Vietnam continues to add more wind power

In Vietnam, we are thrilled to see non-stop good news for the industry over the past few weeks:  the additional 7GW of wind farm projects being approved by the government in the PDP 7; the passing of the DPPA rules; as well as the ongoing process for the FIT2 of wind energy in post 2021. Despite the industry’s anxiety, with the clock ticking and the window for projects qualifying for the current FIT closing, we do see that the government’s confidence in renewables and wind energy is stronger than ever.

The industry has a big stake and concerns over the FIT2 process, which GWEC is actively engaged to ensure the industry’s voice is heard clearly to secure the sustainability of the wind industry over the next two years. Every time there is a major policy shift, such as a FiT level, it is a nerve racking process. If done well, a suitable new tariff level can stimulate technology progression and achieve cost reduction effectively. If it is not done well, it can hinder the nascent industry and create a boom-bust cycle which won’t benefit either the national government or the industry. While we are still fighting and hoping for the best for the industry, the FiT changes have given the industry an opportunity to further prove itself on cost competitiveness, which goes back to our theme of resilience. As we’ve watched over the past few years, the cost competitiveness and improved technical reliability are the key drivers to increase government acceptance for our industry and are the core elements to define the industry’s resilience.

COVID-19 has affected communities globally, and has quickly eclipsed other recent epidemics in both size and scope. In the face of certain challenges and uncertain risks, for many companies, and for GWEC Asia, continued success no longer hinges on momentum. Rather, it rides on resilience – the ability to dynamically reinvent business models and strategies as circumstances change.

Similarly for the wind industry, technological advancement, regulatory upheavals, geopolitical shocks are just a few forces that require organisations to be resilient in their  efforts to respond, rebound and anticipate changes in an unpredictable world.

At GWEC Asia, despite the uncertainty of the past few months, we have remained resilient and we have had several key accomplishments that we would like to share.

Engagement in Taiwan Offshore Round 3 Auction Rules

We are in the midst of active dialogues with the Taiwanese government regarding the design of the Round 3 auction rules. We were approached by  industry players in Taiwan regarding their concerns over a strictly enforced local content requirement (LCR) that might backfire on the development of the offshore wind industry in this promising market, despite our understanding of the short-term benefits that LCRs brings about.

Unifying the voice of the wind industry, GWEC put together a case exemplifying how a balanced LCRs approach will be critical for the growth of Taiwan’s offshore industry  in terms of increased capacity and cost reduction.

Our message is loud and clear, protectionism will ultimately hurt national industry and cause a lack of competitiveness for the industry in the global market. It is hard for lots of governments to forgo the instinct of protecting its own national industry, especially in its nascent period. However, the case for the wind industry’s own development trajectory has proved that the more open the market is, the more benefits it can bring to a local market. The benefits are multifaceted: reduction of cost of energy, creation of more local jobs as well as a stronger and more competitive local industry in the global market.

The UK’s offshore sector is famous for its market openness. The country doesn’t have any of its own offshore OEM or developers, but its openness and the sheer volume of developments are attracting international players with investment, building up a local supply chain and creating jobs. Ultimately, this has helped to build a more competitive and globalised UK offshore supply chain, which now has a strong presence in offshore markets across the world.

China on the other hand, despite its leadership in the global and Asian energy transition, has not been as quick to adopt a policy of market openness. Its domestic industry finds it hard to penetrate into the international markets, with 40 per cent of the global market share, but only 1.25 per cent of this is outside China. These are the experiences and the lessons that Taiwan should learn on encouraging more openness in the market with a clear exit strategy of how to end the LCR.

So far, Taiwan has done extremely well in Asia in creating the most open offshore wind market, and this should continue to be the case going forward. For Taiwan, it has already become the regional hub for investment and offshore manufacturing. What it needs to do now is increase the local industry’s resilience, which is best achieved by market competition and openness.

The South East Asia Task Force celebrates its one year anniversary

Resilience is much needed at this time even for us, the small and new office of GWEC Asia. The month of June marks the one-year establishment of the South East Asia Task Force, which was launched last year at Vietnam Wind Power 2019. The past year has been a great journey for us, working closely with the industry to start active dialogue with national government in the SEA region. We’ve covered two markets in the first year, Vietnam and Thailand, and have seen impressive developments that give us confidence for the energy transition in the region. We saw wind targets for the first time introduced in Thailand’s PDP, and our messages on FIT extension being heard and taken into consideration by the Vietnamese government. We want to thank all the members for your support and engagements, and our partner organisations for your trust and collaborations. A big thanks to our team, especially Mark Hutchinson, Chair of the SEA Task Force and Naveen Balanchandran, Special Advisor to GWEC Asia, for your wholehearted hard work!

Despite the obstacles, GWEC continues to support the wind industry

COVID-19 has been the biggest surprise for all of us this year. It is shaking the global economy, consumer confidence and is causing every one of us to change our way of doing business, even changing our business models. The latter is especially true for GWEC Asia, where we have had to move our events to a virtual format and to push the boundaries of how to make virtual experiences as impactful as in-person events.

Our first virtual event, Vietnam Wind Power Virtual on the 9-10 June, was a huge success. With 800+ attendees from across the world attending our live sessions and using our networking platform to drive the development of Vietnam’s wind industry. We were also thrilled to see our exhibitors taking advantage of the virtual platform to conduct different technical workshops to reach an audience they might not have access to otherwise. Throughout the course of the event, over 1,000 people made meaningful business connections, all without leaving the comfort of their home or office!

As COVID-19 is still impacting many countries around the globe and experts have expressed concerns over a second wave, we are going to make some hard decisions in the next couple months about our events: Global Offshore Wind Summit Taiwan, Global Offshore Wind Summit Japan and Vietnam Wind Power. As advised by our local partners, we will postpone our events in Taiwan and Japan until 2021, but as we don’t want to lose momentum in these markets, we will be holding virtual events in October – you can watch this space for more information on these virtual events soon!

Crisis is always a good way to test resilience. The past few months has been a big test of our small office, which has been established for less than a year. However, throughout this crisis we have proven that we are able to stay effective and have become more resilient as an industry association. No matter what will happen, we are confident that the wind and renewable energy industry will grow stronger out of this crisis. So are we, the small Singapore office of GWEC. Let’s continue to stay together during these tough times,  and more importantly, work together to become even more resilient for the future.

Liming Qiao, Asia Director, GWEC