This is an extract from a recent report “Mission Critical: Building the Asia Pacific Wind Energy Supply Chain for A 1.5°C World” by GWEC and ERM.
Introduction and APAC Market Outlook
COP28 strengthened the global drive to accelerate renewables, with agreements from 133 countries to double energy efficiency and triple renewables capacity by 2030. Action to increase clean energy generation globally could not be more urgent, and accelerated deployment of wind energy across Asia Pacific (APAC) countries is expected to play a critical role. The Global Wind Energy Council (GWEC) estimates that annual wind installation must increase three-fold this decade to meet net zero benchmarks, and this could be driven by the APAC region which already holds more than half (51 per cent) of the world’s total wind power installations by the end of 2023 and is expected to make up 61 per cent of new additions worldwide between 2024 and 2030. Although most new wind installation will be driven by China and India, the rest of APAC may want to consider following suit to meet national wind targets and provide the supply chain with the confidence needed to build capacity and fill the foreseen bottlenecks currently expected to slow the industry. Despite the potential in the region and ambition of individual countries to accelerate onshore and offshore wind deployment.
Onshore wind APAC market outlook to 2030
APAC’s total operational onshore wind (ONW) capacity will more than double to exceed 1 TW by 2030. Within the APAC region, current GWEC projections show that the cumulative installed onshore wind capacity will more than double to 1,084 GW by 2030, from 466 GW at the end of 2023. This growth is led primarily by China, which is expected to add over 500 GW of onshore wind by 2030 on top of the over 400 GW that is already operational. This forecasted additional capacity in China equates to over 80 per cent of the newbuild onshore wind capacity in this timeframe. India follows with an additional 45 GW by 2030, as the country has grown to be the fourth largest onshore wind market globally with a target to install 140 GW of wind by 2030. Australia and Vietnam are also expected to be significant contributors, installing 15 GW and 12 GW (including intertidal) in the same period, respectively. Annual installed capacity in the APAC region will steadily increase throughout the remainder of this decade from 79 GW in 2024 to 98 GW by 2030.
Source: GWEC
Offshore wind APAC market outlook to 2030
Offshore wind (OFW) development will increase this decade across major APAC markets. The period leading up to 2030 is an exciting time for the offshore wind industry in APAC, with many markets beyond China and Chinese Taiwan expected to make significant strides. Markets including Japan and South Korea have already held offshore wind auctions with the first awarded projects expected to come online from 2026. Australia has also awarded its first feasibility licences to allow developers to begin site investigations; the Philippines has announced plans to begin the bidding process for its first offtake auction tender for offshore wind by the end of 2024, and Vietnam is developing a process to support its first offshore wind projects, working towards the targets of 6 GW of offshore wind by 2030 and 70 – 91.5 GW by 2050. From 2024 to 2030, operational offshore wind capacity in APAC is forecasted to increase sixfold. Over 120 GW of new offshore wind capacity is forecasted to be installed throughout the APAC region between 2024 and 2030, with the cumulative regional total reaching 160 GW by 2030. As with onshore wind, China is the largest offshore wind market with over 130 GW of capacity expected to be operational by the end of the decade. Other key markets include South Korea with 6 GW and Japan with over 4 GW expected to be operational by 2030. The annual installed capacity is projected to increase rapidly over the coming years with the current 11 GW increasing to 21 GW by 2030.
Source: GWEC
APAC findings on the wind supply chain through to 2030
Onshore and offshore wind construction in APAC is expected to accelerate through 2030 requiring a robust, resilient supply chain to keep up with the forecasted regional demand. This report considers key onshore and offshore wind components, comparing the supply and demand levels for the target countries and the APAC region in isolation. Supply data was calculated from the bottom-up, based on desktop research of existing and planned supplier capacities. Demand data is based on GWEC’s future forecasting of onshore and offshore wind installations
Under this study’s assumption that APAC demand is met with supply from the region, the earliest bottlenecks are expected in 2029 and 2030 for gearboxes and blades with demand falling to within 10 per cent of the regional demand. This picture changes quickly when Chinese supply and demand is removed from the analysis, apart from onshore gearboxes, towers, and foundations. In 2024, China contributed 89 per cent of onshore wind demand and 91 per cent of offshore wind demand. Whilst this share is reduced to 81 per cent for onshore and 69 per cent for offshore by 2030 due to growth in other APAC markets, China will continue to commission and supply the majority of wind energy capacity in APAC, holding a dominant position across nearly the entire supply chain. The Indian supply chain is quite critical to meet onshore wind demand for components, and without China and India the rest of the APAC region would suffer extreme supply shortages across all main components, apart from towers, unless filled by the global market. China and India will play critical roles in the present and future supply chain; however, even with these two powerhouses, bottlenecks are expected unless our target markets ramp up. With increased regional cooperation, APAC could have a more diversified and efficient supply chain to derisk regional installation rollout as project installations increase.
