Asia outpaces Europe in wind development for the first time

Asia received $10b of investments whilst Europe got $5.6b.

Financial investment activity in the offshore wind sector for the Asia Pacific market has surpassed that of Europe for the first time largely thanks to developments in Taiwan, Japan, and Vietnam, according to Renewables Consulting Group (RCG). The total investment value reported for Europe projects in 2019 was $5.6b, whilst the value for Asia Pacific was at least $10b.

Five projects in Taiwan reached financial close in 2019, totalling almost 2GW in cumulative capacity. The Changfang and Xidao projects also reached a financial investment decision in the first quarter of 2020.

Also read: CIP's 600MW Taiwan wind farm reaches financial close

Investment activity in offshore wind projects in Asia Pacific wasn’t confined to Taiwan, with the Tra Vinh 1 project in Vietnam also reaching financial close in 2019 and, in early-February 2020, the Akita Offshore Windfarm in Japan reached the same milestone. Taken together, the total investment activity in the Asia Pacific market since 2018 has exceeded that of Europe and the Americas.

According to RCG, the implementation of a stable financial support mechanism in Taiwan helped drive the financial investment activity in Asia Pacific ahead of Europe in 2019. The feed-in tariff (FiT) support regime in Taiwan has enabled projects to reach the pre-construction phase and encouraged cost reductions through downward pressure on subsidy levels.

Vietnam also updated its feed-in tariff system during 2019, with further revisions due in 2020 to address issues relating to currency exchange.

Across global markets, RCG forecasts 8.0-13.5 GW of cumulative capacity will reach the financial investment decision milestone each year between 2020 and 2023 (inclusive). This positive outlook includes some multi-phase projects that have recently secured route to market with likely investment decisions distributed according to the specific phase of development and the success of some projects is predicated on securing contracts in future solicitations.