APAC Power Gen Development Set tor Growth

(ASIA) US$1.5 Trillion of Investment

Rising demand for power generation in the Asia-Pacific region could drive fresh growth in breakbulk activity over the next decade, according to industry analyst firm Wood Mackenzie.

The firm predicts that as much as US$1.5 trillion will be invested in new projects in the region over the decade to 2030, with renewables accounting for the lion’s share of new projects.

“Solar and wind represent 66 percent or US$1 trillion investment opportunity in Asia Pacific through 2030, while fossil fuels, mainly coal and gas, make up the remaining US$500 billion. Investments in renewables have overtaken fossil fuel power since 2013,” Wood Mackenzie states in a research note.


Despite the huge scale of investment, the outlook for power generation development is likely to be complex, as breakbulk operators adapt to the coming energy transition and a lack of subsidy cuts into margins.

“Generous government subsidies during the high-cost renewable era were key drivers of the previous growth period. In the next five years subsidies are being cut, grid constraints are increasing, and renewables investment is falling in key markets amidst more exposure to market forces. But even while some markets are hit hard, others develop rapidly,” said Alex Whitworth, research director at Wood Mackenzie.

This reorganization of power capacity is expected to create numerous opportunities for breakbulk operators, especially those geared up to cope with evolving project requirements, such as for larger, offshore turbines.

VRE Key for Power Markets

A key change for many operators serving the power sector will be rapid growth in markets with low variable renewable energy in generation, or VRE, as investors focus on shorter return on investment in the wake of Covid-19 slowdowns.

“During the transition decade to 2030 the VRE share of generation is a key metric that impacts power markets. Renewables investments are growing rapidly in regions with low VRE shares such as Southeast Asia, Northeast Asia and coastal China,” Wood Mackenzie said.

The firm estimates that the share of wind and solar in the Asia Pacific power generation will more than double to 17 percent by 2030, with more than 51 regional markets out of 81 modelled exceeding 10 percent VRE.
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