This is a feature from Windpower Monthly's September 2021 Insight Report. Click here to read the full edition
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More than 70GW of offshore wind capacity is expected to be installed worldwide between 2021 and 2025, which would result in its share of all wind energy rocketing from 6.5% today to 21% by the end of that period.
Last year, investment committed to offshore wind overtook that in offshore oil and gas for the first time, according to the Global Wind Energy Council (GWEC).
Outside the traditional markets of Europe and China, several other countries are now showing strong promise.
Taiwan has awarded 5.5GW of offshore wind capacity through competitive auctions, to be installed by 2025.
In contrast to the Chinese offshore market, the Taiwanese market is very open, and this has attracted investors and developers, says Liming Qiao, head of GWEC Asia.
The government understood early on that the market needed to be driven by a target, so it set one in 2016, with a clear and ambitious ten-year goal, she explains. Taiwan also introduced a generous feed-in-tariff (FIT), realising that as a new industry for the country, there would be a number of risks and challenges for the first generation of projects.
The FIT was applied to the first 3.8GW of projects, after which the government replaced it with the auctions for installations from 2020-25. “Taiwan can be referred to as a successful case study for policy development,” Qiao says. “They really showed the rest of the world that fast deployment of offshore wind is possible.”
The challenge now for the country is to finalise its post-2025 strategy. The government’s aspirations to lower project costs may bring fresh challenges for the industry, Qiao says. “Until we see the final rules we can’t say how it will go.”
Vietnam is another promising market in Asia, with an estimated wind resource of 475GW along its 3,000km coastline. The government is currently drafting its power-development plan, which for the first time will include a target for offshore wind to 2030. Like Taiwan, Vietnam has introduced a FIT for offshore wind, Qiao says.
Many developers are eyeing offshore wind in Vietnam, including Ørsted, Mainstream Renewable Power and Enterprise Energy. “On the policy side, there are some positive movements, and on the industry side, there is a whole line of developers trying to kick off this sector,” she says.
But GWEC is urging Vietnam to clarify its policy and procurement mechanisms without delay, since the existing FIT for offshore wind is due to expire in November 2021. The council also believes the country could boost its offshore wind ambition from the current target of 2GW by 2030, to 10GW over the same period.
Other offshore wind markets tipped for rapid growth by GWEC include Japan, which installed 65MW of offshore wind in 2020. Its offshore wind vision, agreed by the government and the industry in late 2020, sets out a plan to allocate 1GW of offshore wind each year through to 2030, and then ramp up the pace of installation to reach up to 45GW by 2040.
The US market is also growing rapidly, after president Joe Biden, in his first week in office last November, set a target of 30GW by 2030. “The target has woken the market up — it was healthy before, but now it’s exciting,” says Alastair Dutton, chair of GWEC’s Global Offshore Wind Task Force. The potential is particularly significant on the east coast, where the water is shallower, he says.
The size of the country means there are different dynamics at play, Dutton explains. “The US is so big that individual states are driving policy. Massachusetts doesn’t want to buy onshore wind from Texas, it wants to make offshore wind using its own wind resource — it becomes a game of politics between states,” he says.
A total of nine states on the east coast now have offshore wind policies and have procured projects, Dutton adds.