China's Offshore Wind Sector Surges Ahead, Nearly Tripling in One Year
China is leading the race for offshore wind, setting a new record year for turbine installations in 2021, according to the World Forum Offshore Wind (WFO)'s annual report.
The report shows that significant investments - driven by a global shift towards renewables - resulted in an additional 15.7 GW of installed offshore wind capacity worldwide.
China accounted for over two-thirds of the new capacity. The nation added 12.7 GW to its national grid, increasing its total installed offshore wind capacity to 19.7 GW.
“China is now the world’s largest offshore wind market by far with almost as much installed capacity as the UK and Germany combined,” reported WFO.
The significant increase in China was driven by the impending expiry of a tax subsidy (feed-in tariff) at the end of 2021. Project developers and investors opted to rush to commission projects before the deadline in order to lock in a premium offshore wind feed-in tariff of 0.75 – 0.85 RMB/kWh for 20 years, safeguarding them from price competition.
The expiry of the tariff could see the end of the bull run in the Chinese offshore wind market, with new installations averaging a more stately pace of 5 GW annually over the next few years.
By comparison, the UK has an installed capacity of 12.2 GW followed by Germany with 7.7 GW, the Netherlands with 3 GW, Denmark 2.3 GW and Belgium with 2.6 GW. Globally, installed offshore wind capacity reached 48.2 GW by the end of last year, 40 percent of which is now installed in China.
Of the 53 offshore wind projects that came on stream last year, 45 were in China, three in the UK, two in the Netherlands and one each in Denmark, Taiwan and Norway.
“The average size of a newly added offshore wind farm during 2021 was 296 MW compared to 347 MW in 2020, due to many 200 –300 MW projects in China,” noted the report.
The report shows that China’s offshore wind sector continues to grow rapidly with a total capacity of 8 GW currently under construction. The offshore wind farms under construction worldwide have a combined capacity of 17 GW.