Ep63 Blowing strong: the surge of wind energy in Asia, ft Mark Hutchinson, Global Wind Energy Council (GWEC)

In this episode of the Asia Climate Finance Podcast, Joseph and Mark Hutchinson from the Global Wind Energy Council (GWEC) discuss the latest developments in the offshore wind industry, especially in Asia. Mark highlights GWEC's role in promoting wind energy through government-industry collaboration and expanding office presence in key Asian markets such as China, India, Vietnam, and the Philippines. He details the progress and challenges in specific countries, including Japan, South Korea, Vietnam, and the Philippines, and underscores the importance of policy stability and technological innovation in driving growth. The conversation also touches on the impact of geopolitical shifts, the rise of digital solutions, and the necessity of achieving net-zero targets. Despite recent challenges, Mark expresses optimism about the industry's future.

REF: GWEC's Global Wind Report 2025

ABOUT MARK: Mark is a Director in GWEC's Asia team, and a proven leader in the Energy Transition. Mark spent 16 years leading both Wood Mackenzie's and IHS Markit's (now S&P Global) APAC regional Gas & Power and Energy Transition consulting teams. He has worked with companies, governments and other stakeholders to enable the move to a carbon free future including advising on billions of dollars of renewable energy sector acquisitions, financings, IPOs and other types of capital raising. At GWEC Mark focuses on helping industry and governments transition to better enable the success of the wind industry, helping to meet various net zero carbon, energy security and other policy goals.

FEEDBACK: Email Host | HOST, PRODUCTION, ARTWORK: Joseph Jacobelli | MUSIC: Ep0-29 The Open Goldberg Variations, Kimiko Ishizaka Ep30-50 Orchestra Gli Armonici – Tomaso Albinoni, Op.07, Concerto 04 per archi in Sol - III. Allegro. | Ep51 – Brandenburg Concerto No. 4 in G, Movement I (Allegro), BWV 1049 Kevin MacLeod. Licensed under Creative Commons: By Attribution 4.0 License

Transcript

Ep63 Blowing strong: the surge of wind energy in Asia, ft Mark Hutchinson, Global Wind Energy Council (GWEC)

PLEASE NOTE: Automatically generated transcript may contain errors. For accuracy, only rely on the original recording.

Joseph Jacobelli: Hello, Mark. How are you? And thank you so much for doing this again. 

Mark Hutchinson: I'm good, Joseph. Thanks for, thanks for having me. I always enjoy having these conversations. 

Joseph Jacobelli: Well, I think it's very important to have an update once a year with what's going on with offshore wind for reasons that you know much better than I do.

But for those listeners who have not heard about who you work for, the Global Wind Energy Council, could you just tell us a little bit background

Mark Hutchinson: Sure. So the Global Wind Energy Council, or GWEC, is the Global Trade Association for the Wind Industry. We, we represent all the major OEMs globally, including the Chinese, Western, Indian ones. We represent many of them major developers as well as a whole series of supply chain companies, consultants, engineering firms, et cetera. All of those who are interested in seeing wind grow. 

Joseph Jacobelli: And what about specifically in Asia? Mark, given that you're based in Asia. 

Mark Hutchinson: Sure. So in, Asia, what we focus on, first of all, we have offices throughout Asia. We have offices in China, India, Vietnam, Philippines, Korea. We've just hired a country manager in Japan who will start next month. And our Asia headquarters is in Singapore, so we have pretty broad coverage across Asia. 

Joseph Jacobelli: It seems that, correct me if I'm wrong, but, since the last time we spoke, it seems that you've been expanding a little bit. 

Mark Hutchinson: Absolutely. We have definitely been expanding, so we're increasing office size in Philippines because there's some, a lot of excitement there.

There's an upcoming auction, later this year and we've been very instrumental in working with the government, which is our business model. We, we always engage. With government. So we bring together industry and government, to try to find solutions to advance wind, in particular offshore wind.

, We have offices in Hanoi and as I said, we've just hired a country manager in Korea and Japan because those are quite critical offshore wind markets that we, we think are really going to be growing. 

Joseph Jacobelli: Well, that's music to my ears because, if you guys are expanding, it means, the business is expanding. So it's basically what I've been arguing for a long time. The Global Wind Energy Council, GWEC, produces a report once a year, which we, we we've talked about over the last couple of years. Could you just very quickly talk about its purpose and its target audience? 

Mark Hutchinson: Sure. So what we, what we do is every year we publish two major reports.

