Asia-pacific offshore wind energy capacity to rise 20-fold in next decade: Wood Mackenzie
It said that China, leading in the race, is expected to see offshore wind capacity grow from 2 GW last year to 31 GW in the next decade
New Delhi: Asia-Pacific region’s offshore wind power capacity would rise 20-fold to 43 Gigawatt (GW) through 2027, according to a recent report by global natural resources consultancy Wood Mackenzie.
It said that China, leading in the race, is expected to see offshore wind capacity grow from 2 GW last year to 31 GW in the next decade.
Taiwan, which comes next, would account for 20 per cent or 8.7 GW of offshore wind capacity by 2027. This would make it the largest offshore wind market in Asia-Pacific excluding China (APeC) by 2020.
“Taiwan presents the biggest offshore market in APeC due to a relatively stable regulatory regime, a supportive government, and openness to foreign investment,” said Robert Liew, senior analyst, Wood Mackenzie.
At present, Taiwan relies heavily on coal, gas and nuclear for power.
“However, the government has pledged to shut down nuclear plants by 2025, thereby leaving a void of 5 GW of power capacity to be filled. Offshore wind is poised to fill this gap as more than 5.7 GW of projects have been approved and planned for commissioning by 2025,” the research firm said in a report.
A few markets in Asia-Pacific, driven by declining prices, have set ambitious offshore wind targets. However, not every market is set for success as a stable domestic offshore supply chain and strong government support are needed to sustain growth in the long term.
“Together with South Korea and Japan, East Asia needs about $37 billion in investments to meet the mammoth growth in offshore wind capacity over the next five years,” Liew said.
He added that prices are coming down and thus future offshore wind prices were projected to be competitive with traditional thermal prices by 2025.
“This should attract investments in offshore wind, though Asia-Pacific is still playing catch-up with Europe as it is still in the process of establishing a dedicated infrastructure to support large scale offshore growth,” he said.
Despite the enormous potential of offshore wind in Asia-Pacific, key challenges around technology maturity and limited regional offshore wind supply chain remain.
Advanced offshore technology used in regional leader China still lags behind that of European offshore.
“Local turbine suppliers in Korea and Japan are investing in new and larger offshore machines comparable to western turbines. This will take time as it will require more research and development, testing new demonstration units, and establishing developer buy-in,” Wood Mackenzie said.
In addition, to support the ambitious growth in offshore wind capacity, a robust supply chain needs to be developed. This would require strong commitments by regional governments to support and invest in the growth of offshore wind.