The Asia-Pacific region, excluding China, has emerged as one of the world's most dynamic offshore wind markets, with a clear hierarchy of development maturity taking shape. Taiwan, South Korea, and Japan lead the charge as established or maturing markets, followed by a wave of promising newcomers including Australia, the Philippines, and Vietnam. Each market is navigating its own unique path, balancing ambitious renewable energy targets against the complex realities of project execution in a capital-intensive industry.
Building momentum: The optimistic case
The sheer scale of project pipelines across the region tells an encouraging story. Governments are backing their climate commitments with concrete targets and evolving policy frameworks designed to accelerate deployment. Taiwan, despite recent challenges, has already installed approximately 3.04 GW of offshore wind capacity, ranking seventh globally and demonstrating what can be achieved with sustained policy commitment.
What makes the current moment particularly significant is how these maturing markets are learning from experience. Taiwan's upcoming auction round reflects genuine policy evolution, incorporating lessons learned from previous procurement exercises. The government's commitment to introduce greater flexibility around local content requirements addresses one of the most persistent pain points for international developers. This pragmatic adjustment recognises that rigid localisation mandates, however well-intentioned, can become obstacles rather than enablers when domestic supply chains are still developing.
South Korea is pursuing an even more fundamental restructuring of its approach. Recognising the complexity and risk that individual developers face when navigating offshore wind development, Korean policymakers are studying the Danish model of centralised project development. By having the state take a more active role in site identification, preliminary surveys, and grid connection planning, this approach could dramatically reduce developer risk and accelerate project timelines. The transmission system operator-led model, already proven in Germany and Denmark, offers the additional benefit of realising economies of scale in offshore grid infrastructure rather than leaving each project to pursue its own often inefficient connection solution.
The Philippines represents perhaps the most anticipated emerging market, with its first offshore wind auction scheduled for 2026 targeting 3300 MW of capacity. The Energy Regulatory Commission's recent decision to raise the ceiling price to ?11/kWh demonstrates a pragmatic recognition that first-wave projects need sufficient revenue certainty to attract investment. This inaugural auction, while limited in volume, will serve a vital purpose: testing every element of the Philippine offshore wind ecosystem, from permitting processes and grid readiness to port infrastructure and supply chain capabilities. The lessons learned from these initial projects will prove invaluable as the market scales.
Japan, meanwhile, is preparing to relaunch its offshore wind programme with a fundamentally different philosophy. Having witnessed project collapses attributed to overly aggressive pricing and unrealistic scheduling commitments, Japanese authorities are redesigning their auction framework to prioritise ‘sustainability, capability and viability’ over raw price competition. This mature recognition that the lowest bid is not always the best bid signals a market entering a more sophisticated phase of development.
Across the region, the fundamental drivers remain compelling. Offshore wind technology continues to improve rapidly, with larger turbines reducing the per-megawatt cost of foundations, installation, and maintenance while capturing more energy from higher wind speeds. The jobs creation potential is substantial, spanning manufacturing, construction, operations, and the broader supply chain. And as global installation velocity accelerates – with approximately 117 GW added worldwide in 2024 alone – the cost reductions that come from industrial scaling and learning-by-doing continue to accumulate.
The reality check: Persistent challenges
Yet for all this positive momentum, the offshore wind industry in APAC faces headwinds that cannot be ignored. The most immediate and universal challenge is financial. Offshore wind is extraordinarily capital-intensive, with projects typically financed with 70% debt. In this context, interest rates matter enormously. Industry analysis suggests that a 1% increase in interest rates raises the levelized cost of energy by approximately 10 – 15%.
The sensitivity to financing costs is amplified by the upfront nature of offshore wind expenditure. Unlike thermal generation where fuel costs dominate over time, offshore wind requires virtually all its investment before a single kilowatt-hour is generated. This makes the industry particularly vulnerable to monetary policy shifts beyond any developer's control.
Vietnam's recent policy direction presents a different but equally concerning picture. While the policy technically opens the market to foreign investors, the reality privileges local developers. The practical impact was demonstrated when German developer PNE, despite nearly six years of preparation, lost a major project to a newly created subsidiary of domestic conglomerate Vingroup. When established international players like Ørsted, Equinor, and Enel exit the market, it signals deeper structural concerns.
Infrastructure bottlenecks persist across the region. Philippine ports were not designed for offshore wind logistics, requiring costly upgrades. Grid readiness remains questionable even where projects themselves are well-advanced, with transmission planning often lagging generation development.
Public opposition, while less visible than in some Western markets, remains a potential obstacle. Community engagement, environmental impact assessment, and fisheries compensation all require careful attention if social licence for rapid deployment is to be maintained.
The path forward
The overarching conclusion is optimistic. The fundamental motivation across APAC remains strong, with governments committed to energy transition and developers eager to participate in what will be one of the century's great infrastructure build-outs. Technology continues to improve rapidly, and financing will flow to projects with appropriate regulatory frameworks and risk allocation.
But offshore wind admits no shortcuts. It is a uniquely complex undertaking where cutting corners inevitably leads to expensive consequences. The region's most successful markets will be those that maintain stable, ambitious plans while getting the balance right between competing priorities: financial incentives that attract investment without creating unsustainable subsidy burdens; local job creation that builds political support without imposing unworkable local content mandates; power purchase agreements that provide revenue certainty whether from utilities or corporate buyers.
There are many projects in the pipeline across APAC, and despite the challenges, things are moving in the right direction. The region that learns fastest from its missteps and builds most effectively on its successes will reap the rewards of a new industrial era.
For more news and technical articles from the global renewable industry, read the latest issue of Energy Global magazine.
Energy Global's Winter 2025 issue
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