The offshore wind market in the Asia Pacific region is going to be huge. That will lead to very significant growth in the supply chain and in demand for vessels and services, but countries in the region need to take steps now to prepare and to create a ‘conveyor belt’ for offshore workers
That was the key takeaway from a webinar that took place 16 June 2021 as part of Riviera Maritime Media’s Offshore Energy Webinar Week. In that webinar, Seizing opportunities in Asia’s fast-growing offshore wind industry, delegates heard from OWC APAC director Tom Whittle; Ampelmann commercial manager Australia, Malaysia and Taiwan Ramesh Namasivayam; CWind Taiwan general manager and director Tom Manning; and Maritime Strategies International senior offshore analyst Ferenc Pasztor.
All of the speakers agreed the offshore wind industry in the Asia Pacific region is booming and is set for long-term growth, but also agreed there are challenges to overcome as the market expands, the region is not a homogenous one and each country in the region is a distinct market with its own specific requirements and challenges.
Mr Whittle told delegates offshore wind is expected to surge to 234 GW total installed capacity by 2030, from 36 GW currently, with a large part of that growth driven by countries in the Asia Pacific region. He said Asia’s share of the global offshore wind market is set to increase from 24% to 42% by 2025, led by Japan, Taiwan, South Korea and other countries.
“Japan has a target of 10 GW by 2030 and 30-45 GW by 2040,” Mr Whittle told the webinar. “In South Korea, the Green New Deal set a target of 12 GW by 2030 and President Moon Jae-in has been very public in his backing for offshore wind.” As he noted, some very large-scale projects have also been proposed in South Korea, including one of 8.2 GW announced in February, which would be the largest offshore wind project in the world. Taiwan recently increased the capacity it intends to install between 2026 and 2035 from 10 GW to 15 GW.
Mr Pasztor said figures such as these clearly indicate that offshore wind in the Asia Pacific region is booming and there will be what he described as “ever-increasing commitments from governments in the region.”
Demand growth will drive more alliances and joint ventures between local companies and European energy and EPC companies, he said. In the longer term, he explained, the floating wind market in the Asia Pacific region is also expected to be very strong and could form most of the capacity installed in some countries. That could drive demand for the use of specific vessel types, such as anchor-handling tug supply vessels and anchor-handling tugs. “All in all,” he said, “a massive ramp-up of supply chains is coming.”
Addressing some of the challenges in the APAC market, Mr Manning said one of the key issues is that Asian offshore wind markets – especially Taiwan, the first mover in the region – lack a skilled maritime workforce. “There are challenges throughout the supply chain, but particularly for offshore crew and technicians,” Mr Manning explained.
He noted that CWind Taiwan has focused on transferring knowledge and training using European and in-country experts, but said much still needs to be done to develop the maritime workforce and train employees, and other companies will need to follow suit.
“There needs to be a focus on creating a conveyor belt of human resources into the industry,” said Mr Manning. The industry and the authorities in the countries in question need to engage with the potential workforce early to create career pathways for seafarers, he suggested.
Mr Namasivayam highlighted other challenges: in Taiwan, these include Taiwan-specific rules that exclude regional tonnage. As highlighted previously by OWJ, this includes the use of passenger-classed vessels for more than 12 passengers, and problems securing visas for equipment operators because of Covid-19. As he also pointed out, conditions offshore Taiwan are very different from those in Europe. Vessel owners and equipment firms need to bear this in mind. Ampelmann has found that landing heights required for its offshore access systems and sea states differ widely from those in Europe.
All of the new markets in the Asia Pacific region need to focus on creating internationally competitive domestic supply chains, speakers agreed, and there needs to be greater flexibility when it comes to what qualifies as local content for projects, rather than a purely percentage-based system.
But it’s not just maritime aspects of the industry that will require attention, Mr Manning suggested. “Taiwan has had some success supporting domestic fabricators, but neglected companies outside the government’s shopping list,” he said.
“A system is needed to ensure that any ‘match-fit’ company can prosper,” said Mr Manning. “Emerging markets naturally want to focus on local supply chain development for this new industry. Taiwan has had a clear, somewhat prescriptive, approach to items and services it has focused on.”
Speakers also agreed that in the longer term there will also be opportunities to support long-term employment and innovation in operations and maintenance, of the type that has already occurred in the offshore wind market in Europe.
New Asian markets will have significant opportunities for vessel owners. Many have under-developed local fleets, the speakers in the webinar agreed, but the regulatory framework for vessels is also under-developed, or overtly protectionist.
Countries need to create conditions where vessel availability and quality do not become bottlenecks for construction, they agreed. And as far as possible, they should ensure regulatory alignment with Europe on crewing and vessel operations, such as industrial personnel.
Governments need to support the build-up of local fleets by removing prohibitive barriers to ownership and flagging, and need to identify key asset classes and facilitate an Asia-wide market for them.
Participating in the Seizing opportunities in Asia’s fast-growing offshore wind industry webinar were (left to right) Tom Whittle, APAC Director, OWC; Ramesh Namasivayam, Commercial Manager Australia, Malaysia and Taiwan, Ampelmann; Tom Manning, General Manager and Director, CWind Taiwan; and Ferenc Pasztor, Senior Offshore Analyst, Maritime Strategies International