Offshore wind pipeline in APAC excluding China exceeds 5 GW
Principal Analyst, Power and Renewables Research
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With a supportive policy framework in place and over 5 gigawatts (GW) of approved projects that will come online as early as 2025, Taiwan is expected to connect upwards of 10 GW of offshore wind capacity by 2030.
Developers are leveraging Taiwan’s geographical advantages – wind conditions along the Taiwan Strait are some of the best in the region and selected wind sites are close to major power demand areas with available transmission infrastructure.
Denuclearisation and coal retirement are key drivers to achieving Taiwan’s 2030 renewable energy target. Wood Mackenzie expects offshore wind and solar PV will be ramped up to compensate for the lost capacity with wind power generation to increase ten-fold by 2028.
Japan will see exponential growth with 4.5 GW of new capacity from 2019 to 2028. The government has designated 11 sites in preparation for tenders that will begin in 2020, paving the way for the beginning of utility-scale offshore projects.
However, the average offshore wind levelised cost of electricity (LCOE) in Japan remains the highest in the region. Compared with other markets, Japan still faces high labour and construction costs, a lengthy environmental impact assessment process and strict local requirements. Despite these barriers, the government is actively exploring ways to reduce offshore wind costs and encourage more domestic companies to participate in this emerging sector.
The South Korean government has designated offshore wind as a key focus of its renewable energy plan by 2030. Despite low wind speed conditions, developers are pushing ahead with floating foundation offshore projects and the market already has more than 3.5 GW of floating offshore projects in the pipeline, the most of any markets in the region.
Another market in the spotlight is Vietnam. Developers are rushing construction of at least 0.5 GW of pipeline projects to take advantage of an offshore feed-in tariff that will expire in 2021.
The success of future offshore wind in APAC excluding China (APeC) will depend on costs coming down. Currently, the average offshore wind LCOE in APeC is still 70% higher than other renewables but the trend of auctions, technology changes and development of regional offshore supply will inevitably lead to lower costs. As such, Wood Mackenzie expects upwards of 19 GW of new offshore capacity to be added over the next 10 years, making it a key region for global offshore wind development.
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