Published on October 26th, 2018 | by Joshua S Hill0
Asia Pacific To See 355 Gigawatts Of Solar & Offshore Wind Boom In Next 5 Years
October 26th, 2018 by Joshua S Hill
The Asia Pacific region is expected to add a further 355 gigawatts (GW) of new solar PV capacity over the next five years, despite expectations that the sector will see a decline in installations this year, while the region’s offshore wind industry is predicted to grow 20-fold over the next decade.
These are the highlights from new research published this week by Wood Mackenzie looking at the renewable energy industry in the Asia Pacific region (which includes both China and Australia), specifically the region’s solar PV and offshore wind sectors.
Unsurprisingly, the larger of the two sectors will be the solar PV market which, despite falling somewhat this year, is nevertheless set to remain relatively steady over the next five years through to 2023. The Asia Pacific region has seen tremendous solar PV growth over the past decade, but Wood Mackenzie currently predicts that solar installations will drop by 18% to only 59 GW this year, thanks in large part to a 30% decline in China.
“Traditionally the leader of the pack in Asia-Pacific, China’s solar installations are expected to fall 30% this year as it is adopting various policy instruments which will reduce subsidies,” explained Wood Mackenzie’s solar analyst Rishab Shrestha.
Given its size and exploding population and economic growth, China has unsurprisingly led the region’s solar PV growth, driven partly by the country’s 13th five-year plan, published in 2016, which set a minimum target of 105 GW by 2020 — a target it met in 2017, which says all you need to know about the country’s growth. However, in an effort to regain some control of the subsidy burden the country found itself under, the Government announced in May that it was implementing a cap on new solar projects for 2018 and reducing the Feed-in Tariff (FiT), amongst other measures.
In September, a leaked set of draft guidelines issued by China’s National Energy Administration (NEA) outlined plans to help the country’s wind and solar industries reach “grid price parity” by phasing out subsidies and instead providing technological and policy support so that these technologies can compete against other energy sources.
Neighboring Japan is similarly undergoing a shift in how it awards solar contracts, transitioning from a FiT scheme to competitive auctions for projects greater than 2 megawatts (MW). However, various issues have plagued the first two auctions, causing them both to be undersubscribed. As such, utility-scale solar installations will decline slightly in the immediate future.
“The key trend we are seeing is the phase out of subsidies and transition towards auctions, which is leading to lumpy demand in the region,” Shrestha said. “That being said, Asia-Pacific will still add 355 GW of new solar capacity over the next five years, and this is partly attributable to the reduction in PV capital cost globally.”
Moving offshore, however, things are less plagued by difficulty for the offshore wind industry in the Asia Pacific, which Wood Mackenzie expects to see increase 20-fold to 43 GW by 2027. Specifically, China’s offshore wind capacity is expected to grow from 2 GW in 2017 to 31 GW by 2027. Behind China is Taiwan, which will account for 20% of the Asia Pacific offshore market with 8.7 GW.
“Taiwan presents the biggest offshore market in APeC due to a relatively stable regulatory regime, a supportive government, and openness to foreign investment,” said Wood Mackenzie senior analyst Robert Liew.
There are other Asia Pacific markets which have set ambitious offshore targets, but not every market is currently set up for success, given that a stable domestic offshore supply chain and strong government support is needed to sustain long-term offshore wind growth.
“Together with South Korea and Japan, East Asia needs around US$37 billion in investments to meet the mammoth growth in offshore wind capacity over the next five years,” Robert Liew said. “The good news is that prices are coming down. Future offshore wind prices are projected to be competitive with traditional thermal prices by 2025,” he added. “This should attract investments in offshore wind, though Asia-Pacific is still playing catch-up with Europe as it is still in the process of establishing a dedicated infrastructure to support large scale offshore growth.”
Follow CleanTechnica on Google News.
It will make you happy & help you live in peace for the rest of your life.