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Asia's offshore wind market to become largest globally

Released at: 14:11, 27/06/2019

Asia's offshore wind market to become largest globally

Photo: GWEC

Global Wind Energy Council report looks at the future of offshore wind markets.

by Minh Do

Vietnam and other Asian countries are expected to be key growth markets in offshore wind power and turn Asia into the largest offshore region globally, according to the Global Offshore Wind Report released by the Global Wind Energy Council (GWEC) on June 26 in London.

This the first edition of the GWEC report, providing a comprehensive analysis of the prospects for the global offshore wind market, including forecast data, market-level analysis, and a review of efforts to lower costs.

Key growth markets include Vietnam, Taiwan (China), Japan, India, and South Korea. Total installed capacity for the region under the “business-as-usual” (BAU) scenario is 100 GW by 2030.

In the short term, Europe’s offshore market will remain flat with few projects reaching installation and Concerted Action Offshore during 2020, but the cost competitiveness of European offshore will remain a key driver of volume.

The Sector Deal in the UK provides a stable outlook, while volumes for Germany have still not increased despite government awareness. Total installed capacity for the region under the BAU scenario is expected to be 78 GW by 2030.

The first installation of large-scale projects in the US, expected between 2021 and 2023, will bring total installations to 2 GW by 2025, with potential for 10 GW of total installations towards 2030 with the increasing experience and maturing of the local supply chain.

The global offshore market has grown by an average of 21 per cent each year since 2013, reaching total installations of 23 GW. More than 4 GW of new capacity was installed each year in 2017 and 2018, making up 8 per cent of the total new installations during both years. For the first time, China was the largest offshore market in 2018 based on new installations, followed by the UK and Germany.

“We are within reach of a truly global offshore wind industry,” said Ms. Karin Ohlenforst, Director of Market Intelligence at GWEC. “Based on government targets, auction results, and pipeline data, we expect to see 190 GW of new capacity installed by 2030, but this does not represent the full potential of offshore wind. Many new countries are preparing to join the offshore wind revolution, while floating offshore wind represents a game-changing technological development that can add even more volume in the years to come.”

“The industry is continuing to make significant strides forward in cost-competitiveness, with an average levelized cost of energy (LCOE) of $50 per MWh being within reach,” said Mr. Alastair Dutton, Chair of the Global Offshore Wind Task Force at GWEC. “This achievement increases the attractiveness of offshore wind in mature markets, where a number of governments are discussing long-term climate targets that, if they are to be achieved, must seriously consider the contribution large-scale offshore wind can make. New offshore markets represent significant potential and if industry and governments can work together, as we have seen recently in the case of Taiwan (China), we can build the necessary policy frameworks at greater speed to ensure growth can be achieved sooner rather than later.”

GWEC Market Intelligence provides a market outlook in the report representing the BAU scenario, which does not incorporate further technical development or further opportunities for offshore wind, and an upside scenario that captures this additional potential.

The BAU scenario anticipates double-digit growth for the global offshore market based on current policies and expected auctions and tenders. This scenario makes annual installations of 15 to 20 GW after 2025 realistic based on growth in China and other Asian markets, amounting to 165 GW of newly-installed capacity globally between now and 2030. This would bring total installed capacity to nearly 190 GW.

The upside scenario captures additional potential such as the advancement of floating technology, increased cost competitiveness and therefore greater volume in mature markets, as well as the opening up of new offshore markets. Based on this scenario, a more positive outlook of over 200 GW newly-installed capacity between now and 2030 is possible, totaling approximately 210 GW installed capacity.

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