Supply chain risks threaten APAC's wind market shows GWEC report

The APAC’s current supply chain setup is not sufficient to build enough wind projects to meet the region’s net zero targets, according to a new report from the Global Wind Energy Council (GWEC).

The report, Mission Critical: Building the Asia Pacific Wind Energy Supply Chain for a 1.5°C World, outlines how to drive systematic change to build a supply chain that meets regional and global demand for the wind installations required for Net Zero targets.

Despite record-breaking wind capacity growth in recent years, the effort to triple renewable energy by 2030 is falling short with wind specifically falling behind, according to GWEC.

The GWEC report emphasises the potential for clean, secure wind energy in the Asia Pacific (APAC) market is huge, with the APAC region expected to make up 61% of the new capacity built worldwide between 2024 and 2030.

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Total onshore wind capacity in APAC could double to 1,084GW within the decade, with another 122GW of potential capacity from offshore wind by 2030. As the industry looks to get wind energy back on the front foot and ramp up the pace of new capacity installations, the APAC region has an important role in delivering the new capacity that ensures wind energy fulfils its key role in delivering net zero.

GWEC CEO Benjamin Backwell said, “The APAC region is the world’s largest wind market, but the supply chain concentration risk is high. Excluding China, the region is unlikely to meet the level of wind power installation required to meet climate targets. Key to closing the gap is political commitment and cooperation which scales up the local supply chain to unlock the growth potential in the APAC region.

“Action on the supply chain is action to increase renewable energy generation – and nothing is more urgent than accelerating wind power installations across the APAC region to meet both net zero targets and 3xRenewables ambitions. Wind energy means clean and secure energy, with additional jobs and new industry. This report provides the foundation for governments, key partners, and stakeholders to work together to build a supply chain for a 1.5°C world and unlock the enormous benefits of the energy transition to the APAC region.”

The report was co-authored by ERM. ERM partner Breanne Gellatly also commented on the findings: “There are challenges to overcome but considering the breadth and depth of capabilities across the region we believe that with urgent action, APAC’s supply chain can be scaled to meet this decade’s net zero targets and 3xRenewables ambitions.

“Through our extensive consultations it was apparent that there is a strong appetite from this region for companies to grow in the wind sector – either through scaling up or transitioning adjacent operations to wind e.g., mining, shipbuilding, automotive, and electronics. To achieve this growth, suppliers will need to make significant investments that require credible markets, committed pipelines and access to a regional marketplace. In parallel, APAC countries will need to play a complementary role to ensure frameworks are in place that support scale and cost efficiencies.

“The investments made now to create a sustainable and resilient regional supply chain will serve APAC beyond their 2030 targets and set the stage for continued growth over the next decade.”

The report makes the following recommendations to build a reliable, competitive, and resilient supply chain in APAC:

• Regional supply chain scale-up is needed urgently if APAC is to meet 2030 targeted wind installations;
• Existing trade agreements can be leveraged to scale up supply chains;
• Credible markets and committed pipelines are needed to trigger supply chain investments;
• Public support for supply chain capacity building outside of auctions could boost resilience and sustainability while reducing price pressure on developers, especially for near-term projects;
• Transition industries could be encouraged to expand or pivot operations to fill wind industry supply chain bottlenecks;
• International collaboration to scale up the floating wind supply chain could start already now;
• The wind industry must continue to standardise and industrialise.