One is the Global Wind Report or GWR. The other one is the Global Offshore Wind Report. And in these reports what we do is we try to provide some thought leadership about how we see the market going, what we see as the key challenges, what we see as the solutions. And we also provide both historical installations, as well as forecasts out for another five or so years. So 2024, just to give you a little bit of data, 2024 was the best year, ever, but only just by a, a very small margin, less than. A one gigawatt more than last year. Last year was something like 116.4 gigawatts. Sorry, 23 was 116.4. 24 was 117. So not particularly good growth. As a lot more is needed if, if we want to meet the net zero targets that so many countries and companies have. I think many of you would probably already know that the wind industry has struggled a bit. In the last few years, after the Ukraine war started, commodity prices spiked, that hit the industry pretty hard because, wind turbines have a lot of copper, a lot of steel, et cetera.

Logistics was also hit pretty hard during COVID, so there were some struggles. I would say though that most people in the industry would clearly see that we are on our way up. There are still some challenges, but the bottom was definitely hit, and we are definitely on our way up.

I mean, and just, to give you some examples. I mentioned the Philippine auction that's coming up. We're very excited about that. In Vietnam, we're working with the government to develop a one stage auction again, so the Vietnamese government wants to show that it's moving. A few months ago, the, the Japanese government announced some revisions to its auction program to better share some of the risks between the developers and the off takers. And again, a few months ago in Korea the Offshore Wind Special Act was passed, which clarifies a lot of the rules and regulations around permitting and, and other things related to offshore wind and creates a one stop shop. The idea of which is the government's going to help the industry to really focus on, on how to streamline some of the permitting processes, which are quiet, permitting is obviously a necessity. But it's also good to kind of make it as quick and easy as possible. And instead of going to say 27 different departments and ministries, you go to one that will then coordinate all those permits across the ministries. So a lot of positive steps are taking place in Asia. So we're very excited about that. 

Joseph Jacobelli: Maybe we can, talk a little bit about some of the things that you've mentioned with a little bit more detail. So narrowing the focus just on some key countries in the region.

I mean, we can't talk about every single country, otherwise this podcast would be several hours long. But perhaps the ones that we could focus on are couple in East Asia and a couple in Southeast Asia, if you don't mind.

In Japan, can you explain a little bit more about what's going on. Because it, I mean, it was a place with a lot of promise on the offshore wind side. But it seems that the number of gigawatts has not appeared in the same amount as original expectations. Is it just red tape?

Mark Hutchinson: Well, it's, it's a little bit of everything, to be honest. I think what happened early on in some of the auctions, and not just in Japan but in a lot of places around the world, is there was some initial optimism. And I think what that did is it caused some companies to bid probably slightly more aggressively than they, in retrospect had wished they had bid.

Joseph Jacobelli: And 

Mark Hutchinson: So we're kind of working through some of this backlog. But the rules in Japan, the rule change that I mentioned in Japan is, is specifically intended to do a, a little bit better risk sharing between the off takers and the developers. And this to kind of avoid the exact situation that happened, which is the, this slightly over optimistic bidding.

And then when you actually go to construct the projects finance and construct, it's no longer economic. So they've had to back out. And so what we do is I'll be in, I'll be in Tokyo next month. We're having industry, meeting with government, and the idea is we're going to try to have a workshop to go through exactly these issues, and how to solve them. And it's, it's one of these things you have to work together to find the solution. The industry can't point to government saying, fix this, and government can't point to industry say, fix this. We have to work collaboratively together to find a way forward. And, again, that's the way that we typically work.

Joseph Jacobelli: But historically, Japan, in my own perception, maybe I could be wrong, but there seemed to be a little bit more of a private, public partnership, discussion, cooperation, collaboration relative to some of the other countries were, maybe it's a little bit heavier weighted on the public side. Would you agree with that statement that there is a lot of kind of collaborative and cooperation.

Mark Hutchinson: Absolutely. Okay. Yeah. And every country's a little different and there's no right or wrong way of doing it. For example, in the Philippines I would say it's slightly more private sector led, but that, that's fine.

Fine with me. Mm-hmm. You know, what we do is, again, we work, very closely with governments. To, to tailor whatever advice we give. For example, when we help countries design an auction, we tailor it to exactly the kind of issues that you're talking about. 

Joseph Jacobelli: Right, right, right, right.

Then moving on to another east Asian location, South Korea. Could you tell us a little bit about the progress there and the outlook? 

Mark Hutchinson: Yeah, so there's a, there's a, there's an auction that's taking place later this month. The government has committed to holding at least annual auctions going forward, and the idea behind that is they want to create a continuous pipeline.

