Market to Watch: China’s Offshore Wind Industry Post-2021

While the termination of support by the central government will slow down China’s offshore wind growth of China in the medium-term, GWEC Market Intelligence believes that this move will push the Chinese offshore wind industry to reach grid parity earlier than expected.

The strongest factor that may mitigate this financial uncertainty of subsidy-free procurement and further drive down LCOE is the strong political commitment of China’s government to continue accelerating the development of renewable energy under the context of a green recovery and achieving their Paris Agreement commitments.

From a national perspective, the recent pledge by President Xi for China to go carbon neutral by 2060 could open new doors for the offshore wind industry, which will place an increasingly important role in the country’s decarbonisation strategy, especially for the energy-hungry eastern coastal regions such as Jiangsu, Guangdong and Fujian.

From a provincial perspective, the recently issued ‘Guangdong Province Action Plan for Cultivating New Energy Strategic Emerging Industrial Clusters (2021-2025)’ has unveiled the province’s plan to speed up development of offshore wind and technology advancements, which includes achieving parity by 2025 by supporting R&D and developing offshore wind clusters in Yangjiang and Eastern Guangdong. Provincial support of the offshore wind industry will become even more important post-2021 as the central government subsidy comes to an end.

Such announcements provide long-term visibility and scale for the local industry, and we expect that annual offshore wind growth in China is likely to exceed our expectations, as we have already seen over the past few years. It is clear that China is on track to lead the transition from traditional energy sources such as coal, to wind and other renewables – and offshore wind will be a key piece in the country’s energy transition puzzle.

For more information on China’s offshore wind market and other emerging markets for offshore wind, download GWEC’s Global Offshore Wind Report 2020 here.