China is already the largest offshore wind market in the world, and the rest of the Asia-Pacific is gearing up to follow. Generations sat down with three local offshore wind experts — Edgare Kerkwijk, Board Member of the Asia Wind Energy Association (AWEA) in Singapore, Alf-Kåre Adnanes, Regional Division Manager AMEA at ABB Marine & Ports, based in Shanghai, and Khaleef Khan, Local Division Manager, Offshore, ABB Energy Industries, based in Singapore — for a discussion on the market outlook and their interests in the region.
What is the state of play for the offshore wind market in the Asia-Pacific and how will it evolve?
Edgare Kerkwijk, Board Member, Asia Wind Energy Association 
Alf Kåre Adnanes, Regional Division Manager (AMEA), ABB Marine & Ports 
Khaleef Khan, Local Division Manager, Offshore, ABB Energy Industries
Edgare Kerkwijk:
I would say that countries in the region are at four different stages of development. China is a market on its own and has surpassed most of the others to take the lead. With almost 40 gigawatts of capacity already installed, China is expecting to install a further three or four times this figure in the coming years. So far, the Chinese have been very internally focused, but we are now seeing the first signs of local companies exporting their expertise – turbines or vessels, for example – to other countries.
The next group includes Taiwan, South Korea, and Japan, where construction of the first offshore wind farms has either been completed or is well underway. Taiwan is leading the pack, with quite a few gigawatts of capacity already installed. More auctions are underway and the market is set to grow in the coming years. Taiwan has also developed quite a bit of its own supply chain and is looking to export its expertise to other markets. Meanwhile, South Korea and Japan have both held their first round of auctions, and construction of the first wind parks is underway.
The third group of countries comprises the emerging markets of India, Vietnam, the Philippines, and Australia. Various projects and tenders have been announced, as have government policies, but construction has not started yet. Australia has announced around 50 projects, but these will take time to materialize because, as is the case with the other countries, there is still a lot to be figured in terms of grids, ports, logistics, and off-takers for the electricity, etc.
Bringing up the rear are Bangladesh, Indonesia, and Thailand. So far, there has been very little discussion about offshore wind development in these countries. But developers will likely become increasingly interested in projects as all three countries face serious impacts from climate change and their governments will have to find ways to transition to renewable energy. Here, offshore wind is a more viable solution than, for example, solar farms because of the higher energy yield. In addition – and this goes for the whole of the Asia-Pacific – the plethora of very densely populated areas make onshore renewables infrastructure much harder to install.
Alf-Kåre Adnanes:
I agree with Edgare's analysis, but my take is that the market is booming and will only get bigger. At ABB Marine & Ports we are deeply involved, working with shipowners, shipyards, and designers in developing the current and next-generation fleet of vessels to support the market expansion. Turbine installation vessels are the 'jewel in the crown', followed by other types of construction support vessels (CSVs) such as heavy-lift crane vessels, cable layers, dredgers, maintenance vessels – you name it. We need a whole new fleet to meet demand. Some can be repurposed from traditional (oil and gas) offshore vessels, but most are specialized vessels that will need to be tailor-made. We are applying our expertise to support designers not only in physically optimizing the ships themselves, but also how they are operated, controlled, and remotely coordinated.
Khaleef Khan:
Basically, it is the trajectory of cost-per-megawatt ratio that drives the market demand. With positive momentum, we can be sure that more projects are going to materialize much faster. As Edgare points out, we already see this happening in the likes of Vietnam, the Philippines, South Korea, Australia, Japan, and Taiwan.
Offshore wind is a viable technology on par with other new technologies, such as hydrogen production and solar power. We may see how a combination of these will play an integral part of the regional energy transition.
Our Process Automation Energy Industries division at ABB is focused on providing solutions for offshore wind substations, either subsea, floating, or fixed to the seabed. We also provide electrification, automation, control, and digital solutions designed specifically for offshore wind. Supporting our Marine & Ports division with standardization of solutions for offshore vessels is also part of our mandate.
To succeed globally, Asia-Pacific must excel across multiple domains. What can organizations do to accelerate this growth?
Khaleef Khan:
Asia-Pacific is at the forefront of both demand and supply right now. We see more of components for several European and US projects being developed and built in the region, which has become a prime mover in the supply chain. Interestingly, while the offshore oil and gas market was expected to flatten, there has been a push for higher levels of investment in this space. Developments in LNG, which is a transitioning fuel in the energy transition, are also happening in parallel with offshore wind and other green energy projects.
However, Asia-Pacific as a prime mover is also being subjected to a lot of strain on supply chains with demand from projects all over the world. These countries must step up supply-chain investments because they are in a strong position; the infrastructure is there, as is the expertise and skills and talent market. More investment by companies to diversify their manufacturing base in the region will really boost the market. Production of the equipment and services needed for wind-farm installation – millions of tons of steel, turbines, high-voltage equipment, and the whole distribution network – is by and large centered in Asia-Pacific, spearheaded by China.
Edgare Kerkwijk:
When the industry first started to develop, we saw a lot of European maritime companies moving to the region to get a slice of the action. Fortunately, maritime stakeholders in Asian countries also started to look at offshore wind, partly driven by slow growth in the oil and gas sector. That has changed in the past few years with renewed activity in oil and gas, so companies now have to decide which area to focus on. We have seen some companies flirt with offshore wind, but then move back to oil and gas because there is less price pressure in that market. Others have offshore wind as a secondary focus and this is beginning to grow.