So for, I mean for a couple of reasons. One, that the developers know that if they bid in one auction, they don't have to wait, two years or whatever to participate in another. So if they don't succeed in one auction, they'll know that they'll have another one, six months or a year later.

So that's a signal to the developers that please invest in this country. And it's also a signal to the supply chain. To, you know, you can start building your factories. You can start localising your production. And so, it, this is what we always ask for is a, is a, is visibility into the pipeline because investors in any industry like to see certainty. And, if the governments can provide certainty, then the private sector will follow with investment. 

Joseph Jacobelli: Right. Like, you and I have always been saying, I mean, as long as you've got consistent and transparent policies then that’s, the kind of signal that the market needs.

Mark Hutchinson: Exactly. 

Joseph Jacobelli: Moving on to a couple of the Southeast Asian locations, what about the Philippines? I mean, there's been quite an, quite a lot happening in the Philippines actually over the past two or three years, which kind of surprised a lot of people. 

Mark Hutchinson: Yeah, Philippines. And I've said this, I've posted multiple times on LinkedIn, Philippines, there's going to be business school case studies, written. Positive case studies written about, the Philippine approach to renewables and in particular offshore wind.

When President Marcos came in a few years ago he took what had already been one auction and he committed to getting an offshore wind turbine spinning in the water producing power by 2028, which is the end of his term, and he has mobilised the government, he has enabled the Department of Energy, the Energy Regulatory Commission and many other departments to really move forward quickly. And as I mentioned, we work with government very closely. Our country manager there has been leading a technical working group, which is composed of developers, OEMs and others. And it's officially endorsed by the Energy Regulatory Commission with the Department of Energy as an observer. And literally two days ago the technical working groups submitted its recommendations for changes to the PPA, changes to the permitting and in great detail. And again, we worked with the ERC and with the Department of Energy to come up with these. So there's not any big surprises coming out of this and, we hope the government will, adopt most of the recommendations.

And if we do, we feel that it's quite likely that the, the auction they intend to hold later this year will be, will be successful. 

Joseph Jacobelli: Mm-hmm. Mm-hmm. That's great news.

And another important jurisdiction in Southeast Asia would be Vietnam. And obviously, absolutely, there's an enormous number of changes there with the kind of consolidations of some ministries and restructuring and so on and so forth.

Mark Hutchinson: Yes, absolutely. So Vietnam, of the Southeast Asian countries, Vietnam has the best wind resource without any question. Mm. There's already around 18, sorry. Around six gigawatts of onshore wind installed in including quite a bit of nearshore wind and by near shore. What it usually means is, within one kilometre or so of, of the shore.

One or two kilometres. It, they typically use onshore turbines but because they're next to the ocean, the wind, the wind resource tends to be quite good. And then if you go to true offshore, it's world class resources. Probably not quite like the North Sea, but pretty close.

And the government we would say the last year has, really accelerated their activity. There's a new electricity law, there are multiple decrees that are allow site exclusivity to be given so that that surveys can be done by the developers. And we really appreciate, the government's efforts.

I think a lot of the industry was frustrated over the last few years. By the government in Vietnam. Mm. because I think, there was some corruption investigations, which just slowed things down, but really in the last year mm-hmm. I think the government's been doing just an exceptional job and has been extremely engaged with us and the industry in general.

And so we're very, very pleased with what the government is doing there. 

Joseph Jacobelli: Now that we've talked about some kind of key jurisdictions around the region could we talk a little bit about, the general trend in terms of technologies. I mean, are we seeing kind of turbines getting bigger?

Are we seeing new, new technologies taking over, like, I don't know, floating wind? Or is that more kind of long-term kind of trend? What, what's going on in terms of, innovation and technology in the Asia Pacific region? 

Mark Hutchinson: Well you're right. So in the, the size argument, there are competing schools of thought.

There are some who think that let's make them as big as we possibly can. Mm-hmm. And I think the Chinese are kind of leading on that side, the Chinese OEMs. And then there are some others which are, I would say more the focus of the Western OEMs is, let's really build scale and let's industrialise.

And let's do mass production to drive down costs, right? So there's competing views and of course, the larger the, the turbine, the larger the ship that you need to install. And so if you continue to build bigger and bigger, bigger turbines, you need to continue to build bigger and bigger ships and mm-hmm.

