Accelerating the Uptake of Offshore Wind in Emerging Markets
Around a quarter of the world’s offshore wind potential is within the waters of developing countries. Therefore, accelerating its uptake in emerging markets has become essential in their transition from fossil fuels. In addition, offshore wind technologies could help developing countries transition to renewable energy sources by offering GW-scale electricity generation, with high-capacity factors close to coastal demand centers, making it well suited to facilitate the transition from fossil fuels and coal power plants. These factors, coupled with declining electricity costs and advancing technologies, facilitate the creation of highly skilled jobs and new offshore wind markets. However, despite these enabling factors, barriers such as high upfront development costs impede the rapid deployment of offshore wind in emerging markets. Removing these barriers would allow developing countries to leverage over 16,000 GW of untapped offshore wind potential in emerging markets. To achieve this, governments need to establish the necessary regulatory frameworks, de-risking mechanisms, project co-financing and associated infrastructure. Additionally, governments would need to assess the potential of offshore wind and create the enabling environment for the offshore wind market to develop, which is often complex and lengthy.
The objective of the joint ESMAP-IFC Offshore Wind Development Program is to accelerate the use of offshore wind in low- and middle-income countries. According to program estimates, there are over 71,000 GW of technically extractable offshore wind resources globally. The program aims to support the inclusion of offshore wind in energy sector strategies and the upstream work needed to build a pipeline of bankable projects to accelerate uptake in emerging markets. In addition, the Program’s central role and the existing demand from the private sector have catalyzed the establishment and growth of several markets delivering GWs of low-carbon generation. This could help phase out coal and mobilize private capital investment.
The Offshore Wind Development program supports both governments and industries in emerging markets. This combined approach enables the World Bank Group to provide clients with a comprehensive support package. The Program also cooperates with the Global Wind Energy Council (GWEC), which provides strong links with the international offshore wind industry and market insights in our client countries. The Program creates and disseminates knowledge to estimate the resource potential and opportunities across 62 emerging market countries. It also carries out country-level studies in Asia and the Pacific, Europe, and Latin America and the Caribbean. In addition, the team offers direct technical assistance to developing countries to support regulatory reform enacted by the government to establish necessary market conditions, auction processes, grid upgrades, and planning.
Between 2020 and 2021, the Offshore Wind Development Program planned and implemented the following interventions:
- Turkey. The Program prepared a road map to facilitate offshore wind delivery in Turkey. It also supports activities under the 2019 program for the European Union Instrument for Pre-Accession Assistance. The work will include undertaking offshore site surveys and auction design ahead of a future tender for offshore wind development.
- Grantmaking: The Offshore Wind Development program has provided grants to energy projects in Azerbaijan, Colombia, India, the Philippines, and Sri Lanka. Offshore wind roadmaps are underway in each country. In addition, the program established the scope for a roadmap for Brazil, and the project is awaiting grant funding. Initial discussions to support Romania, Tunisia, and Ukraine are ongoing in coordination with teams on the ground.
- Scoping studies: High-level studies are also underway in Fiji, St Lucia, and South Africa. These studies will inform the World Bank on the potential viability of offshore wind and whether complete roadmaps could be warranted under a country grant.
- Gender: The country roadmaps for Azerbaijan and the Philippines include activities to help maximize women’s employment and skills development. The work will consider the gender challenges in these markets. The roadmaps will make recommendations on improving gender equality through the creation of jobs in this new industry. These activities fulfill one of the Program’s intermediate outcome indicators.
- Knowledge-sharing: In September 2020, the program collaborated with the GWEC to produce an offshore wind virtual study tour. More than 400 delegates, including representatives from 24 client governments, attended the three-day event.