Globally, the collective power generation capacity of offshore wind projects grew by 4.5 GW in 2018. The trend continued in 2019 while changes in policies relating to offshore wind across the Asia-Pacific suggest the region will soon catch up with Europe, and much of the buzz is in developed parts of East Asia, including China, Taiwan, Japan, and South Korea.
Recently however, the emergence of new and innovative floating wind power technologies has set the sails for change, opening significant opportunity for wind power generation in deep waters.
Floating offshore wind will allow developers to locate projects in windy, deeper water sites that have not, until now, been viable. Floating turbines can be certified for extreme weather conditions and have been tested for ten years in extreme waves (in Norway, and Portugal) and typhoons (in Japan, offering nations the opportunity to benefit from wind resources that may otherwise go untapped.
Floating offshore wind allows developers to locate projects in windy, deeper water sites
The first commercially successful floating wind power installation was installed in 2018. The Hywind Scotland Pilot Park is a 30MW five-turbine installation located 25 kilometres from the coast of Aberdeenshire, Scotland. The installed turbines reach more than half a kilometre above the surface of the sea, with a further 256 feet submerged beneath the water’s surface. Of the three major design styles for floating wind power, Hywind represents an example of spar buoy technology, which is designed with a single cylinder that is ballasted to promote stability.
One real benefit of floating wind is that the turbines and foundations can be assembled together on the quay side and towed out to the offshore site. In contrast, traditional fixed-bottom turbines require a large installation vessel to take the foundations and turbines out to deep waters for setup. The reduced reliance on large vessels, along with associated reduction in installation costs and vulnerability to weather restrictions during installation could be significant on a large commercial project.
In Asia, the potential for offshore wind (both fixed bottom and floating) is exciting, and the market has developed a steady pace over the last two or three years. The first development kicked off in Taiwan, where several offshore wind developers such as Orsted, Energi and Northland Power have headquarters or bases there where they have implemented fixed bottom projects.
South Korea, which has a keen interest in developing a large proportion of its energy generation with renewables, is also home to large ports and expansive infrastructure. Such infrastructure, together with the experience in managing heavy industries, can help support a seamless local supply chain that is so craved by many nations investing in offshore wind. Vietnam is another country with an eye on future offshore wind projects – with a current focus on near shore projects, which are perceived to be less challenging than projects further offshore.
In Asia, the potential for offshore wind (both fixed bottom and floating) is exciting
Looking more at floating project opportunities, the deeper waters around areas such as Japan may, with the dawn of commercial floating wind projects, be available for development. If we explore the reality in nations like Singapore and Malaysia, it’s clear why this new technology could be so transformative. These two countries experience relatively low wind speeds on land, while at the same time are surrounded by coastlines and national waters that are ill-fitted for the adoption of bottom fixed offshore wind technology. Floating wind power is a particularly encouraging proposition for an economy such as Singapore, which not only has to face the challenges of relatively limited access to shallow waters suitable for traditional offshore wind, but also limited land availability. The promising vision for commercial offshore wind power generation may soon come to fruition.
Challenges of Offshore Wind Power For all these countries, one challenge is developing the regulatory framework and creating the Power Purchasing Agreements (PPAs) that can be banked by both international financiers and local financiers. Access to electricity grid infrastructure for offshore projects is the second challenge. Potential project sites are not always close to the onshore locations where power is needed and building the onshore infrastructure needed to transport the electricity is costly. It would also be short-sighted to underestimate the drive to develop local expertise and a local supply chain to maximize the benefits of projects and the overall pipeline to local economies and communities.
There is a real recognition on the part of international players that corporations cannot simply steam in and expect to successfully deliver a project without understanding the starting point in that country. A starting point that will be different for each jurisdiction. International partners also need the support of local politicians and population in order to successfully deliver a great project. Engaging in a two-way conversation will be key for both international parties and local players looking to move forward with offshore wind projects throughout the Asia Pacific region.
Installation and logistic requirements will not be the same.
On a more practical front, floating wind presents additional challenges that fixed bottom projects do not have to overcome. A commercial scale floating offshore wind will be similar but different to its bottom fixed relation. The contractual framework may be different. Installation and logistic requirements will not be the same. Projects will rise and fall on the availability of finance and insurance cover for key risks. The terms on which those will be given and the extent of risk that will ultimately sit with the developer as opposed to being managed within the supply chain remains an unanswered question. The questions are being asked, however, and developers now need to turn their minds to how differences between floating and bottom fixed projects will be addressed on a commercial scale.
For countries looking to implement offshore wind, it is crucial that project partners and governments obtain and provide the right infrastructure, value chain, and procurement strategies to enable efficiency. Without, there are real concerns of backlogs and project delays. Moreover, developers do not have unlimited funds. If countries do not look to positively address matters within their control, there is a real risk that benefits, and funds will be invested elsewhere.
We’ve mentioned the challenge of developing a local supply chain. It is also important that local funders and investors are involved. Each facet of the infrastructure that supports the offshore wind industry should be developed within the country. Know-how, experience and capital can then be generated and invested back into the local economy. Industry leaders and stakeholders in the various jurisdictions within Asia will need to work to build the right talent base to support the offshore wind vision.
The promising vision for commercial offshore wind may soon come to fruition
We have come to a tipping point in the offshore wind journey. Offshore wind is no longer a niche, expensive luxury; available only in certain locations. The spread of experience around the globe, the success of early projects in places such as Taiwan, the aspirations of so many countries and the emergence of floating offshore wind technology can combine to help stimulate the growth of this nascent market. The time for decision makers in Asia to watch on with interest has passed. Investors from around the world are now waiting and ready to turn that offshore wind vision into a reality throughout the region. Yes, there are challenges to overcome. Stakeholders can work together, however, to meet them head on and unlock carbon-free electricity for the region.
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