Deep-Sea Floating Wind Opportunity in China

floating wind

Floating wind’s future in China lies in the country’s demand to tap into wind resource in the deep sea. 

The Chinese market was, previously, deemed to provide limited opportunity for floating wind, as it owns a long stretching coastline with sizeable shallow water areas. Fixed bottomed turbines are still more competitive than floating ones when it comes to cost. 

However, the old wisdom is now under clear challenge, due to rapid changes in the market. 

Energy Iceberg: This article is a follow-up piece and the third part of our floating offshore wind outlook (free version). Check out Part-1 and 2 here.

New Trends to Support Floating Wind

The complexity of China’s subsea conditions still spurs some developers to look into the cost-effectiveness to adopt the floating option.  

A more decisive faster is the unexpected speed of development in the offshore wind market. In the past three years, energy players in China launched a heated project grabbing battle in the nearshore; in a similar frenzy style, the local governments set off development plans for their nearshore wind resource. 

According to data from official policymaking think tank CREEI, “by 2019, provincial governments have approved over 35GW OW projects, with 5.928GW installed.” 

The number of project in the pipeline would be more than 50GW if we also take into account the pre-approved units. 

Still, there is ample market space for nearshore, especially in provinces that have not formulated any OW plan yet– like Guangxi. But clearly, most of the low hanging fruits have been taken. 

As a result, the coastal provinces started to look into the further-away waters, with policy and projects “moving” away from shore and into the deep sea. 

The new trend, therefore, provides some momentum for floating technology to kick start in the market.  

Which Chinese Provinces Eye on Floating & Deep Sea 

Two provinces in China have listed floating wind or “deep and far sea” wind (a direct translation from the Chinese jargon “深远海风电”) in their industrial development policy released this year. More could follow suit. 

Shanghai: Limited Near-Shore space

Most recently, the Shanghai Development and Reform Commission (Shanghai DRC) announced a 2020 “Major Task Work Plan to Reduce Emission and Tackle Climate Change.” The plan listed two nearshore projects, Fengxian offshore wind farm and Lingang offshore wind farm, as one of the measures to promote green industries. 

The policy also promised to push forward “deep and far sea area offshore wind” demonstrations. 

Shanghai government is the first province that provided funding for floating wind R&D. The first floating demonstration in the region has taken off since 2016. The motivation to support renewable development in the deep sea may be related to the fact that the city has a limited nearshore marine space but a growing power demand.  

Guangdong: 57GW Deep-Water Sites

Guangdong province is the second one offering political and financial support for floating wind development. 

In May this year, the regional energy regulator unleashed a “New Energy Industries Fostering Action Plan” for the coming 14th Five-Year Plan period (2021-2025). The plan listed long-distance transmission technology in the deep sea as well as floating wind foundation R&D as one of the prioritized tasks. 

Back to 2018, the province introduced a 10-year offshore wind development plan, which already set the ambition to move to the “deep sea.” It has planned 9.85GW projects in “shallow water” sites and 57GW in the so-call “deep water sites.” The construction of the former is scheduled to take place between 2018-2022, while the latter between 2022-2030. 

The deep-water sites are below 50m but still provide some market opportunities for floating solutions, due to the challenging subsea formation in the region.

Shandong: Combining Wind and Deep Sea Aquaculture

Compared to its peers, the province is still in a nascent stage of offshore wind construction. However, it is relatively advanced in its policy planning of the sector. 

In 2018, Shandong’s energy regulator released a ten-year plan for the new energy sector, which already listed floating offshore turbine and deep-water wind farm’s design, construction, and operation as the key tasks in terms of technology development. 

The emphasis on deep-sea energy relates to Shandong’s priority to promote aqua farming in the deep sea. In that sense, floating technology could serve as the solution to combine the business cases of offshore wind and aquaculture. 

It is, therefore, not a surprise to two cities in regions begun to prepare for floating demonstrations.  

Notably, Guangdong province lately also show signs of looking into deep-sea floating wind combining with aqua farming. Both areas are known for their seafood production.   

Jiangsu (Nantong): New Marine Manufacturing 

Jiangsu government has yet to show a keen interest in delivering deep-sea or floating wind policy, most likely due to the sufficient shallow-water area. (Notably, the shallow depth of the region is one of the critical factors supporting the province to become the first province in China to promote wet-feet projects.) 

Nevertheless, some municipal governments in the region already show interest. 

Nantong city recently unveiled the ambition to forge an “offshore wind capital” by offering a series of industry-fostering measures between 2020-2022. 

The municipal government sets to “make breakthroughs” in “far see planning and demonstration project” by the end of 2022, besides other targets such as 10MW turbine development and 100-meter blade manufacturing. 

Nantong’s goal suggests new policy driver to develop floating wind, which could lead to new manufacturing capacity and economic growth. 

While the city is more advanced in building an offshore wind manufacturing hub, others in Jiangsu, Fujian, and Guangdong province could follow the footsteps. 

The Distance & Depth of China’s Offshore Wind 

While regional governments are leading the process, Beijing’s energy planners recently have shown interests in drafting new policy in the same direction. 

In fact, the State Oceanic Administration previously delivered a national ocean economic development plan that calls for actions in the deep sea renewable energy area.

The national energy planner has been silent on the subject so far. However, Energy Iceberg understands that the policymaking for national level deep-sea wind development plan is likely to happen soon. 

But how “far” and how “deep” does the wind market plan to go? 

Existing Offshore Wind Projects are “Near” and “Shallow”

Currently, the furthest project in China is the 300MW Dafeng OW wind farm (stage 1) developed by China Huaneng in the sea off Jiangsu. The distance away from shore is around 55 km, while the “deep sea” is usually defined as 70-80 km. Water depth of this project is only 3-10 meters. 

CTG’s Yangxi Shapa Project keeps the deepest depth record of 30 meters. And China General Nuclear’s Yangjiang Nanpeng Island project is estimated of 20-30 meters depth. Both are located in Guangdong waters and still far away from reaching the “deep-sea” definition (+50 meters). 

Energy Iceberg summarized the typical distance and water depths of new projects since 2019 in the chart above. 

New Projects are Moving Further but Still “Shallow”  

Several new projects that kicked off tenders recently are poised to re-write records soon. 

In terms of distance from shore

  • CTG’s Jiangsu Dafeng H8-2# (300MW) project: 72 km
  • CTG’s Jiangsu Rudong H6, H10 (800MW) projects: around 63 km 
  • Longyuan’s Jiangsu Dafeng H6: 64 km

These projects suggest that “deep sea” is getting near. However, the water depth of these wind farms, at Jiangsu territory, remains well below 20 meters. 

In terms of water depth: 

Both projects are off Fujian coast and still relatively shallow compared to those in the European market in terms of water depth. 

More info on the Chinese power and renewable developers China Three Gorges (CTG), China General Nuclear (CGN), China Huaneng and others.

Conclusion: 15th Five Year Plan the Golden Time? 

Clearly, despite companies and regional governments’ growing interesting in the floating wind and deep-sea development. Realistically speaking, the golden time for floating wind in China has yet to come. 

But to tap into the market opportunity, actions should start in the coming years. Domestic industry leaders appear to come to the consensus that during 2021-2025, China’s offshore wind will “focus on the near shore, with demonstrations taken place in the deep sea.” 

As of beyond 2025, deep-sea and “integrated energy solutions” would take centre stage.