Looking at a 2030 APAC wind supply chain and beyond
The rapid increase in demand for wind installations offers huge opportunities for suppliers looking to expand existing capacities, develop new capabilities and pivot related industries towards the wind industry. China and India will continue to play a key role in supplying APAC wind projects; however, for the wind industry to thrive, other APAC markets should also invest in their supply chains. The table below summarises the capabilities identified during the consultation phases, as well as non-wind industries that have the potential to transition their businesses to also supply the wind supply chain.
Key findings
In Onshore Nacelle Assembly, the impact of removing the supply of onshore nacelle assembly from both China and India indicates a strong regional dependency on these suppliers to meet the demand of APAC, if imports from other regions are not considered. Including supply from China and India, no bottlenecks are expected through to 2030; however, without supply from China and India, the region will face bottlenecks immediately through to 2030. There are existing onshore nacelle assembly capabilities in South Korea and capabilities in Vietnam that could be transitioned to support the region. However, other countries like Australia and the Philippines have been flagged as having the potential industries to partner with international OEMs to meet domestic needs. In Offshore Nacelle Assembly, minor bottlenecks for offshore nacelle assembly are expected in 2030 in the APAC region (excluding China). Bottlenecks are expected to become more significant from 2030, as demand increases. When including Chinese nacelle assembly, no bottlenecks are expected across APAC through to 2030. There are planned offshore nacelle assembly capabilities in Japan and South Korea, and capabilities that could be transitioned in Vietnam.
Key components
Gearboxes: In the APAC region, supply for onshore wind gearboxes is sufficient to meet demand through to 2030. When the supply and demand from China is removed, there are no bottlenecks. However, when the supply and demand from China and India are removed, there is a major bottleneck throughout the whole forecast period. For offshore wind, the APAC region is expected to face minor shortages of gearboxes towards the end of the decade. However, bottlenecks are significantly increased when supply from China is removed, causing major bottlenecks throughout the whole forecast period. Gearboxes are currently manufactured predominantly in China, India, Japan, and South Korea. Countries with an automotive industry like Indonesia and the Philippines could consider the potential for a transition to supply of gearboxes, but investors should be aware that the technical threshold and risk for gearbox production is high compared with other build-to-print components.
Generators: The supply of generators in APAC is concentrated in China for both onshore and offshore wind applications. No bottlenecks for offshore wind generators are expected when including Chinese suppliers in the analysis. Excluding China, the APAC region will start seeing gaps in generator supply starting in 2026 for onshore wind and immediately for offshore wind. When removing China and India from the scenario, bottlenecks for onshore generators are expected immediately. Generators can be provided by Vietnam for onshore applications, but there is still a large supply chain gap outside China. To improve diversification of supply Japan and Korea could also potentially transition electrical manufacturing toward increased supply of generators.
Blades: Within the APAC region, over 98 per cent of total blade production is in China and India. Starting in 2029 for onshore wind and immediately for offshore wind, the APAC region without China will start seeing gaps in blade supply. Blades are expected to continue to be supplied by India and China through to 2030; however, a new blade facility has been announced in Vietnam to support the Vietnamese market and growth in this region. Beyond 2030, we expect other countries to build capabilities, especially countries with large pipelines.
Power Converters: When sourcing from within the APAC region, projects are heavily reliant on Chinese power converters to meet on and offshore wind demand. Starting in 2025 for onshore wind and immediately for offshore wind, the APAC region excluding China will start seeing bottlenecks in power converter supply. Going forward, Vietnam has the potential to expand existing capabilities and increase exports of power converters across APAC. South Korea, Japan, the Philippines and Indonesia could leverage capabilities in electrical component manufacturing to transition towards the supply of power converters.
Towers: For both on and offshore wind, towers are not expected to be a bottleneck when considered regionally.
Castings: China leads casting manufacturing within APAC and is crucial to meeting the region’s on and offshore wind demand. Starting immediately for onshore wind and in 2025 for offshore wind, the APAC region without China will start seeing gaps in castings supply. India has a local casting supply chain, but capacity for the large-casted items used in offshore wind is missing at present. Other markets within APAC (Vietnam, the Philippines and Indonesia) could leverage existing capabilities in their automotive industries and expand capabilities to transition to supply castings for onshore and offshore wind across the region.
Offshore Enablers
Wind turbine installation vessels (WTIVs): No WTIV shortages are seen across the APAC region when assuming free movement of vessels between APAC countries. However, when excluding China, bottlenecks are seen from 2028. There could be earlier instances of shortages due to cabotage rules in Japan and South Korea, and increasing sizes of turbines making some vessels unsuitable. With vessels from Europe and Japan available to support, no bottleneck is expected for the Chinese Taiwan offshore wind market, but the situation is likely to change if those foreign WTIVs are required to support the growth in their home markets. In addition to WTIVs, South Korea, Singapore, the Philippines, Vietnam and Australia could leverage their shipbuilding industries to support the manufacturing of offshore wind service vessels.
Ports: The availability of offshore wind marshalling has been omitted from the supply and demand analysis of key wind components in the APAC region table above as this is best considered at a market-by-market level in APAC. In certain regions such as Northern Europe, there have been cases where marshalling ports are used to support construction in neighbouring countries, but this is unlikely to be a feasible solution in APAC where the geographical distances involved are much greater.
Access the report here
