Major Breakthrough in Semi-Direct Drive Permanent Magnet Wind Turbines: Can the Rare Earth Permanent Magnets Industry Usher in Significant Benefits? [SMM Commentary]

SMM, January 12: On January 3, the world's first 20MW-class evaporative cooling semi-direct-drive permanent magnet wind turbine generator, jointly developed by the Ganjiang Innovation Research Institute of the Chinese Academy of Sciences and CRRC Yongji Electric Co., Ltd., successfully rolled off the production line at the Shandong Green Energy Industrial Park of CRRC Yongji Electric. This marks a significant success in the innovative application of evaporative cooling technology in the field of large offshore wind turbines for the first time. With its efficient heat transfer characteristics, evaporative cooling technology provides strong support for the long-term reliable operation of large offshore wind turbines, especially in scenarios where major overhauls are challenging. This breakthrough not only achieved full-chain independent R&D from design to manufacturing but also overcame technical challenges in the complete system and key components of large offshore evaporative cooling wind turbines, representing a major step forward for China in independent innovation of large power offshore wind turbines.

This technological innovation has enhanced the core competitiveness of China's offshore wind power equipment and improved the ability to develop and utilize marine resources, playing a positive role in boosting the entire wind power supply chain. It is expected that the application prospects of evaporative cooling technology in large offshore wind turbines are broad, providing a stable and reliable operating environment for generators and aligning with the practical needs of the current wind power industry development.

With the rapid development of the wind power industry, the rare earth permanent magnets industry, as a key raw material for wind turbines, is also expected to be significantly boosted. However, from another perspective, with the advent of semi-direct-drive offshore wind turbines, the previously relatively stable direct-drive wind turbines face the risk of gradual replacement. Currently, the market penetration rate of direct-drive wind turbines is gradually declining. According to industry insiders, the market penetration rate of direct-drive wind turbines has already fallen below 10%. Considering cost factors, the wind power market is gradually moving towards rare-earth reduction, and semi-direct-drive wind turbines require approximately 25% less NdFeB compared to direct-drive wind turbines. This has led to a weakening trend in the demand for NdFeB in the wind power industry.

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Although the overall rapid growth of the wind power industry can boost the demand for NdFeB, the growth rate of demand for it may gradually slow down. Especially by the year-end of 2024, the incremental orders for NdFeB in the wind power sector are not significant, forming a stark contrast with the large-scale installation of wind power equipment in previous year-ends, as the traditional demand peak has not materialized as expected. This has also led to insufficient confidence in the rare earth permanent magnets industry regarding the market outlook. It is anticipated that the gradual application of semi-direct-drive offshore wind turbines may have a significant impact on the demand for the rare earth permanent magnets industry.