BEIJING, April 10 (Reuters) - The European Union will

investigate subsidies received by Chinese suppliers of wind

turbines destined for Europe, the bloc's anti-trust

commissioner, Margrethe Vestager, has said.

Tuesday's move is the latest in a growing effort in both

Europe and the United States to shield domestic clean energy

industries from cheap Chinese imports, which authorities say

benefit from anti-competitive state subsidies.

Washington would not accept U.S. industry being "decimated"

by China's excess industrial capacity in key products such as

EVs, batteries and solar panels, U.S. Treasury Secretary Janet

Yellen warned during a visit to China this week.

Here is what we know about China's wind power industry.

HOW BIG IS IT?

China has by far the world's biggest wind turbine production

capacity, or 60% of 163 gigawatts (GW) in 2023, says

Brussels-based industry association Global Wind Energy Council.

Production capacity in Europe and the United States, by

contrast, stood at 19% and 9% respectively.

China exported about $1.42 billion of turbines and

components to the EU last year.

Its top three manufacturers, Goldwind, Envision

and Mingyang had combined orders of 55.3 GW in 2022,

versus only 26.7 GW for the top three Western makers, Vestas

, GE and Siemens Energy, data from

consultancy Enerdata shows.

In addition to output, Chinese turbine manufacturers also

lead in product design and innovation. The last four years have

seen 426 new Chinese turbine models released, versus just 29 new

turbines outside China, consultancy Wood Mackenzie said.

Last year, China installed the world's largest offshore wind

turbine off the coast of the southern province of Fujian. The

18MW turbine is 20% more powerful than the largest turbine built

by GE.

WHAT'S BEHIND ITS GROWTH?

China has long supported the development of wind farms and

turbine production as part of its ambitious climate goals to

reach peak emissions before 2030.

Spurred by state support, China installed 77.1 GW of wind

power last year, accounting for 65% of the global total. By

comparison, European Union countries built only 17 GW.

China introduced feed-in tariffs to support onshore wind

power deployment in 2009 widening them to offshore projects in

2014.

Although central subsidies were phased out between 2020 and

2021, projects continue to get support from local governments.

In 2021, the southern economic powerhouse of Guangdong said

it would offer subsidies of between 500 yuan ($69) and 1,500

yuan ($207) per kilowatt of offshore wind capacity until 2025.

The wind sector also continues to receive indirect support

from state banks and cheap upstream components.

Manufacturing loans at China's four big state-owned banks

jumped 25% last year to $1.2 trillion, targeting strategic

sectors such as technology and clean energy.

In an annual report to China's legislature in March, Premier

Li Qiang vowed to unleash "new productive forces" to drive

growth in high-tech manufacturing as the economy stalls amid a

property crunch and trade tension.

Li added that Beijing would issue one trillion yuan's worth

of special purpose bonds - equivalent to $139 billion - in 2024

to help fund strategic sectors.

WHAT OTHER FACTORS KEEP CHINESE TURBINE PRICES LOW?

The situation in China's wind turbine sector is similar to

that in the solar sector, with massive domestic capacity

increases underpinned by extensive government support, said

Xuyang Dong, China energy policy analyst at Climate Energy

Finance in Sydney.

"With a domestic supply glut and world leading technology,

China will increasingly seek to export turbines."

Cheap raw materials and fierce competition have also pushed

down prices. Prices of Chinese turbines dropped by more than 30%

in 2023, Wood Mackenzie said.

Prices for Chinese turbines are about a fifth below rival

U.S. and European products, says research service BloombergNEF.

The average bidding prices in China's public wind project

tenders fell 11.4% from 1,755 yuan ($242.65) per kilowatt at the

start of 2023 to 1,555 yuan at the end of the year, leading

supplier Goldwind said in its 2023 annual report.

($1=7.2322 Chinese yuan renminbi)