Page 6 - AsiaElec Week 49 2021

AsiaElec COMMENTARY AsiaElec

under-reported nature of many smaller onshore
project developments. New Deal and rising investor interest.
Fitch also stresses that offshore wind in the Furthermore, the South Korean market is
NAWE region has seen steady growth, with large looking to develop large-scale floating wind
markets such as the US’ 28-GW pipeline moving technologies. The government, for example, has
forward with projects entering advanced stages approved an electricity business licence for the
such as post-FID, licensing and construction for first phase of a 1.5-GW floating offshore wind
the first time. project in Ulsan. The project is developed by
Fitch’s growth forecast for the US offshore Total and Macquarie, which have previously
wind power sector also accounts for 11.5 GW of signed a co-operation agreement to develop
offshore wind capacity set to come online by the five floating offshore wind projects, with a total
end of the decade. Furthermore, increasing sup- combined capacity of 2 GW, on the eastern and
port for the sector at the US federal level under southern coasts of the country, the first floating
the Biden administration leads us to expect that wind licence to be granted, and sets the stage for
sizeable upward revisions to the forecasts are an emergence of the subsector.
“likely” over the coming years. The report outlines that that NAWE repre-
The Biden administration has set a goal of sents the lowest risk region for the technology’s
deploying 30 GW of offshore wind in the US by deployment, due to the region being comprised
2030 – a significant ramp-up from the 42 MW of highly stable economies with strong legal
of offshore wind capacity currently in operation. frameworks, access to financing and an extensive
Fitch sees an acceleration of offshore wind history of successful development.
projects in new markets in Asia, and to a lesser Asia comes second, with the offshore wind
extent, Central and Eastern Europe (CEE) and sector having lower risk profiles than onshore as
Latin America (LATAM). This is being driven well. This is due to the large number of onshore
by the technology cost decline and maturing of wind project cancellations and suspensions in
global supply chains and manufacturing. some markets such as India, which has seen sig-
Markets such as South Korea, Japan, Tai- nificant challenges in realising its wind pipeline.
wan and Vietnam are all looking to develop Furthermore, many of the offshore projects hold
large-scale offshore wind programmes that will high status within those markets and considera-
account for almost all of their respective wind ble nationally significance for their power sector.
project pipelines, Fitch notes. Fitch also highlights that many of the developers
In the case of South Korea, for example, it behind the projects in Asia are highly experi-
notes that renewables growth potential will enced companies such as Ørsted, which has an
remain largely concentrated in the offshore extensive history of successful developments.
wind sector, where the market’s large coastal In contrast, the report says that onshore wind
zones offer an alternative to meet the country’s does remain the project class that is most likely
ambitious renewables growth targets. While off- to succeed in the LATAM and MENA regions.
shore wind remains an underdeveloped sector In LATAM, this is due to the sector being more
in the South Korean renewable energy indus- nascent, involvement of experienced entities and
try, at present the pipeline is accelerating due to minimal project pipeline, with very few markets
stronger government support under the Green looking at offshore deployments.™

P6 www. NEWSBASE .com Week 49 08•December•2021