The impact of new coronavirus on the development of offshore

Wang Liangliang, China director of the Global Wind Energy Council, said in response to a reporter’s question after its offshore wind power webinar that market research showed that affected by the new coronavirus epidemic, some land-based projects had been postponed for 2-3 months or even longer, but the impact of the epidemic on offshore projects was limited, with most projects only postponed for 1-2 months.

 

 

 

He believes that this phenomenon is due to the fact that offshore wind power projects are located in the ocean far away from densely populated areas, so they are less affected.

 

 

 

“Our findings are very clear,” he said. With the outbreak under control in China, the impact on all types of projects will be greatly reduced. “

 

 

 

“The main impact of the epidemic is on shore, not at sea,” he said. The impact of the virus on the land workforce is even more pronounced. “

 

 

 

Recently, it has been predicted that the new coronavirus epidemic will lead to a significant reduction of global wind energy projects in 2020. The potential impact on global facilities remains the most significant in China and the US, according to wood McKinsey, an analyst. In the US, the expiration of subsidies focused on wind energy is expected to push installed capacity to a record high. Wood McKinsey said that affected by the epidemic, installation speed in many countries will slow down, but China’s wind power supply chain may have a rapid recovery, which will help the development of China’s wind power industry.

 

 

 

However, the Global Wind Energy Council confirmed that even if wind power recovers, China still faces serious challenges to achieve its extremely high development goals for offshore and onshore wind power.

 

 

 

The policy driven “installation boom” continues, and developers need to ensure that the project will be connected to the grid by the end of 2021, so as to ensure that the projects approved by the end of 2018 will receive relatively generous feed in tariff subsidies, or that the projects approved in 2019 and 2020 will obtain the agreed auction price.

 

 

 

The Council said that China currently has more than 10 GW of offshore wind power projects under construction and more than 40 GW of approved projects.

 

 

 

China’s offshore wind power capacity development target has a very high demand for wind turbines and other materials, which means that Chinese wind turbine manufacturers and engineering contractors may not be able to meet the demand, and affected by the epidemic, the gap between the target and the reality will be growing.

 

 

 

All in all, OEMs’ wind turbine production capacity and contractors’ installation capacity mean that there is a huge gap between the target and the actual delivery capacity. China’s OEMs are unable to meet the target production speed and lack of installation vessels.

 

 

 

Several large wind turbine suppliers in China are concerned about whether the supply chain can achieve such a high target. It is said that the manufacturing of impeller, main bearing and other parts and related products such as offshore cables will become the bottleneck to limit the speed of grid connection of new installed capacity.

 

 

 

Wang Liangliang reiterated the necessity of reducing capital expenditure, mainly by optimizing the design and reducing the time required for wind turbine installation. In addition, operating and maintenance costs are still too high. “The offshore wind industry needs to invest more in technological innovation and process optimization,” he explained. The supply chain is under great pressure, and the average size of offshore wind turbines in China is smaller than in Europe. “

 

 

 

In January 2020, the national development and Reform Commission and the Ministry of Finance issued a document that from 2022, offshore wind power projects will no longer enjoy subsidies. But local governments in key provinces will continue to provide subsidies.

 

 

 

In its march 2020 announcement, the national development and Reform Commission said it would limit the number of projects approved in 2020 to prevent project concentration before the deadline.

 

 

 

Wang Liangliang said that after 2021, China’s wind power installation speed may slow down, but provinces such as Guangdong and Jiangsu that have set ambitious development goals for offshore wind power have realized the economic benefits brought by offshore wind power and their ability to create jobs and GDP, and will continue to provide support for the project.

 

 

 

Key provinces for offshore wind power development include Guangdong, Jiangsu, Fujian and Zhejiang. Key developers include Yangtze River Three Gorges group (10.2gw project planning), China Guangdong Nuclear Power (9.9gw), state power investment group (5.9gw), Huaneng Group (3.9gw), China Energy Group (2.5gw of Longyuan Power) and Guangdong power (2.2gw of Guangdong energy).

 

 

 

“By 2020, the focus of China’s wind power industry will be on the on-time delivery of existing projects rather than launching new ones,” he concluded