Editorial

Asia Pacific excluding China to double annual added wind capacity to 11.6 GW by 2028

Growing power demand and declining costs are giving wind an edge over new coal plants

According to new research from Wood Mackenzie Power and Renewables, the long-term onshore wind outlook remains strong in Asia Pacific (excluding China), with new annual added capacity to more than double from 4.6 gigawatts (GW) in 2018 to 11.6GW by 2028. National power plans to increase the share of renewables, robust power demand growth and competitive onshore wind costs are providing support for future wind power development in the region.

India maintains its leading position with more than 15GW of new onshore wind capacity to be added from 2019 to 2028, as the government continues to push for large-scale gigawatt-level auctions.

Robert Liew, principal analyst with Wood Mackenzie, commented, “Despite the large growth potential, India currently faces market barriers owing to land lease issues, extreme price pressures and grid availability as the market is still coming to terms with the rapid transition to an auction mechanism.”

Australia will see a boom from 2019 to 2020 with over 4GW of projects under construction as the national renewable energy target ends in 2020. However, the Liberal-National coalition’s election victory in May this year will result in more policy uncertainty due to the coalition’s active support of coal power.

The region, which holds almost one-third of the global population, will see increasing power demand growth in coming years. India and Southeast Asia are driving regional growth due to flows of industrial investment as more labour-intensive industries shift away from China.

A key driver for greater adoption of wind power is also the declining cost compared with thermal power such as gas, coal and oil. According to the report, the onshore wind power levelised cost of energy (LCOE) across the region ranges from US$35/MWh to US$130/MWh, already within the range of US$40/MWh to US$170/MWh for new thermal power.

Increasingly, utility solar LCOE is becoming more competitive against wind power – especially in markets that have high solar irradiation such as India, Pakistan and Australia. “Onshore wind is forced to compete in open power markets without any financial support, unlike distributed solar PV. The challenge will be how much grid capacity utilities will allow for onshore wind given the rapid increase in distributed solar PV and limited grid availability, especially in smaller markets,” added Liew.

The insight is based on our new research Asia Pacific excluding China onshore wind power market outlook 2019-2028, which is part of Global wind markets service or can be purchased here. Download the report brochure by filling out the form on the right column.