Bright future for sector predicted as country steps up tech commitment

China is fueling a remarkable expansion in the offshore wind industry that will play a major role in reducing global emissions, according to a new study.

Paris-based policy advisory organization the International Energy Agency, or IEA, says that China is on course to surpass the United Kingdom as the nation with the largest fleet of off shore wind farms by 2025.

China currently ranks third in the world by installed off shore wind capacity, according to the IEA, and its ambitious renewable energy plans will see its offshore sector expand rapidly in the coming years.

The IEA predicts that China's off-shore wind capacity will increase to 19 gigawatt in 2025, up from 4 GW in 2018, making the country the world leader in off shore power, ahead of both the UK and Germany, which currently have 8 GW and 6.5 GW of installed capacity respectively.

That Chinese figure is forecast to reach 107 GW by 2040, the study said, with the European Union contributing an additional 127 GW of offshore capacity by that year. By that year, the IEA estimates the offshore industry will have attracted a total of $1 trillion of cumulative investment.

IEA Executive Director Fatih Birol said this expansion in the sector will be driven by falling costs, supportive government policies and major technological progress, such as larger turbines and floating foundations.

"In the past decade, two major areas of technological innovation have been game-changers in the energy system by substantially driving down costs: the shale revolution and the rise of solar photovoltaics," said Birol. "And off shore wind has the potential to join their ranks in terms of steep cost reduction."

The IEA found that investment in off shore wind reached $20 billion in 2018, up from $8 billion in 2010. Last year, investment in offshore wind accounted for 6 percent of total investment in renewable energy.

"Off shore wind currently provides just 0.3 percent of global power generation, but its potential is vast," Birol said. "More and more of that potential is coming within reach, but much work remains to be done by governments and industry for it to become a mainstay of clean energy transitions."

In 2018, China added 1.6 GW of off shore wind capacity, more than any other country. The IEA said this growth was driven by the Chinese government's 13th Five-Year Plan (2016-20), which called for 5 GW of off shore wind capacity to be completed by 2020.

The IEA found that two Chinese power companies now rank among the top 10 developers in the industry, with a combined 7 percent of market share in terms of ownership. China Longyuan Power Group is now the largest producer of wind power across Asia, and China Three Gorges Corporation, or CTG-a State-owned company with roots in hydroelectric power-has become actively involved in the offshore wind industry. CTG now owns five off shore wind installations that are completed or under construction, with a combined capacity of 1.2 GW.

Chinese energy companies have also invested heavily in Europe's off shore sector. In 2017, energy company China Resources paid 555 million pounds ($714 million) for a 30 percent stake in the 402-milliwatt Dudgeon wind farm off the east coast of the English county of Norfolk, and this year, CTG subsidiary China Three Gorges Europe invested 35 million pounds in the Moray East off shore wind project in Scotland.