In recent years, the Asia Pacific wind energy market has taken huge strides forward. Developed nations such as the United States and European countries had a strong head start owing to government support, regulations, and the infrastructure to explore the potential of wind energy. During the course of the decade, emerging economies in Asia Pacific, particularly India and China, have made rapid progress and have expanded wind energy generation from 1.7GW in 2000 to 41GW in 2009.

New analysis from Frost & Sullivan, Asia Pacific Wind Energy Market - Investment Analysis, finds that the phenomenal growth of the market is due to the geographically favorable location, government support, recognition of potential, emphasis on renewable development, and energy security.

"Asia Pacific accounted for 41 GW capacity in 2009, almost doubling its capacity from 2008," says Frost & Sullivan Financial Analyst Sivapriya Ramakrishnan. "The tremendous wind potential is taking tangible shape due to China's explosive growth; growth in Chinese installations uplifted the global wind energy market."

Though domestic investment is overshadowing foreign investment to a large extent, the scope for foreign investment is likely to increase through the course of 2010 as new regulations encourage markets to open up. The Asia Pacific wind energy market was largely immune to the economic downturn, as government-aided institutions and local utilities provided most of the funding for wind energy projects.

Globally, there were some problems due to the economic slowdown; however, the stimulus packages (particularly those of the Chinese and Indian Governments) provided a shot of adrenalin for the renewable energy market.

Though the prospects for the market look upbeat, there are some challenges reining in market progression. About 30 percent of the wind energy generated does not reach the grid due to inefficiencies. The existing grid is not equipped to transport renewable energy. Unless the grid is upgraded, the generation of renewable energy can be seriously hampered.

Apart from this, ambiguity regarding legislation such as the Mandatory Renewable Energy Target (MRET), Generation-based incentives (GBI) and emissions trading has slowed market momentum. Solar energy is approaching large-scale commercialization and its attractiveness will eventually overshadow wind energy.

Offshore potential is large in most parts of Asia Pacific and Australia. However, the cost of developing offshore wind power is 2-3 times higher, creating a huge roadblock. There have been notable innovations in deepwater floating turbines and shallow-water turbines, and these advancements will make harnessing offshore potential a viable option.

India, China, Australia, Vietnam, and Thailand are heavily investing in high-voltage direct current (HVDC) systems to support their increasing power load. HVDC also supports renewables, as it enables transmission over longer distances (remote sites) and connects offshore wind power through efficient underwater cabling and lower power loss. Development of feasible energy storage technologies can greatly enhance the contribution of electricity generated by wind energy to the grid. Countries such as Japan are highly dependant on the commercialization of storage technologies to increase the contribution of renewables.

"Wind power capital costs are the lowest in Asia Pacific and it is expected to be reduce by another percent to 30 percent in the next decade," says Sivapriya. "In the event of the cost reduction and grid upgradation efforts, wind energy is expected to grow steadily."