Overview of Wind Power Industry Value Chain Using Diamond Model: A Case Study from China

Abstract

Sustainable energy development has gained worldwide attention, in part thanks to the wind power industry value chain that focuses on overall value creation and innovation, especially in China. This paper aims to construct a wind power industry value chain model and comprehensively analyze factors that have significant influences on it using a modified diamond model, which has remained nebulous. Focused on the value-adding effect of constructed value chains, we offer key ideas from different angles. A factor condition lays the foundation of the value chain, and shows that China is experiencing energy structure adjustment in which wind power will play a key role; its resource potential is huge, but with mismatched distribution. Demand conditions reveal an increasing demand for wind but serious wind rejection as well; this is where the value-adding probability exists. Related and support departments collaborate to determine the overall value creation process. Firm strategy, structure, and rivalry are terms that describe possible value-adding subjects considering the wind industry as a whole. Government and opportunity provide robust prices and non-price policies to support value integration, and Technology is an effective factor in cost reduction and value creation as a high value-adding sector. Furthermore, a comparison of wind power industry value chains in China and Japan is conducted. Our findings underscore that a gap exists between actual performance and the expected wind power industry value chain, and corresponding measurements to promote the performance are discussed, including encouraging diversified business models, enhancing R&D and independent innovation, professional cultivation, effectively reducing wind rejection rate, and the full range of government support.

Competitiveness of Industrial Companies Forming the Value Chain of Wind Energy Components: The Case of Lithuania

“…Some of identified competitiveness factors for this study describe the business environment, another part is the analysis of statistical data and the third part is the answers to purposefully formulated questions for companies in the questionnaire. Irfan et al [25], Liu et al [24] and Zhao et al [23] performed a competitive assessment using the method of descriptive analysis. Zhang [26] and Fang et al [18] used quantitative methods to assess competitiveness.…”

“…Zhao et al [23] used the Diamond model to assess the performance and competitiveness of the Chinese wind energy industry, and Liu et al [24] applied it to a review of the value chain of the Chinese wind energy industry. Irfan et al [25], with the help of this model, examined the main factors affecting the Indian wind energy industry.…”

“…Therefore, the factors related to government decisions were assigned to the group of "government" factors in this study. The wind energy rejection factor singled out by Liu et al [24] is associated with possible restrictions on the supply of wind energy due to the limited capacity of China's transmission networks. The off-grid energy factor examined by Zhao et al [23] is also specifically relevant to the Chinese market, as it relates to wind energy that is generated in rural areas and consumed locally, which cannot be supplied to the broader market as it would be economically inefficient to build power transmission lines to these areas.…”

“…Irfan et al [25] attributed the technological innovation factor to the element of firm strategy, structure and rivalry, but in the case of this study, it is more appropriate to attribute it to the element of technology. The factors "energy storage" and "construction of ultra-high voltage electricity transmission networks" that were attributed to the group of technological factors by Liu et al [24] are not relevant for manufacturers of WEC in this study, therefore, they were further omitted.…”

Special Issue on “Wind Energy Conversion Systems”

“…The quick and large-scale development and deployment of wind turbines and wind power plants around the world is significantly influencing not only the energy generation and utilization sectors but also related industries and society. The review paper, "Overview of Wind Power Industry Value Chain Using Diamond Model: A Case Study from China" [5], presents a value chain model and uses the model to analyze the factors that significantly influence the wind power industry. The Chinese wind power industry has been taken as an example for the illustration.…”