The Future of Offshore Wind in APAC: Key Trends and Emerging Markets

The Asia-Pacific region stands at the forefront of offshore wind development globally, with projections indicating tremendous growth from its current 40GW capacity to approximately 215GW between 2024 and 2033. This remarkable expansion represents not just an energy transition but a fundamental shift in how the region approaches power generation and climate commitments.

While markets such as Taiwan, Japan, South Korea, and China have established themselves as pioneers in the APAC offshore wind sector, countries including Australia, India, the Philippines, and Vietnam remain in developmental stages, often progressing sporadically. Unlocking the full potential of offshore wind in these emerging markets requires addressing several critical challenges through strategic approaches informed by experiences in more mature markets.

One of the most significant barriers to accelerated development is the lack of robust regulatory frameworks and consistent government support. The success of European markets like Denmark and Germany demonstrates how clear, long-term policy commitments can catalyse investment and development. Emerging APAC markets would benefit from beginning with demonstrator projects that allow for testing regulatory frameworks while providing valuable insights into financing mechanisms and supply chain dynamics.

Local content requirements present another complex challenge. While designed to ensure economic benefits flow to local communities, overly stringent requirements can significantly hamper development by increasing costs and deterring international developers with essential expertise. Taiwan's experience highlights this tension, with several leading international developers exiting projects due to spiralling costs associated with local content mandates. A balanced approach that fosters local economic growth while maintaining an attractive environment for global expertise is essential.

Financial viability remains a pressing concern amid rising inflation, high interest rates and ongoing supply chain disruptions. Attractive financial subsidies and tax incentives, similar to those implemented in the US through the Inflation Reduction Act and in the UK via Great British Energy, could help make offshore wind projects more financially viable in their initial phases.

The underdeveloped state of local supply chains and port infrastructure poses additional obstacles. Even established European markets face bottlenecks in these areas, particularly for upcoming floating wind projects that require specialised port facilities. China offers a noteworthy example of rapidly developing these critical elements to support large-scale offshore wind deployment.

Perhaps most promising is the emergence of floating offshore wind technology, which opens vast new areas for development in deeper waters. Japan has been particularly active in this space, with its recently approved amendments to marine utilisation acts enabling development in its Exclusive Economic Zone—an area 12 times larger than its landmass with an estimated combined potential of 733GW. South Korea has also made significant strides, with projects like the MunmuBaram Floating Offshore Wind Project in Ulsan recently completing its Environmental Impact Assessment.

Technological advances in floating platforms, turbine efficiency and grid connection solutions are driving down costs and improving performance. Companies like Equinor and Principle Power are pioneering innovative floating foundation designs that provide optimal stability while facilitating large-scale industrialisation of floating wind.

Expert elicitation studies suggest the average levelised cost of electricity (LCOE) for newly installed fixed-bottom offshore wind could reach USD72.50 per megawatt hour by 2040, while floating offshore wind is expected to approach USD81.40/MWh by 2050. This indicates that floating technology will likely approach competitiveness with fixed-bottom installations in the long run.

The future of offshore wind in APAC ultimately depends on the region's ability to learn from established markets while adapting solutions to local contexts. International cooperation, particularly in research and development, regulatory frameworks, and financing models, will be crucial to accelerating this transition. As costs continue to decline and technology improves, offshore wind is poised to become a cornerstone of the region's renewable energy landscape, driving sustainable economic growth while supporting climate goals.