China will be the new next growth centre of the offshore industry. A new report by QVARTZ provides a deep dive into the current status of the Chinese offshore wind sector.
In the past five years, offshore wind has grown to become the fastest growing cleantech technology in Northern Europe. Expectations for growth in the industry far exceed anything ever experienced before in the cleantech sector.
QVARTZ has worked in the offshore wind sector since 2004, having assisted some of the largest offshore wind players in Northern Europe with making the most of their offshore wind investments. We have helped government authorities define the right incentives, institutional investors make the right deals and, more importantly, crafted winning offshore wind strategies for some of the largest utilities. Our work has provided us with best-in-class insight into the dynamics and pitfalls of offshore wind and has paved the way for a unique understanding of tomorrow’s winning business models.
We foresee that the offshore wind sector will continue to develop and be one of the key engines for growth and economic prosperity in our region of the world. It is, however, a race against time as the enormous investments and governmental subsidies to fuel growth are pressured by the repercussions of the financial crisis, competing sources of energy as well as significant supply risks.
One scenario could be: rapid industrialisation which enables the industry to be competitive on free market terms, hence further expansion in the North Sea, in the Norwegian Sea and eventually near-shore sites in the Atlantic available for offshore wind. Another scenario could be: slowing down activities as the complexity costs derived by far-from-shore wind farms deteriorate the value of an improved CoE.
No matter which of these scenarios will play out – one question will arise: What are the opportunities for exporting the capabilities built up in Europe to new high-growth territories?
Offshore wind in China is only in the beginning of the life cycle, and based on the content of the report, it seems that the Chinese offshore sector aims to be the next growth centre of the industry while facing some of the similar issues – such as defining a process for consenting, approval and governance in general combined with an immature supply chain – a cocktail full of risks and potential returns!
China will be dedicated to meeting its ambitious targets and offering paths to future growth for the domestic players. But the development towards de-risking and lowering CoE in the Chinese offshore wind sector can be accelerated by introducing European technologies and capabilities.
So whether you are a utility player, a supply chain player or an investor in the European offshore wind sector, we are convinced that you will be challenged by this question; how can you exploit business opportunities in the Chinese offshore wind sector?
This paper offers you a snapshot of the Chinese offshore wind industry and our high-level assessment of the maturity level of the different categories in the value chain. We hope it will contribute to your current or upcoming strategic considerations in an emerging global offshore wind industry.