The World's #1 Renewable Energy Network for News, Information, and Companies.
Untitled Document

China's Wind Power Sector Struggles with Rare Earth Price Hikes

While an increasing number of wind power equipment manufacturers in China have started to adopt direct-drive permanent magnet technology, rare earth minerals, some of the core raw materials used to produce wind turbines, are becoming a significant barrier to their development.

The recent price surges have forced many industry players to halt production or create a complete industry chain by expanding into the upstream sector. The price hikes are expected to intensify the already fierce competition in the sector, causing those who lack capital and expertise to be squeezed out altogether, according to an industry insider.

Rare Earth Price Skyrockets

China's rare earth prices have risen significantly since July 2010, exceeding 200 percent since the beginning of this year, with some categories reaching 600 to 1,000 percent.

One of the key reasons for the price explosion is the Chinese government’s introduction of a levy on rare earth resources as of April 1 of this year, said Zhou Jianxiong, Chairman of Hunan province-based Xiangtan Electric Manufacturing. In addition, on May 19th the State Council of China released a document outlining the council’s viewpoint on the sustainability and development of the rare earth sector in a move to regulate the market.

According to a report from Guolian Securities, the price of rare earth is expected to continue the upward trend in the second half of this year.

A Bubble Emerges

Following five successive years of impressive growth, China's wind power sector saw its growth rate decline to 37 percent in 2010. With nearly 100 wind turbine manufacturers in China, total production capacity for 2011 is expected to reach 29 GW, far exceeding the actual demand of 15 to 18 GW. This trend is evidence that the rapid development of the wind power market has led to excessive competition and accelerated formation of a bubble. 

Manufacturers Address the Challenge

In response to the soaring raw material costs, Xiangtan Electric Manufacturing plans to adopt advanced processes to reduce its reliance on NdFeB (neodymium magnet), said Zhou Jianxiong. 

"We are currently evaluating the impact of the rare earth price increases on our company. The Chinese government has become aware of the huge pressure facing the high-tech sector, and is promising to take action to stabilize the market price. Meanwhile, our R&D team is committed to reducing process costs while improving the performance of our products," said Yao Yu, director of public relations at Xinjiang Goldwind Science & Technology

Furthermore, gaining direct access to upstream resources is also proving to be a solution to tackle rising costs.

Privately-held Mingyang Wind Power, for example, recently signed a framework agreement with the government of Ganzhou, Jiangxi province, one of China's major rare earth producers. According to the agreement, Ganzhou’s municipal government will first provide Mingyang with rare earth resources and grant exclusive rights to develop wind farms in the city. 

Untitled Document

Get All the Renewable Energy World News Delivered to Your Inbox - FREE!

Subscribe to Renewable Energy World Magazine and our award-winning e-Newsletter to stay up to date on current news and industry trends.

 Subscribe Now



A Case Study in Energy-Transition Momentum

Tim King South Australia is clearly at the forefront of the global energy transition as it establishes a fast-moving model oth...

US Senate Democrats Unveil Energy Bill That Restores PTC and Extends ITC

Brian Eckhouse, Bloomberg Senate Democrats unveiled a bill that would provide more tax credits for renewable energy while killing some tax ince...

Sage Grouse Removed as Threat to Biggest Wind Farm in U.S.

Christopher Martin, Bloomberg Billionaire Phil Anschutz’s plans to build a $5 billion wind farm in southeast Wyoming will no longer be stymied by t...

CEO Gilles: Challenge in Geothermal is to 'Level Playing Field' with Wind, Solar

Jennifer Delony The current challenge for the geothermal energy industry is what U.S. Geothermal CEO Dennis Gilles calls “leveling th...


IREC Announces Changes in Regulatory Team

The Interstate Renewable Energy Council (IREC), a not-for-profit organization which for...

Fronius Shifting the Limits in Solar-Plus: It’s not just about products, it’s about solutions.

Fronius USA, who just recently launched the all-new Fronius SnapINverter line this past...

Power Engineering and Renewable Energy World Magazines Name Projects of the Year Awards Finalists

Tulsa, Okla. and Nashua, N.H., Oct. 5, 2015 -- The editors of Power Engineering and Ren...

Solar Frontier's CIS Modules Selected For 14 MW Module Supply Agreement In The Midwestern US

Solar Frontier's advanced technology, CIS modules are selected for a 14 megawatt module...


ENER-G CHP technology selected for major London housing scheme

ENER-G has been selected to supply combined heat and power (CHP) technology for phase two of the Leopold Estate housi...


Necessity is the mother of innovation. Our planet is going through major changes in climate. This of course will affe...

New Study: Flexible Gensets Can Boost Solar- and Win-diesel Hybrid Solutions

The genset industry reacts to growing hybrid markets with a new approach that overcomes limitations of traditional ge...

New Hampshire Promotes Better Wood Heating

New Hampshire’s location in northern New England means that the winters are long and cold. Heating costs are hi...


Nanjing Shanglong Communications Liu Yuanyuan is Director of Operations and Co-Founder of Nanjing Shanglong Communications. Liu Yuanyuan previously held the position of office manager at the London Financial Times' China translation and editoria...


Volume 18, Issue 4


To register for our free
e-Newsletters, subscribe today:


Tweet the Editors! @jennrunyon



Doing Business in Europe – in partnership with GWEC, the Global Win...

There is now 128.8 GW of installed wind energy capacity in the EU (appro...

JuiceBox Energy Certified Installer Class

JuiceBox Energy is rapidly building out its national certified installer...

Wind Operator Congress Europe

The UK’s only business-focused O&M event for the European wind...


Clean Energy Patents Maintain High Levels in First Quarter, Solar L...

U.S. patents for Clean Energy technologies from the first quarter of 201...

Koch Professor drops his Koch title, still makes same errors plus s...

The Koch Professor’s title isn’t the only thing that’s...

Fact Check: AWEA represents American wind power

The American Wind Energy Association (AWEA) is proud of its members for ...


Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now