The global wind tower needs huge space. 

According to the forecast of the Global Wind Energy Council ((GWEC)), without taking into account the conservative prospect of China's follow-up local subsidy policies, and relying on the strong demand in Europe, the global offshore wind power will maintain rapid growth from 2020 to 2024; at the same time, the addition of global onshore wind power will also be stable between 55 and 70GW. 

It is expected that by 2024, under the premise of conservative estimates of China's offshore wind power demand, the total global demand for wind towers (including offshore pipe piles and pipe racks) is expected to be close to 10.67 million tons, which is 13% higher than the average annual compound growth rate of 6.61 million tons in 2018. 

The penetration rate of the top four domestic wind tower companies in the global market will gradually increase from about 13% in 2018 to 32%. 

In terms of steel consumption, the steel consumption per ton of offshore wind power is much higher than that of onshore wind power, and the water depth and offshore distance of offshore wind power in Europe are getting farther and farther. Under the sharing of the trend of large-scale units, the steel consumption of wind towers per GW is expected to be 45-500000 tons. With the application of high towers, the average steel consumption of onshore wind power gradually decreases from 100, 000 tons to 80, 000 tons. 

It is expected that by 2024, under the premise of conservative estimation of domestic offshore wind power demand, the global demand for wind towers (including offshore pipe piles and pipe racks) is expected to be close to 11 million tons, which is 13% higher than the average annual compound growth rate of 2018. 

(estimated source: Guoxin Securities). 

The demand for wind power installation increases during the rush installation period in China. 

In 2018, the installed capacity of domestic wind power increased by 21.14 million kilowatts, an increase of 7.5 percent over the same period last year. A total of 124000 units were installed nationwide, and the total installed capacity of domestic wind power was 210 million kilowatts, an increase of 11.2 percent over the same period last year, maintaining a steady growth trend. 

Among them, the development of offshore wind power accelerated, with 436 new units installed in 2018, with a new installed capacity of 1.65 million kilowatts, an increase of 42.7 percent over the same period last year, and a cumulative installed capacity of 4.44 million kilowatts, an increase of 59.1 percent over the same period last year. 

(source: national Energy Administration). 

In May 2019, the notice of the National Development and Reform Commission on improving the wind power grid price policy further improved the wind power grid price policy: for onshore wind power, if it is approved before the end of 2018 and has not been connected to the grid before the end of 2020, the state will no longer subsidize; if it is approved before January 1, 2019 to the end of 2020 and has not completed the grid connection before the end of 2021, the state will no longer subsidize. 

Starting from January 1, 2021, the newly approved full realization of affordable access to the Internet will no longer be subsidized by the state. 

For offshore wind power, for projects approved before the end of 2018, if all units are connected to the grid by the end of 2021, the feed-in price at the time of approval shall be implemented; if all units are completed in 2022 or later, the guidance price for the year of grid connection shall be implemented. 

Therefore, under the policy guidance, both onshore wind power and offshore wind power have entered an intensive rush period this year and next year, and the prosperity of the industry continues to improve. 

The head enterprise has entered a period of rapid production expansion, and the degree of industry concentration has increased significantly. 

At present, there are four listed companies in the domestic wind tower industry, three of which have been listed for nearly 10 years, although they have obtained financing channels in the capital market a long time ago. however, due to the homogenization of products, downstream dispersion, uneven industry standards, land transport radius and other reasons, the industry concentration has not been effectively strengthened. 

In 2017, the market share of the four enterprises in the domestic market was only 27%, which was a competitive market during this period. 

In 2019, due to structural changes such as the rapid increase in offshore permeability and the rise of parity large base projects in the north, wind tower enterprises have been promoted to expand production from the bottom up, resulting in an increase in industry concentration. The four head enterprises (CR4) are expected to reach 46% in 2021, reaching the oligopoly standard. 

Since 2019, Tianshun Wind Energy has taken the lead in expanding its original production capacity, and then Tianneng heavy Industry and Daijin heavy Industry have begun to follow the needs of the large base project to set up new plants in many areas of Inner Mongolia; since 2020, Taisheng, Daijin, Tianneng and Tianshun have expanded the supporting capacity of offshore wind towers along the coast. 

Four enterprises have entered the "arms race" in maritime, overseas and three northern markets. 

In the face of the strong demand for domestic wind power rush installation in the first half of 2020, there was a risk of tariff levy in Europe, the traditional export market, because of the anti-dumping review process. Three wind tower enterprises with export qualifications took the initiative to reduce export orders, and the domestic share briefly increased to 54%. 

As a standard industrial enterprise, when the domestic wind tower enterprises enter the oligopoly pattern with CR4 higher than 40%, they have a higher market position, and the profitability of unit products can be stabilized by setting entry barriers. 

The main raw materials needed for the tower are steel plate, flange, paint, welding materials and other spare parts, of which steel plate accounts for the highest proportion of finished products, followed by labor and energy consumption. 

Due to the fluctuating price trend of medium and thick plates and flanges, the cost structure of the wind tower is also in a dynamic change. 

With the increase of output, the depreciation of equipment and plant, labor and paint accessories have a certain scale effect. 

The unit-ton management cost of wind tower enterprises also gradually decreases with the expansion of output. Taisheng wind energy and Daijin heavy industry, which are only focused on wind tower manufacturing in the top four enterprises, the cost-sharing effect is more obvious. 

On the other hand, Tianshun Wind Energy and Tianneng heavy Industry, which are engaged in industry-related diversification, because they are involved in new energy operation, blade manufacturing (Tianshun) and other businesses, the management and R & D expenses are more, and the sharing effect is relatively weak. 

From the historical data, the capacity utilization rate of the city where the net profit per ton of steel changes greatly from unsaturated to saturated Tianneng heavy Industry, Taisheng Wind Energy and Daijin heavy Industry. 

Daijin heavy Industry has increased its production scale from 50, 000 tons in Penglai to 300000 tons in 2020 and 500000 tons in 2021, making it the largest single-scale wind tower in Asia.