Although the offshore wind industry began in Europe, Asia is quickly catching up. According to the recent report of the Global Wind Energy Council, the Asia Pacific region has now taken the lead in global wind power generation growth, accounting for 50.7% of all new installations in 2019. Despite its low installed capacity, floating offshore wind could be the next frontier in wind power production in the Asia Pacific region, with almost unlimited potential. Counting projects in the early stages of growth, the overall investment in the sector may be worth US$58 billion.
Global Market Share
In the first half of this decade, China is projected to maintain its dominance of the Asian offshore wind industry, with a market share of more than 70%. However, starting in 2025, as more utility-scale offshore wind projects are linked in emerging markets such as Taiwan, Japan, South Korea, and Vietnam, its market share in the region is expected to decline. Despite the fact that the market is still in its early stages, it is expected to grow as a number of developers in Japan, South Korea, and Taiwan have announced plans to build key demonstration projects.
Speaking with regards to the next decade, the top five markets would be owned by China with a share of 52GW, followed by Taiwan (10.5GW), South Korea (7.9GW), Japan (7.4GW), and Vietnam (5.2GW). Between 2010 and 2018, the global offshore wind industry expanded at a rate of nearly 30% per year, owing to rapid technological advancements, and approximately 150 new offshore wind projects are currently under construction around the world.
Emerging Markets In Asia Pacific
According to the International Energy Agency’s Offshore Wind Outlook, the current offshore wind market is just scratching the surface of its capacity. Offshore wind has the capacity to produce more than 42,000 TWh per year worldwide, which is more than 18 times today’s global electricity demand, based on available resources around the world. As a result, offshore wind will play an increasingly important role in the energy transition and Asia has a significant role to play in the process. Accelerating the growth of global wind power installations requires scaling up offshore wind energy investment and establishing the right business design.
Growing economies of scale and technological innovations such as increased array cable voltage, foundation design, construction techniques, and hybrid solutions will continue to drive down costs and make offshore wind more competitive in new markets, which will be critical to offshore wind’s potential success in the Asia Pacific area.
Floating offshore wind energy is becoming increasingly popular among Asian governments as a way to diversify their renewable energy portfolios and ensure energy protection while pursuing net-zero goals. As they accelerate the retirement of legacy thermal power plants, Asia Pacific countries are expected to depend heavily on floating wind power. New laws being enacted in the area would limit the construction of new coal and nuclear power plants, indicating that substantial investments in the renewables sector are planned.
Governments in the Asia Specific markets are increasingly turning to renewables to fill the supply gap, but scalable options are restricted due to land constraints. While floating offshore wind is gaining popularity, its high cost remains a significant barrier to widespread adoption.
India Specific Overview
After China, the United States, and Germany, India ranks fourth in the world for wind energy output. With a 7600km coastline surrounded on three sides by the sea, India has a fair chance of harnessing offshore wind energy. As a result, the government issued the “National Offshore Wind Energy Policy” on October 6, 2015.
According to the policy, the Ministry of New and Renewable Energy will serve as the nodal ministry for the production of offshore wind energy in India, collaborating closely with other government agencies on the event and the use of maritime space within the country’s Exclusive Economic Zone (EEZ), and will be liable for the overall monitoring of offshore wind energy development. The pattern of exponential growth in the country’s annual capacity additions demonstrates the progress of the government’s initiative to encourage wind energy projects.
Although offshore wind currently accounts for just 0.3% of global power generation, capacity is projected to more than double by 2040, growing to a $1 trillion industry in the next two decades, matching capital expenditure on gas and coal-fired capacity. Countries in the Asia Pacific area will be leaders in this vital industry and reap all of the advantages that offshore wind has to bring if the policies and government support are in place.