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China coursing towards 2020 30GW offshore wind target

Comprehensive report on the offshore wind power market finds China taking a steadily dominant role, particulary after its Five-Year Plan has been kicked into action

Chinaʹs offshore development portfolio will soon reach at least 25 per cent of the global total

China’s offshore wind portfolio could soon reach more than a quarter of the global total as it courses towards reaching its 30GW target by 2020, according to a new report by market consultants BTM.

The 250+ page report states by October 2012 China had the second highest wind capacity in the project pipeline, taking 5 per cent of the 95 GW global offshore wind capacity in the project pipeline. Europe meanwhile contributed to 86 per cent, followed by China with five per cent, the US and South Korea with four per cent each, and Japan with two per cent.

“Taking into account China’s offshore wind target of 30 GW by 2020 and project proposals made at the provincial level, however, it is expected that Chinaʹs offshore development portfolio will soon reach at least 25 per cent of the global total”, said BTM on 19 November.

While the authors found offshore wind development in Asia in the forecast period to 2016 was moderate, rapid growth is expected in the following five year period. Offshore wind power will account for 7.7 per cent of global wind power installation by the end of the prediction period.

In Europe, meanwhile, offshore wind has emerged as a leading source of renewable energy and will unquestionably help member states meet the EU emissions targets. The report predicts that by the end of 2021, Europe will account for 63.4 per cent of total global offshore wind installation and maintain its position as global market leader.

BTM identifies leading developers in South Korea and Japan, most of which are utilities or industrial conglomerates. Last year saw the continued dominance of Siemens in the European market, but with several new players appearing in both Europe and China. “With many years’ experience, Siemens and Vestas remain the market leaders in offshore turbines, supplying turbines to most of the latest developments”, states the report.

It is likely that companies such as REpower, Areva Wind, Bard and Sinovel will see more turbines installed in the coming years, and that new entrants from the Far East, notably China, Japan and South Korea, will soon enter the offshore wind market, found BTM.

Moreover, the large capital requirement of offshore wind projects has relied upon cash‐rich utilities, a trend that is expected to continue. However, the report finds that although utilities with historically deep pockets and established offshore wind experience will lead the sector in the future, utilities are seeing depleted cash resources and are seeking alternative unconventional sources of funding.

The report, however, notes that Independent Power Producers and clean energy companies are beginning to show more confidence in offshore wind investment. Both types of companies will account for 11 per cent of global development if all projected wind farms are installed according to plan. In addition, with the maturation of the offshore wind sector, industrial conglomerates, private equity groups, pension funds, and privately owned companies are entering the market, helping to increase market investment.