Rapid Development of the Wind Power Industry: Can It Provide Strong Support for the Rare Earth Permanent Magnets Industry? [SMM Analysis]

SMM, December 27: On December 20, the National Energy Administration released the national power industry statistics for January-November. By the end of November, the total installed power generation capacity nationwide reached approximately 3.23 billion kW, up 14.4% YoY. Among this, the installed capacity of solar power generation was about 820 million kW, up 46.7% YoY; wind power installed capacity was around 490 million kW, up 19.2% YoY. During this period, the cumulative average utilization of power generation equipment nationwide was 3,147 hours, down 151 hours YoY. Additionally, the completed investment in power supply projects by major power generation enterprises nationwide amounted to 866.5 billion yuan, up 12.0% YoY, while the completed investment in power grid projects reached 529 billion yuan, up 18.7% YoY. These figures indicate that the wind power industry remains in a rapid development phase.

As one of the important end-use markets for rare earth permanent magnets, the development of the wind power industry directly impacts the demand for the rare earth permanent magnet industry. Currently, due to cost considerations, the wind power industry is gradually adopting a de-rare-earth strategy, transitioning from traditional direct-drive motors to semi-direct-drive motors. The market penetration rate of direct-drive motors has now dropped to about 10%, with a rare earth permanent magnet consumption of 670 mt/GW, while the consumption for semi-direct-drive motors has decreased to 170 mt/GW. This shift has led to a slowdown in the growth of demand for rare earth permanent magnets in the wind power industry.

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As of now, the incremental orders for rare earth permanent magnets in the wind power sector are not significant. With the increasing penetration rate of semi-direct-drive motors, it is expected that the demand for rare earth permanent magnets in the wind power market will gradually decline.