The Asia-Pacific wind power market is expected to register a CAGR of less than 10.45% during the forecast period. Major factors attributing to the growth include the favorable government policies, the increasing investment in wind power projects, and the reduced cost of wind energy, which led to an increased adoption of wind energy, thereby positively contributing to the demand for wind energy. The increasing adoption of alternate energy sources, such as gas-based power and solar power, is likely to hinder the market growth.
- The onshore segment is expected to be the largest market during the forecast period in Asia-Pacific, owing to increased onshore wind capacity additions, supported by reducing the cost of electricity generation from onshore wind projects.
- The technological advancements in efficiency and decrease in the production cost of offshore wind turbines are expected to create ample opportunity for the market players in Asia-Pacific.
- China dominates the wind power market and remains the largest onshore market with 21.2 GW new capacity additions. The government policy and incentives made China a favorable hotspot for investment, and therefore, the wind power market is expected to flourish in the coming years as well.
Key Market Trends
Onshore Segment to Dominate the Market
- Onshore wind energy power generation technology evolved over the last five years to maximize electricity produced per megawatt capacity installed to cover more sites with lower wind speeds. Besides this, in recent years, wind turbines have become larger with taller hub heights, broader diameters, and larger wind turbine blades.
- The newly installed capacity of wind power in China in 2019 reached 25.74 GW. Of this, the new installation of onshore wind power was 23.76 GW, and the new installation of offshore was 1.98 GW. The cumulative installed capacity of wind power generation reached 210 GW in 2019.
- The onshore market in China installed capacity of 23.76 GW in 2019. Through the 206 GW total installations at the end of 2018, China became the first market to surpass 200 GW of the total installed capacity, reaching its target of 200 GW two years earlier than planned (based on the Five-year Plan 2016-2020). Adding to this, the total wind power generation reached 405.7 TWh in 2019, exceeding 400 TWh for the first time and accounting for 5% of the total power generation in the country.
- China's northern regions have abundant onshore wind potential. The provinces of Qinghai, Xinjiang, and Inner Mongolia, and the country's northeast have the highest power density (average values between 400 and 600 watts per square meter (W/ m²)), and most new onshore installations are expected to be deployed in these areas.
- Although the wind power market has a positive outlook across the world, the coronavirus (COVID-19) outbreak is expected to have a negative impact on the supply chain and installation operations in the Chinese wind energy industry, as well as the global wind energy. Moreover, as the majority of the global wind turbine and related manufacturers are located in China, the market is expected to witness a slight slowdown in the coming years.
- Japan, being an island nation, has many suitable locations for offshore wind power generation. The country analyzed that offshore wind turbines can generate five times more electricity than onshore wind turbines. Also, there are likely to be land constraints for the development of onshore wind farms in the future. Owing to this, the government aims to promote more offshore projects and, at the same time, introduce necessary laws to reduce operators' risks and encourage new entries for the companies.
- Similarly, other countries, such as South Korea, are good locations for offshore wind farms. Most wind farm developments in the country have been onshore turbines. Currently, onshore installed capacity is 1,229 MW. Numerous Korean conglomerates have already begun to invest significantly in the offshore wind farm business.
- From all these factors, it can be concluded that the offshore sector is expected to gain significant traction in the market in the coming years and is expected to be the fastest-growing segment in the market.
China to Dominate the Market
- In China, nearly 70% of the electricity produced is from thermal sources of energy. Owing to the increasing pollution from the thermal sources, the country has been making efforts to increase the share of cleaner and renewable sources in power generation, which is expected to drive the wind power market in the country.
- The newly installed capacity of wind power in 2019 reached 25.74 GW. Of this, a new installation of onshore wind power was 23.76 GW, and the new installation of offshore was 1.98 GW. The cumulative installed capacity of wind power generation reached 210 GW in 2019.
- Though the wind farms are in the wind-rich northern and western provinces of the country, delays in grid connection and improper grid management continue to be the major issues.
- China, the world's largest wind market, remained partially isolated from the global market. The national manufacturers cover almost all the internal demand and have very few exports to other markets.
- In May 2019, China planned to invest approximately CNY 160 billion in an offshore wind project with an installed capacity of more than 10 GW. During the same period, Beijing announced its plans to invest USD 360 billion in renewable energy, by 2020, and cancel its plans for the construction of 85 new coal-powered plants.
- Chinese manufacturers comprise nearly 95% of the overall wind power market. At the end of 2018, the top turbine manufacturer in China was Goldwind, followed by Envision and Mingyang. The small non-Chinese presence (4%) is held by three main foreign manufacturers, namely, Vestas (2%), Siemens-Gamesa (1%), and GE (1%).
- The government policy and incentives made China a favorable hotspot for investment. Moreover, with the increasing capacity, China outpaced Europe to become the largest onshore wind market in 2018, with nearly one-third of the global installed capacity.
Some of the key players include Acciona Energia SA, Orsted AS, EDF SA, General Electric Company, and Siemens Gamesa Renewable Energy.
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