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52 WIND | Offshore wind - emerging markets Global installed offshore wind capacity capacity reached 14 4GW in in in 2016 after a a a a a a a a a further 2 2 2 2GW of capacity capacity was added over the the the course
of the the year with sustained technological advances and sharply declining costs of of offshore wind power combining to to account for this considerable growth in in the the the sector Europe remains at the the the forefront of of the the the global offshore wind sector with nearly 88% of of installations last year located in in in European waters while China also flexed its muscles in in in in in the the sector accounting for much of the the remaining 12% However looking outside of these two highly developed markets investment opportunities are beginning to arise across several emerging markets particularly in in Southeast Asia Tom Duncan a a a a a partner at Mayer Brown’s UK Construction & Engineering and International Arbitration group outlines the many considerations that o o o o shore wind investors must re re ect on before moving in in in to these rapidly emerging markets State incentives and tari s For any prospective investor in in o o o o o shore wind across any of the Far East’s emerging markets the rst and foremost question that needs to be be posed is: ‘will this project be be an economically viable investment?’
The starting point for answering this crucial question usually centres on on the types of incentives and tari s s o ered by the relevant nation state where a a a a potential project would be constructed “O shore wind is quite an expensive front- end cost and even though technology
is is steadily progressing it is is often not economically viable without incentives from the state ” says Duncan “That is normally done by some form of feed-in tari (FiT) e e e e e e ectively a a premium on the the the electricity price which they [the nation state] guarantee for the the duration of the the development ” State tari s s and incentives vary from country to country across the pool of emerging markets in Southeast Asia but nations
such as South Korea have been taking proactive steps towards creating a a a a a healthier environment for o o o o o shore wind investors during the last ve years In 2012 the South Korean government replaced its initial FiT which was too low to to support wind power development with the Renewable Portfolio Standard (RPS) In conjunction with various political commitments to developing the o o o o o shore wind industry the RPS has provided several incentives for o o o o shore wind investors all the while reducing associated costs Investors would also do well to to assess the 

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