So, there's no right or wrong answer to this. It's just a difference in philosophy. But yeah, you're seeing some very interesting in innovations. There's no, like aha gotcha kind of moment where all of a sudden there's this major breakthrough. It's really taking these huge machines make, and, and if you look at the, his, history for gas turbines and other things you see, they just get more and more efficient, as time goes on, and that's what you're seeing, with wind, you're seeing better low wind speed turbines so that you can go into places like Korea, for example. Their offshore wind resources are good, but they're not super good. And so you're going to get slightly different turbine and blade specifications there. And so what you're seeing is a lot more innovation that goes into matching a specific sort of combination of blades and turbines to match the conditions of the site. Mm-hmm. So you're seeing some interesting innovations that way. On the floating, floating is, I think taking longer than, than a lot of people had hoped.

Mm-hmm. I think some people have called floating the green hydrogen of wind. Mm. It's, again, these things are very large and industrial machines and so the innovations are slow. It's not like a high tech where you're, doubling, computing power over so many years.

There, it's, it's a much more incremental thing. And so they haven't really completely cracked the cost and scale mm-hmm part of floating. So I think it's just taking a little bit longer than hope, but to be clear, in places like the Philippines, Japan, and Taiwan, where the continental shelves are not that big to really take advantage of the wind resources there, we do need to get floating to the point where it is economically viable at a price that is politically acceptable. 

Joseph Jacobelli: Right. So that's more of a 2030s, 2040s kind of outlook rather than anything near term, I guess. A side question, I'm not sure if you know the answer to this one, but I always love to put you on the spot.

Is there much happening in terms of digital solutions helping offshore wind um, you know, absolutely. Yeah, because I mean, obviously the hot topic is AI but at the end of the day, AI is just an extension of kind of digital solutions and smart solutions. So yeah, do you have any thoughts on that?

Mark Hutchinson: Yeah, sure. But so what AI does is AI allows, a lot of the testing and modelling to be done without actually having to build, large, huge prototypes. That's definitely helping. And also what you're seeing in, in the area of O&M, predictive maintenance and other things like that is, is also coming along quite well.

So they are these large industrial machines, so again, you're not going to see this high-tech moment, but there you are seeing the application of technology all across the supply chain. 

Joseph Jacobelli: Mm-hmm. Mm-hmm. I mean, to some extent is a little bit like grids, right? I mean, grids at the end of the day are just a bunch of wires. Going from the power plant to the end user. But if you've got the smarts, you can make them more efficient. You can make them cheaper and so on and so forth. That's really what we're talking about, right? 

Mark Hutchinson: Yeah. Yeah. And, and again, maintenance and, and planning and, real time management of power flows, those sorts of things can definitely help from, from AI and, and other technical solutions.

Joseph Jacobelli: Great. One, one area, which I guess has been extremely highlighted over the last 3, 4, 5 years, as you mentioned earlier, is really the cost trends. Could you talk a little bit about that and how you see it going forward? 

Mark Hutchinson: Yeah. I think the challenge with costs is they're higher than they used to be. They're lower than they used to be at the same time. So, when you had all the commodity price spikes that we saw a few years ago, that hit the industry pretty hard. Prices have not yet gone down to, I would say, pre covid levels on, on a per megawatt basis. And I'm not sure that they will anytime soon.

The turbine manufacturers are being much more disciplined in how they approach the business. And you've seen this in the, I would say the recovery of the Western OEMs in particular. So they've turned profitable again because they're much more disciplined in their approach.

So I think that is a I look at it as a maturing aspect of the industry. I. Because if you think about it, offshore wind is still a relatively new industry. It really only hit major scale 10 or 15 years ago. Turbines have been spinning in the water for 30 years. But if you look, at the level of installations, it really was only in the 2010s that it really started to take off.

And so, if you think of a large industrial scale, high capital cost industry, that's very, very young. And so the industry is learning the lessons that the petrochemical, metals and mining, refining, industries learned 50, 80, a hundred years ago. So I think mm-hmm. It's, it's a maturing process.

And I think the companies that are surviving and coming out of it now are much stronger than they were before. You know, fool me once, shame on you, fool me twice, shame on me. They are definitely in the learning mode, and, and they're not going to get hit like they did get hit a few years ago.

Joseph Jacobelli: That's great. I mean, people forget that when we are talking about renewables it's an evolutionary process and it takes, many years to refine them. We should look at. Solar now versus solar. Say, even just 15 years ago, 20 years ago completely different ball game in terms of the evolution of the technologies and costs and all the rest.

I guess we can talk a little bit about your outlook for the sector Mark. Both kind of like short-term meaning, next one or two years as well as, a little bit more beyond that, like next 20 years. 

Mark Hutchinson: Sure. We are projecting growth pretty much across all markets. China has been dominating, still continues to dominate the industry, both from supply as well as installations.