I believe more local companies should actively develop expertise in this space, not least because a lot of regional governments are introducing localization rules to boost homegrown input. These require companies to provide the vessels and cables required for wind-farm development, or to undertake construction, so there is a lot of growth potential.
Alf-Kåre Adnanes:
On the issue of localization, governments want to create value and new jobs within their borders. That is totally understandable. However, only focusing on this aspect can slow down overall market development because they also need international expertise.
While companies like ABB need to adapt to localization requirements, we must also maintain and develop our global competence. At the same time, we need to be much more present in the countries where development is taking off. We cannot run everything out of Europe or Singapore.
How can international partnerships boost Asia-Pacific’s offshore wind market potential?
Edgare Kerkwijk:
Rather than international partnerships, I would argue that that we need to see improvement in regional partnerships. If you are an offshore wind vessel owner or crew member in Europe, for example, you might be in UK waters in October, Dutch waters in November, and Danish waters in December. The supply chain in Europe is pan-regional; we don’t have many borders or limitations on people moving around to work. In Asia-Pacific there are a lot of regulations around what kind of vessel or crew are allowed into certain countries.
However, a regional supply chain does seem to be slowly evolving. For example, people with experience in Taiwanese waters are now working in Japan or South Korea. But a lot more needs to be done. Because in offshore wind we have this cost pressure on construction, it doesn’t make sense to have vessels that can only work in Japan or Taiwan or wherever. It is in the interests of the industry and market efficiency to be able to access the best and lowest-cost resources they have.
Khaleef Khan:
I would think that there is room for improvement in how different organizations, technology players and other stakeholders can collaborate in this region to make progress in this space. As offshore wind technology is evolving, more development needs to happen through collaboration, after all, no one single party can do this alone. It would be more beneficial to find ways for the industry to leverage each other, bringing the whole industry to a level of critical mass where all parties can monetize the technology faster.
Alf Kåre Adnanes:
Partnerships can come in different guises such as joint ventures, loose partnerships, and forums to share experiences and best practices. All are essential, both international and regional. I have been involved in several forums focused on offshore technology. Gathering experts with different backgrounds and competencies is very useful. The whole industry can move faster together.
Is the political landscape favorable to the development of the offshore wind market in Asia? How can governments step in to meet the challenges?
Edgare Kerkwijk:
Governments across the region are keen to develop offshore wind technology. They see it as a good solution for the energy transition and a potential new source of employment. But they need to understand that offshore wind installations are not built in a day. They usually require the cooperation of a lot of different government ministries.
Nowadays, a typical offshore wind project is not 50 megawatts, it is often a gigawatt or more. Power needs to get onshore, into the grid, and to the load centers. This requires massive coordination. Sometimes governments announce projects too quickly without having fully figured out how to put all the pieces together. Offshore wind policies typically take five to 10 years to implement.
It is also important for governments to talk to each other and come up with appropriate policies. Europe has done very well in this regard, but unfortunately inter-governmental organizations are not that strong in Asia. But if countries work together, they can create a regional industry in which they support each other. Whether there is the political will to make this happen remains to be seen.
Alf Kåre Adnanes:
I doubt that any one country in the region can create an entire offshore wind ecosystem by itself, with the exception perhaps of China. Cooperation and sharing common goals is the best way forward. It makes sense for countries developing offshore wind technologies not just to target local consumption, but also export opportunities in the global market. Regional governments should consider these wider business implications.
Moreover, investors need a predictable long-term picture to be willing to invest the large sums of money required. They need to know that the energy they produce, say five years down the road, can be sold at acceptable terms and prices. This framework must be initiated by governments because it is a new field that demands political support.
Khaleef Khan:
Asia is progressing with good fundamentals, but the question is really how to ensure all of them are consistent, complementing each other and ladder up to broader goals. Getting this right will be important, especially when projects in this space involve a diverse representation of companies, which have different requirements. There must be collaboration to generate design standards and to create synergies such as power sharing agreements between countries and less localized grids. We have seen some progress in this space, The rules are in the early stages of development, and our aim is to refine them to be foolproof, ensuring their validity not just for the next five years but for decades to come.
Final message for our readers?
Alf-Kåre Adnanes:
I am a big believer in the transition to renewable energy and offshore wind is the easiest place to start, in Asia-Pacific as elsewhere. It is probably not enough to reach emissions targets alone, but it will be a significant part of the future energy mix globally. We already see increasing enquiries from shipowners for our support to optimize ship designs. There is also a huge drive to make these developments efficient both in terms of cost and operational productivity.
Khaleef Khan:
While big projects play a crucial role in our energy transition journey, let's not overlook the significance of celebrating wins in smaller fields. We see this evolution in the oil and gas space to reduce the carbon footprint of offshore installations; for example, eight to 10 turbines providing power for one platform. This is a promising new application area for offshore wind. It's the accumulation of these incremental successes that propels us forward on this progressive journey toward a sustainable future.
Edgare Kerkwijk:
The offshore wind industry in the Asia-Pacific is providing a lot of opportunities for many stakeholder sectors. We’ve seen fantastic growth in the last couple of years and new countries coming onboard. However, it is important that these countries look at what has been learned elsewhere. The industry has been around in Europe for 20 years and the process of getting started will be more efficient if they seek input from those with more experience in this technology.
