New research from global natural resources consultancy Wood Mackenzie indicates Asia-Pacific's offshore wind capacity will rise 20-fold to 43 GW in 2027.
Leading the charge is China, which is expected to see offshore wind capacity grow from 2 GW last year to 31 GW in the next decade.
Next is Taiwan which will account for 20% or 8.7 GW of offshore wind capacity by 2027, making 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 Wood Mackenzie senior analyst Robert Liew.
Currently, 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.
Driven by declining prices, a few markets in Asia-Pacific 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 around US$37 billion in investments to meet the mammoth growth in offshore wind capacity over the next five years," Mr Liew said.
"The good news is that prices are coming down. Future offshore wind prices are projected to be competitive with traditional thermal prices by 2025," he added. "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."
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. For example, leading Chinese offshore turbine supplier Shanghai Electric continues to be reliant on technology licenses from European turbine original equipment manufacturer (OEM), Siemens-Gamesa Renewable Energy, and regional turbine suppliers still do not offer offshore wind turbines in the >8MW class which are now preferred by leading offshore wind developers.
Outside of China, 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.
In addition, to support the ambitious growth in offshore wind capacity, a robust supply chain needs to be developed. Maritime infrastructure, establishing a local vessel fleet to install and service offshore wind farms, and upgrades to transmission systems will take time to be built up. This will require strong commitments by regional governments to support and invest in the growth of offshore wind.
Mr Liew said: "Fortunately, the experience in Europe is that when such support systems are in place, growth will be exponential given the increasing competitiveness of offshore wind prices, and developers eager to take advantage of economies of scale, local suppliers and opportunities in new markets."