China Reaches 45% of Global Offshore Wind Capacity
Clarksons Research has released onto its Renewables Intelligence Network (RIN) platform a new briefing profiling China’s offshore wind sector, including capacity forecasts, intelligence on vessel deployment and new province level analysis as part of an expansion of Chinese market content on RIN. Reviewing the data, Steve Gordon, Managing Director of Clarksons Research commented:
China has rapidly grown into a major offshore wind market in last decade, overtaking the UK in 2021 as the world’s largest producer of electricity from offshore wind (June 2022: China is 45% of global capacity with 102 farms of 24 GW and involving ~5,000 turbines).
• Projections suggest that by the middle of the decade, Chinese offshore wind capacity will more than double to 54 GW (Chinese policy target is 60 GW) and involve 177 farms and 8,700 turbines by end 2025.
•Installed offshore wind capacity off China is set to grow by 12% in 2H 2022, a moderating of growth after the record start-ups of last year and ending of central government subsidy (2021: an extraordinary 16.6 GW was bought online in the final year of supportive subsidies).
Growth underpinned by developments in Guangdong and Jiangsu, 14th five-year plan highly supportive of offshore renewables …
• Capacity expansion in China looks set to be underpinned by Guangdong province (planned to reach 17 GW by end-2025 (up 209% from today’s 5.5 GW)) and Jiangsu province (projected to reach 15 GW by end-2025 (up 27% from 11.8 GW)).
• The 14th five-year plan remains supportive (i) directly to offshore wind including some continued moderate province level subsidy and further policy support towards identified clusters and deep sea / floating wind projects and (ii) broader government targets on peak CO2 emissions (2030), net zero (2060) and overall renewables targets (>1,200 GW by 2030).
• Major Chinese offshore wind developers include CTG (3.4 GW of installed capacity, 4.3 GW under development, 2.6 GW planned), SPIC and CHN Energy with the greatest expansion by 2025 set to be by CTG. On a global basis, Chinese developers constitute 6 of the top 10 by active capacity although all their capacity is exclusively within China.
Chinese turbine manufacturers dominate domestic market, limited overseas expansion, investment in supply chains strengthening …
• Chinese turbine manufacturers (OEMs) continue to dominate in the domestic offshore wind market, accounting for >99% of active offshore wind capacity off the country. Leading Chinese OEMs include Shanghai Electric WP (8.3 GW of installed capacity, 1.2 GW under development, 900 MW planned). OEMs are facing some challenges during the ‘post-subsidy’ period, as developers push to lower project costs and raw material prices (such as steel) rise significantly.
• Chinese OEMs are expanding production capacities and breaking into overseas markets, such as Italy, Japan and Vietnam (with >350 turbines installed / under construction / potential).
• Investment in China’s offshore wind supply chain has strengthened recently, with many offshore wind industrial supply chain clusters currently under construction or expansion in most coastal provinces. These manufacturing facilities can supply equipment and components for offshore windfarms, including blades, generators, towers, foundations, and cables. Notably, the Dongying Industry Park and associated port is undergoing an expansion towards multi-GW turbine manufacturing capacity, as well as having two dedicated wind berths at port.
28 active WTIVs in Chinese market, fleet supporting offshore renewables increasing …
•China remains the largest WTIV market globally, accounting for 28 units and 62% of current WTIV deployment (albeit only 37% of deployment ≥ 1500t crane size). Demand for installation units looks set to remain strong over the coming years despite the current ‘post-subsidy’ period, with 10.5 GW of new capacity having recently reached FID or entered construction. Owners of WTIVs in Chinese waters include Nantong Ocean Water (4 vessels), Shanghai Ouyang (4 vessels) and CCCC Third Harbour (4 vessels).
• While the average turbine capacity in China has historically been lower compared to that of European markets (2021: average turbine size in China was 5.9 MW versus 7.8 MW in Europe), our projections suggest that by end-2025 the average turbine capacity of start-ups will grow to >8 MW, prompting Chinese WTIV owners to follow in the wider WTIV upsizing trend (Chinese owners account for 59% of ≥1500t WTIVs on order).
• The size of the specialist fleet supporting offshore renewable activity in China continues to expand. The domestically Chinese owned fleet has increased year-on-year over the past decade with some vessel sectors including WTIVs, CTVs and crane vessels having expanded significantly since start-2021, in order to meet the rapidly growing demand for vessels to support wind farm construction, as well as the increasing operations and maintenance work in China.
Offshore wind set to play vital role in energy transition, 0.3% of global energy supply today but potential for 7-9% by 2050, 248 GW and 30,000 turbines possible by 2030 …
•The global offshore wind industry looks set to continue its exciting growth phase and the long-term scenarios suggest offshore wind will play a vital role in the Energy Transition, potentially providing between 7% and 9% of global energy supply by 2050 (offshore wind produces just 0.3% today: see the Clarksons Research Energy Transition Model for more details). Globally projections suggest 248 GW and 30,000 active turbines by 2030 (today there is 53.1 GW and 11,000 turbines).