As the world shifts to renewable energy, offshore wind emerges as a key player. Established markets have laid the groundwork, but emerging markets offer distinct challenges and opportunities. In this blog, we’ll look at the operations driving offshore wind construction in these markets, exploring the key factors for growth, the hurdles to overcome and strategies for success.
The growth trajectory
Emerging markets, including countries like Vietnam, Taiwan, and Brazil, are increasingly turning to offshore wind to meet their growing energy needs while reducing reliance on fossil fuels. According to projections, global installed offshore wind capacity is set to skyrocket, reaching an impressive 630 gigawatts (GW) by 2050, up from just 40 GW in 2020 [1]. This growth presents a significant opportunity for emerging markets to establish themselves as central players in the offshore wind sector.
Unique opportunities and challenges
Emerging markets have vast coastlines and favourable wind conditions, making them ideal locations for offshore wind development. For example, Vietnam’s 3,000 kilometres of coastline and strong coastal winds present immense potential for offshore wind projects [2]. However, tapping into this potential comes with its own set of challenges.
Navigating regulatory frameworks
Navigating regulatory frameworks is a key challenge. In Vietnam, the government’s recent plan (PDP8) targets 18.6 gigawatts of solar energy and 18.0 gigawatts of wind by 2030 [3]. Achieving these goals requires close collaboration between government and industry, to stay compliant and secure necessary permits for projects.
Infrastructure development
Building offshore wind infrastructure in developing markets needs substantial investment in port facilities, transmission networks, and supply chains. Many emerging markets don’t have the necessary infrastructure to support offshore wind construction, posing logistical challenges for developers. Investing in local infrastructure and integrating into local supply chains are important steps for successful project implementation.
Technological advancements
Technological advancements play a key role in driving offshore wind construction. Innovations such as floating foundations and larger turbines have expanded the geographical scope for offshore wind projects, allowing developers to tap into deeper waters previously deemed unsuitable for traditional bottom-fixed foundations. For example, Taiwan is actively investing in innovative technologies such as floating offshore wind to harness its deep-sea potential [4]. By 2050, Taiwan aims to achieve 45-50 GW of offshore wind capacity, with a significant portion coming from floating wind farms [5].
Strategies for success
To thrive in emerging markets, companies must adopt strategic approaches tailored to the unique characteristics of each market. This includes establishing clear offshore wind strategies, building strong partnerships with local entities, and investing in capabilities to deal with regulations and logistical challenges effectively.
Unlocking offshore wind potential
Offshore wind construction in emerging markets presents a promising opportunity for sustainable energy development. With the right strategies and investments, these new markets can harness their large coastal resources to drive significant growth in the offshore wind sector, contributing to a greener and more sustainable future for all.
References:
- https://www.mckinsey.com/industries/electric-power-and-natural-gas/our-insights/how-to-succeed-in-the-expanding-global-offshore-wind-market
- https://www.mckinsey.com/industries/electric-power-and-natural-gas/our-insights/capturing-the-wind-renewable-energy-opportunities-in-vietnam
- https://www.mckinsey.com/industries/electric-power-and-natural-gas/our-insights/capturing-the-wind-renewable-energy-opportunities-in-vietnam
- https://www.digitimes.com/news/a20231107VL205/offshore-wind-renewable-energy-taiwan-asia.html#:~:text=The%20Taiwanese%20government%20aims%20to,focusing%20on%20Taiwan’s%20deeper%20seas.
- https://www.en-former.com/en/taiwan-delivery-capacity-stretched-by-growing-project-pipeline/#:~:text=The%20overall%20ambition%20is%20to,offshore%20wind%20capacity%20by%202050.
