Days after announcing an investigation into Chinese solar firms allegedly benefiting from state subsidies to win contracts in Europe, the European Commission is launching a probe into Chinese suppliers of wind turbines.

As in the case of two solar firms winning contracts in Romania, the investigation into Chinese wind turbine suppliers is being conducted under the new Foreign Subsidies Regulation.

The European Union inquiry will initially investigate ‘unfair trade practices’ in Bulgaria, France, Greece, Romania, and Spain and determine if cheap turbines from China are distorting the integrity of the European market.

Under the regulation, the Commission has the power to investigate the existence and the effects of foreign subsidies and impose redressive measures once a distortion of competition has been established. Based on the evidence gathered, the Commission may go into an in-depth investigation, which will have an 18-month deadline.

China has called the probe discriminatory.

Commission Executive Vice-President for Competition Margarethe Vestager said that the large excess capacities of subsidized Chinese wind turbines were dangerous for the EU and could jeopardize its economic security.

The EU must not repeat the mistakes it did in losing its solar manufacturing industry, she said.

According to WindEurope CEO Giles Dickson, “Chinese wind turbine manufacturers are offering much lower prices than European manufacturers and incredibly generous financing terms with up to 3 years deferred payment. You can’t do that without unfair public subsidy. What’s more, the European manufacturers aren’t allowed to offer deferred payment like that under OECD rules.”

Chinese wind turbines are being offered in Europe at up to 50% lower prices than Europe-made turbines. The deferred payments effectively mean that Chinese manufacturers offer their turbines for free until the wind farm operator has three years of revenue, according to WindEurope. The EU has set a goal of increasing its wind energy capacity from 220 GW to 425 GW by 2030 and 1,300 GW by 2050.

Last October, the EU outlined a six-point action plan to make Europe’s wind energy industry competitive by ensuring more financial support and prioritizing the acceleration of permitting. It also said that measures provided for by the Foreign Subsidies Regulation would be invoked if it is seen that the subsidies allow wind manufacturers receiving them to be successful in public procurement procedures in the EU.