will help in this respect, he said, as larger turbines bring down costs.

However, he said he does not believe there is a “big gap” in the price point between Goldwind, Vestas and Nordex.

What is in any case more important is reliability during execution and service, said Liang – something he is confident Goldwind can achieve with its GWH182 platform, which “exactly fits” the Brazilian wind regime.

And while the Brazil market is very much the focus for the new factory, Liang said Goldwind does also see opportunities to export to other countries in the Americas.

A little competition is a good thing

It also comes at a moment when Brazil’s onshore wind market – one of the largest globally, with a record 4.8GW of turbines installed last year – is expected to shrink by around half due to pressure from hydropower resources and a lack of grid capacity.

Goldwind is therefore stepping into the Brazil market when most of the Western and local competitors are pulling back. Its Chinese competitors, while interested in the Brazil market, are yet to make serious inroads, making this arguably a moment of maximum opportunity for Goldwind.

The question is now, given the headwinds facing Brazil's onshore sector, whether Goldwind can capitalise on its new factory through orders. Liang says Goldwind is currently in the process of negotiating contracts worth approaching 1GW.

The atmosphere in the Brazilian wind market has been “a little pessimistic” due to the challenges it is facing, he said.

He noted however the cyclical nature of Brazil’s hydropower generation and consequent squeeze on wind. Hydropower generation hit record highs in 2022 and 2023, meeting around 80% of local demand, but this year droughts have forced some plants to turn off entirely.

“When the water level is high, energy is oversupplied. When it’s dry, you have a shortage of supply,” said Liang. “That drives the spot market and also the long term expectation of energy prices.”

Brazil is in a dry season now, he said, with many bushfires reported in the Amazon. “That's bad environmentally,” he said. “However, that is a drive for increasing the installation of renewable energy.”

Brazil also lacks capacity to transmit power from turbines spinning in its windy north to southern demand centres. But Liang said grid capacity is expected to increase by 25% in the next five years, easing curtailment problems and encouraging new wind farms.

Despite the pressure these issues have put on turbine makers in Brazil, Liang said he expects local leaders Vestas and Nordex to stay, and this is a good thing, as competition between manufacturers is needed to support the supply chain.

Illustrating this point, he said that a few supply chain players that had last year been on the verge of exiting Brazil have been encouraged to stay by the new Goldwind plant. Having three or four active OEMs in the market helps maintain supply chain stability.

“It’s a healthy thing, which we embrace.”