Apple plots wind rollout at Chinese factories


December 9, 2016

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Apple has faced questions this week over sales of its Apple Watch– but those in wind are watching Apple for a different reason.

This week, the US tech giant signed a deal with Chinese turbine maker Goldwind to partner on wind projects in China, and to seek other opportunities to collaborate both inside and outside the Asian superpower. This includes directly supplying wind power to the secretive factories that are run by Apple’s manufacturing partners.

According to this deal, Goldwind is set to transfer to Apple 30% stakes in four of its subsidiaries: Nanyang Runtang New Energy in Henan Province; Zibo Runchuan New Energy in Shandong Province; Shuozhou Pinglu Sineng Wind Power in Shanxi Province; and Qiaojia Tianqiao Wind Power in Yunnan Province. After the transfers, Apple and Goldwind are set to run these subsidiaries as cooperative joint ventures.

So what will each party get out of such an arrangement?

For Apple, it seems relatively straightforward. Apple has committed to power 100% of its operations from renewables as soon as possible, and it is very close to hitting its target. Currently, 93% of its facilities worldwide run on renewable energy.

Moreover, the choice of partnering with a Chinese manufacturer, rather than a more established European or US player, is no accident. The US tech giant produces all of its iPhone, Macs and iPads in the country and China has naturally become Apple’s second-largest consumer market.

This could play an important role in helping to improve the image of these controversial facilities, where Apple has faced criticism for their long working hours and poor conditions for workers. The US firm is under pressure to improve standards and is responding.

Apple is not new to Chinese renewables either, but it has so far focused more on solar than wind. According to its 2016 Progress Report, the company is currently adding 170MW of solar to begin offsetting the energy used to make its products, but it made little mention about future wind projects in the country.

This partnership could be a good way to boost Apple’s investments in wind projects in China, as well as helping spread its renewable energy ambitions to the companies in its supply chain.

We also think it is interesting to look at what this deal tells us about Goldwind’s strategy. The manufacturer is one of only two Chinese turbine makers, along with Envision, that has been making serious strides outside of its home market.

Goldwind became the world’s biggest wind turbine maker in 2015 when ranked by annual installations, with around 7.8GW installed. The company accounted for nearly 27% of China’s market share.

However, China’s economic slowdown has forced Goldwind to look outside its domestic market if it wants to continue its growth. Its overseas strategy is now more important than ever.

Goldwind appears to be aware of that and, in the last few years, it has tried to work its way around the world, establishing operations in key countries. Starting with Goldwind Americas in 2010, it now has subsidiaries in Australia, South Africa and Germany. The manufacturer currently sells its products in 17 countries.

As a result, Goldwind has established its presence in key markets such as Europe and US. It has been the first Chinese manufacturer to put its machines in Eastern Europe at the end of 2015, signing contracts with Romania and Serbia. And, just last month, Goldwind Americas announced an exclusive agreement with US firm Viridis Eolia for the conditional supply of up to 1.9GW of wind turbines in Wyoming, which is Goldwind’s biggest US order to date.

This deal could actually make a lot sense for both companies then. Having a strong ally like Apple on its side seems to be a smart move for the Chinese manufacturer to continue to expand its presence internationally.

And, thanks to this partnership, Apple could follow Google shortly and be the next giant to announce that it has reached its target of getting 100% of its power from renewables.

Though this won’t help it sell more Apple Watches.

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