With an expected addition of 221GW of new wind capacity from 2013-2020, wind development in the Asia Pacific (APAC) region remains solid.
The lion’s share of capacity growth will continue to be supplied by China and India, but high growth rates will be expected from emerging markets in South-East Asia and the Pacific.
Energy produced from fossil fuels currently comprises almost 80% of total energy consumption in the APAC region. This fact is forcing countries such as Japan, South Korea and Taiwan who import almost 90% of their energy to look for alternative sources of energy to diversify their energy mix. Technological advances, lowering costs and a general disfavour of nuclear energy, will further propel wind power development and open up new and emerging markets in the region.
Favourable supportive schemes such as reinstated incentive mechanisms, increased renewable energy targets and established FIT schemes have been designed to attract investors to the wind power industry. Most countries in the region remain open to foreign investment and strong pipelines reflect growing confidence in the region. Nevertheless, clarity on long-term policy particularly for offshore and emerging markets is still required.
Furthermore, the need to improve grid infrastructure to integrate wind successfully is still a common theme in all APAC markets; whether it relates to poor grid coordination in Japan, lack of grid capacity in India or better grid management in Australia. Resolving these issues requires significant funding from national governments, as well as reforms in the power sector. This is especially true in East Asia – including China, Japan, and South Korea – where state-controlled utilities and grid operators are often hesitant to increase wind power uptake due to preference for traditional and less variable energy sources. This has led to vast amounts of unused wind power capacity. In China, for example, 8.8% of all wind power generation from Q1 to Q3/2013 was curtailed.
Fortunately, many APAC governments have started to implement policies in favour of power sector reforms requiring compulsory intake of renewable energy. They have also increased investments in grid infrastructure to maximize power generation from wind. The process will take years to take effect, but MAKE expects that by end of 2015 the grid situation in many key APAC wind markets will have improved significantly.
The pace of offshore continues to be slow in the region, though progress has not stopped. China’s more than 4GW of approved offshore projects will take time to kick off as developers await better incentives. In other East Asian markets such as Taiwan, Japan, and South Korea, demonstration projects are already underway and large scale offshore projects are scheduled to start from 2015 onwards. The offshore wind power sector in the APAC region is expected to be one of the fastest growing sectors.
MAKE’s inaugural Asia Pacific Wind Power Outlook report is a 54-page document containing 98 charts, tables and graphs providing in-depth analysis of Asia Pacific wind power markets. Key topics covered include important market developments from 2013 to 2020, regional macro conditions, regulatory frameworks, the region’s position in the global wind market, and profiles of all the major and emerging wind markets in Asia Pacific that will see sustained future growth.
Press release, December 4, 2013; Image: uni-faith