I think our sort of business-as-usual forecast. Is relatively modest growth, which is not what we need. If you're familiar with the tripling pledge to triple renewable installations by 2030 to help meet, the net zero goals of so many countries and companies. The current trajectories are not going to get us there. If you look at renewables across the board, solar winds, biomass, hydro, whatever it is, it's, it's, it's not going to meet the net zero needs of the world. So, more needs to be done. And again, this is a lot of what we do. We work at a sort of bottom-up level. We work both at a top-down level, but a lot of the work that we do is also bottom up. Countries across Asia now have these big targets. I. And so you go from this, mm-hmm. This, mm-hmm. You know, this high level, hey, let's go to, six gigawatts by 2030 or 14 gigawatts by 2030, like Korea has.

And then you wake up the next day and you're like. Oh, wow. This is going to be hard. So what do we have to do? So we, we very methodically in each market we go through, okay, here's the bottlenecks. Here's sort of best practice. Here's the implementing rules and regulations Mm.

That, that are needed. Here's the laws that need to be amended or changed or passed. And it's a long process. But without it we have no chance of ever meeting sort of the net zero targets. But it's tiring. Sometimes it's a little bit frustrating, but it's also, when you do see some of the successes, it's extremely rewarding as well.

Joseph Jacobelli: Yeah. I mean. I guess two words come to mind. Number one, it's new, and number two, we're talking about a transition. So 

Mark Hutchinson: yeah, 

Joseph Jacobelli: no, no, no. Transition is particularly easy.

Mark Hutchinson: Yeah, this is, this is a huge, I mean, this is a mega trend. This, and mega trends don't, don't just happen with a snap of a finger.

It takes a lot of hard work by a lot of individuals and companies and governments to make it happen. So we have to, I'm a glass half full guy. Right. I always see opportunities and any, even when there's challenges, I'm like, Ooh, here, here's a way to fix this and make some money for the industry. So but yeah, not without its challenges. 

Joseph Jacobelli: Just a side question before I ask you for, your final re remarks, some key takeaways. And it's about the US market. I know that neither you nor I are geopolitical experts. And if anybody could predict geopolitics a year out, the person must be a genius or the person must have a particular lucky deal with God, or Lucky. Lucky or, or lucky. But, but with what's going on in the us which basically in a nutshell is not very pro renewables kind of attitude in the part of the new administration. You've got global capital from infrastructure funds, private equity firms, corporations, given, it's so much harder to go into the US right now or more uncertain to go into the US right now. Does that mean that there could be more capital that could flow into Europe and, and especially more capital could flow into Asia. Is that, is that a possibility over the longer term? 

Mark Hutchinson: Yeah, I mean, unfortunately, I think there's a huge, missed opportunity in the US given, given what's happened and it will have to be made up for later.

So that's probably all I'll say about that. Mm-hmm. So I was in, I was in Singapore this week and, I went to a number of events including the Global Financial Alliance for Net Zero hosted by Bloomberg. And I think the mood in the room was, the ship is not turning around, there's one direction that we're going and the job benefits of the transition, the economic development and I think increasingly the energy security benefits of the energy transition, just as an example, in the Philippines they import 90% of their energy just like Korea. Japan and Taiwan and, when coal prices a few years ago went up to $400 a ton, that got passed straight through to the, to the end users.

And countries don't want to subject their economies to that level of volatility. Mm-hmm. And, during the construction of renewable energy projects, there is some risk to volatility. But once they're built. The price is very predictable because there's no fuel, it's wind, solar.

Joseph Jacobelli: Mm-hmm. And 

Mark Hutchinson: In the Philippines, when a developer signs a 20-year PPA after winning the auction. That's the price for 20 years. And that's very predictable. And so you remove those elements of volatility, which I think increasingly are being recognised as a, as a real benefit for so many different economies around the world.

Joseph Jacobelli: The economic sustainability from that angle is extremely important.

That's great. Mark, any final remarks or key takeaways from our conversation? 

Mark Hutchinson: Yeah, I mean, I, the industry is on an upturn from, from a pretty rough bottom. There's one way to go, but up the energy transition is not turning around, the will globally is there to see it continue. So yeah, I mean, I, I look forward to our discussion next year because I think we will be in an even better place next year. 

Joseph Jacobelli: That's fantastic. Mark, once again, thank you so much for your time because I know you, you travel a lot and must be extremely exhausting. So thank you very, very much for today's participation in the Asia Climate Finance Podcast.

Mark Hutchinson: Thanks again for having me.