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Asia overtakes Europe for offshore wind FIDs in 2019
ASIA
TOTAL investment in the Asia-Pacific (APAC) offshore wind sector surpassed Europe for the first time in 2019.
Research from the Renewables Consult- ing Group (RCG) found financial closure was declared for $10bn of investment in APAC, driven by Taiwan, Japan and Vietnam, while investment in Europe, previously the leading global region, stood at just over $5.5bn.
APAC saw almost 2 GW reach financial close in2019,whileEuropesaw1.4GW.Akeydevel- opment was “maturity of the [European] market and intense competition,” which meant that costs continued to fall.
“Taipei’s offshore wind development plan, supported by a feed-in tariff [FiT], is starting to bear fruit with five projects reaching financial close in 2019. Investment activity was not con- fined to Taiwan, with projects in Vietnam and Japan also reaching financial close over the last year. South Korea remains in the mix and [a] key market to watch,” said RCG director Lee Clarke.
The report noted that the Asian market had experienced significant growth in 2019, cov- ering various stages of offshore wind project development.
Taiwan retained its position at second place in RCG’s Offshore Wind Development (OSWD) Index, with continued progress towards its 2030 offshore wind target.
The lowering of FiT prices at the beginning of 2019 struck a balance between encouraging cost reductions whilst still providing a good level of support for new developments, said the report.
In Taiwan, for example, Ørsted commis- sioned the 120-MW second phase of the For- mosa 1 offshore wind farm in September. The company aims to open 2.4 GW of offshore
capacity in the country, which will include the 900-MW Greater Changhua 1 and 2a projects, which reached FID in April 2019.
Taiwan aims to have 5.7 GW offshore wind by 2025.
Globally, the RCG noted that development was driven by falling costs caused by techno- logical advances and increasing efficiency in the global supply chain.
The introduction of larger turbines has reducedthelevelisedcostofenergyforprospec- tive projects.
The floating wind market also continues to see innovation through the installation of new foundation design prototypes.
The next five years
Looking ahead, the report said that 8-13.5 GW of capacity would reach FID over the next five years and that an annual rate of over 6 GW would emerge from 2022.
However, commissioning activity is set to fall slightly in 2020, but then rebound to 3.5 GW in 2021
Europe, and especially the Americas, are set to drive this growth, with lease auctions, power purchase agreement (PPA) solicitations and leg- islative changes in 2019 laying the foundation for a new rush of FIDs.
For example, the UK’s recent Contract for Difference (CfD) bid round allocated 5.5 GW at record low tariffs. This made the UK the current world leader for offshore wind allocations.
In the US, various large-scale PPA solicita- tions during 2019 supported a pipeline of 6.4 GW of potential new offshore capacity.
Total offshore capacity to date is now 20 GW, of which Europe has accounted for 98%.™
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w w w . N E W S B A S E . c o m Week 09 04•March•2020