After the "anti-involution" wave, the wind power industry has entered a profit recovery cycle
Morgan Stanley believes that after nearly three years of a downward cycle, the value chain of China's wind power has successfully achieved a reversal of involution through industry self-discipline, realizing a turnaround in price and overall profitability by early 2025. It is expected that during the "14th Five-Year Plan" period, the average annual newly installed capacity will exceed 110GW, and it could reach approximately 120GW during the period of 2028-2030
Morgan Stanley upgrades the rating of China's wind power industry, believing that after efforts to counteract involution, the sector may welcome a recovery.
According to the Chasing Wind Trading Desk, Morgan Stanley pointed out in its latest research report that after nearly three years of a downward cycle, the value chain of China's wind power has successfully achieved counter-involution through industry self-discipline, realizing a turnaround in prices and overall profitability by early 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 situation of vicious competition through internal self-regulation mechanisms. Morgan Stanley expects that during the "14th Five-Year Plan" period, the average annual new installed capacity will exceed 110 GW, reaching about 120 GW during 2028-2030.
The report also predicts that due to more favorable power curve and electricity price prospects, wind power will have stronger investment attractiveness compared to photovoltaic power generation, and offshore wind power installations will accelerate growth again.
Industry Self-Discipline Drives Price Recovery
Morgan Stanley analyst Eva Hou pointed out that the key factors for the successful counter-involution of China's wind power industry include strong demand growth, the establishment of industry self-discipline mechanisms, and supply chain integration. Data shows that in the first eight months of 2025, the bidding price for onshore wind turbines increased by 8% compared to 2024, while offshore wind turbine prices rose by 12%.
This achievement is mainly attributed to:
Strong demand growth: Annual new installations increased 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. The annual bidding volume also surged from 54 GW in 2021 to 164 GW in 2024.
Industry self-discipline constraints: 12 major wind turbine manufacturers signed the "Self-Discipline Convention for Fair Competition in China's Wind Power Industry" in October 2024, with operators 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 from complete turbine manufacturers, new investments in key components continue to decrease, while older capacities are gradually eliminated as turbine power ratings continue to increase.
Optimistic Demand Outlook During the "14th Five-Year Plan"
Morgan Stanley expects that during the "14th Five-Year Plan" period, wind power installations will accelerate, with an average annual new installed capacity exceeding 110 GW, reaching about 120 GW during 2028-2030. The main driving factors include: compared to solar power generation, wind power shows stronger investment attractiveness due to more favorable power curves and electricity price prospects; offshore wind power installations are accelerating again; and the demand for replacing onshore turbines is growing.
The issuance of Document No. 136 provides a relatively favorable policy environment for the wind power industry. Compared to photovoltaic power generation, wind power has stronger investment attractiveness among developers due to better power curves and electricity price prospects. China Huadian New Energy and CGN New Energy have committed to setting the ratio of wind power to photovoltaic installations at 1:1 and 2:1, respectively, during the 14th Five-Year Plan period.
In terms of offshore wind power, it is expected that the "Management Measures for Offshore Wind Power Development in Deep and Distant Seas" will be issued in the fourth quarter of 2025 or the first quarter of 2026, providing further support for industry development. The bidding and construction of offshore wind power projects in key regions such as Guangdong, Shandong, and Jiangsu are expected to accelerate
