In recent years, offshore wind power development and construction have shown signs of slowing down, with few new projects being approved and limited bidding by developers. As we approach the halfway mark of 2023, the sluggish state continues, raising concerns about an impending "downtime" for offshore wind power this year.
1. Bidding Season Slump and Challenges for Downstream Companies
Based on public bidding information, the scale of offshore wind power tenders has significantly reduced this year, both for turbine equipment and EPC (Engineering, Procurement, and Construction) contracts. Specifically, in Hainan, bids were conducted for turbine or partial construction stages of projects such as the 500,000-kilowatt offshore wind power project in the East CZ8 site, the Wan'an floating offshore wind power test project, and the Shenneng Hainan CZ2 offshore wind power demonstration project. In Shandong, bidding was carried out for turbine contracts in the 450MW offshore wind power project in Haiwei Peninsula South U site and the 400MW offshore wind power project in Shanneng Bozhong. Similarly, in Guangxi, bids were made for turbine contracts in offshore wind power demonstration projects in Fangchenggang and Qinzhou. Only sporadic projects in Liaoning, Fujian, Zhejiang, and Guangdong have initiated turbine and construction-related bidding.
"The significant reduction in tender scale is largely due to the substantial increase in installed capacity last year, with most previously approved projects already completed. While projects were being rushed for installation, there was simply no room for the development and approval of subsequent projects," said Qin Haiyan, Secretary-General of the Wind Energy Professional Committee of the China Renewable Energy Society. Offshore wind power projects typically follow a five-year planning cycle, where the first two years focus on planning and the last two years on tendering and construction peaks.
2. Pending Policy Adjustments and Slow Approval Processes
The pace of work has already slowed down at the approval stage, partly due to the unresolved "Double 30" policy adjustments. As per current regulations, offshore wind power projects are generally required to have a distance of no less than 10 kilometers from the shore and a water depth of no less than 10 meters for coastal areas with a mudflat width exceeding 10 kilometers. Rumors emerged in the industry since the second half of last year suggesting that the "Double 10" policy might be adjusted to "Double 30," meaning that new offshore wind power projects would need to be located at least 30 kilometers offshore or have a water depth exceeding 30 meters.
Although there is no conclusive decision on the policy adjustment and how it will be implemented, some local authorities have already halted the approval of offshore wind power development. "For example, the question remains whether meeting either the offshore distance or water depth criteria is sufficient or if both criteria must be met. Without a definitive conclusion, the approval process cannot proceed, and consequently, bidding cannot take place," revealed an industry insider. Qin Haiyan pointed out that future offshore wind power projects would mostly be developed in exclusive economic zones located at least 12 nautical miles offshore. However, since regulations governing the use of exclusive economic zones have not been established, local governments are adopting a cautious approach, leading to a reduction in recent bidding activities. Relevant national departments are currently studying related policies, and it is expected that corresponding regulations will be issued soon.
Tian Qingjun, Senior Vice President of Far East Holding Group, also highlighted that safety concerns for offshore wind power have grown in recent years. To prevent safety accidents, regulatory authorities are imposing increasingly stringent requirements, which also contribute to the slower approval pace. "The large-scale development of offshore wind power has attracted attention,