Due to climate imperatives, energy security challenges and geopolitical threats, the deployment of renewable energy capacity must be accelerated substantially over the coming years.
Across the Asia-Pacific region, offshore wind power can play a large role in meeting rising energy demand while reducing emissions as governments work toward net-zero targets.
Wind energy can also be used to make net-zero fuels like “green” hydrogen and “green” ammonia that can help decarbonize hard-to-abate industries like steel, cement and long-distance transport.
Offshore wind can play a key role given Asia’s vast coastlines and massive wind resources and the fact that offshore wind projects generally can be built with much larger capacity than onshore wind or solar developments.
While the Asia-Pacific region represents an incredible opportunity for offshore wind development, collaboration — which is key to driving down costs and solving supply chain, infrastructure and marine spatial planning issues — is not happening yet.
Collaboration has to be an ongoing process that continues as the market grows and delivers on the region’s energy transition. It is thus imperative that emerging and developed markets come together to discuss how regional collaboration can be kick-started. Otherwise, net-zero goals will be in doubt, as offshore wind installations fall short of targets.
Research from the Global Wind Energy Council (GWEC) shows that policy and market-led demand for wind energy will increase dramatically in the coming years. Yet due to unsatisfactory market conditions, permitting bottlenecks and stop-start political support, investment in the global supply chain has been insufficient to prepare the industry for the anticipated growth ahead.
This, however, presents an opportunity for Asia-Pacific policymakers and business leaders to lure new investment.
Investment flows have been most consistent in China. This has helped create a world-class wind manufacturing sector but also led to a highly unbalanced global supply chain. In turn, this has sparked legitimate concerns around dependency and a lack of resilience, particularly in the wake of COVID-19 and the post-pandemic logistics crisis.
GWEC research shows that shortages for key components may develop by mid-decade if the free flow of the global wind industry supply chain is hit by protectionist national or regional initiatives.
Some Asian jurisdictions are leaning toward imposing heavy local content requirements. These could strongly impact the commercial viability of future offshore wind projects.
Relaxed local content requirements, alongside regional dialogue and cooperation, will help create an Asian supply chain that will improve competitiveness and help lower capital investment costs. This can accelerate the build-out of offshore wind projects and take governments closer to their net-zero ambitions.
The GWEC remains concerned that governments do not realize the potential impact poorly coordinated actions could have on supply chains. This is why the availability of key data on supply chain developments will be critical and why a continuous dialogue with industry must be undertaken. Urgent improvement is needed in these areas and much more needs to be done.
In 2021, the GWEC and the International Renewable Energy Agency signed the U.N. Energy Compact, pledging to work together to deploy the 2,000 gigawatts of offshore wind needed by 2050 to reach net zero.
This will require a huge upsurge in installations, in the form of 35 GW of offshore wind each year for the coming decade. Only around 60 GW is in service today globally.
China is targeting 100 GW of offshore wind capacity in service by 2025, 200 GW by 2030 and 1,000 GW by 2050.
Nascent markets have also set goals. South Korea plans to have 14.3 GW of offshore wind power in service by 2030, Japan is aiming for 10 GW by 2030 and India is targeting an impressive 37 GW by 2030. Vietnam, the Philippines and Australia also have huge potential.
Last year, Asia replaced Europe as the world’s largest regional offshore wind market by cumulative installations.
China so far has led the way, overtaking the U.K. as the world’s top offshore wind market in 2021. By the end of 2022, cumulative offshore wind installations in China exceeded 30 GW, a milestone that took Europe, the birthplace of offshore wind power, more than three decades to achieve.
Other Asia-Pacific markets are also making significant progress. In January, a Marubeni-led consortium completed the launch of Japan’s first large-scale commercial offshore wind operations, near the ports of Noshiro and Akita on the northwest coast of Honshu, Japan’s largest island. In June, the government wrapped up its second auction of offshore rights, involving 1.8 GW of potential capacity.
Yet despite setting ambitious targets, Asian governments are struggling to start on-the-ground action at the speed needed to fuel the global energy transition.
In the GWEC’s view, many markets still lack adequate policy and regulation to facilitate offshore wind development. At the same time, there are many global best practices to learn from, especially in terms of public-private partnerships, that can help nascent emerging markets speed up the process of establishing clear regulations.
Europe built a robust offshore wind industry through regional collaboration on infrastructure, supply chains and research and development. This led to significant cost reductions and the rapid build out of installed capacity.
The Asia-Pacific region must learn from the European experience, given that demand for offshore support vessels, heavy-lift equipment, turbines, towers and other components is set to surge later this decade. The regional supply chain is not yet big enough to support this.
Ultimately, successfully tackling the regional supply chain challenge and ensuring regional cooperation, rather than protectionism, will be key to achieving offshore wind power ambitions in the Asia-Pacific region. The GWEC will hold its first summit of Asia-Pacific industry players, civil society groups and government representatives this month in Australia to help advance solutions.
The Asia-Pacific wind sector needs to be built on the back of cooperation rather than localization, which will stymie development. Hitting national and global net-zero targets will require a step change in the region’s approach to development in this area. The world does not have the time for each nation in the region to find its own way through small-scale policy experiments. Collaboration can advance proven solutions now.
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