Global offshore wind investments are set to surge this decade with total capital expenditure for projects in the sector more than doubling to $102 billion in 2030, according to Rystad Energy.
The push to increase the number of projects and investments from $46bn in 2021 comes as nations globally seek to transition to cleaner sources of energy in a bid to meet their carbon neutrality targets, the Oslo-based consultancy said on Thursday.
“The offshore wind industry is set for substantial growth this decade, with over 265 gigawatts of operational capacity expected by 2030,” said Anubhav Venkatesh, offshore wind analyst with Rystad Energy.
“As the world moves towards a greener energy mix, investments in the offshore wind sector are set to soar and provide ample opportunities for suppliers to cash in.”
Demand for renewable energy resources has risen as countries look to tackle sustainable development challenges and meet their net-zero targets amid accelerating climate change and global warming.
The growth of renewable capacity is projected to pick up pace in the next five years, accounting for almost 95 per cent of the increase in global power capacity through 2026, according to the International Energy Agency.
Wind energy capacity trails only the solar photovoltaic industry in terms of the potential renewable energy expansion. Total offshore wind capacity is expected to more than triple by 2026, with global capacity additions set to hit 21 gigawatts, the Paris-based agency said in its April report.
By then, offshore wind additions are expected to account for one-fifth of the global wind market, which would be a "major milestone", the IEA said.
Over this decade, the main driver of growth will be the significant uptick in capacity installations in Europe that solidifies the region’s global leader in the offshore wind space, according to Rystad.
Capital expenditure in Europe in 2030 is forecast to more than triple to $53bn from 2021.
The Americas have been slow to enter the offshore wind market, but that is expected to change. The region is projected to spend $3.3bn this year, up from $700 million last year. Spending is expected to reach almost $15bn by 2030.
China, which has been a major player in the offshore wind market, will see a slowdown in investment by the end of this decade. The world's second-largest economy invested almost $25bn in 2021, double of what Europe spent that year, but it is forecast to gradually decline to a $7.7bn in 2030, mainly on the back of phasing out of feed-in tariffs in the country.
Rystad estimates that more 50 per cent of total capital expenditure this decade by project developers will go towards the manufacturing and installation of turbines and foundations — the two largest financial components of an offshore wind farm.
Europe currently leads the world with the largest number of installations, with more than 26 gigawatts of operational capacity, which represents more than 50 per cent of the global total.
“Europe is expected to have an installed base of over 57 gigawatts by 2026 when Danish giant Orsted is expected to remain the region’s leading offshore wind developer,” according to Rystad report.
“More than 8,500 turbines are expected to be operational in Europe by end-2026.”
The US is also set for a wave of project commissioning towards 2030, as it targets 30 gigawatts of operational offshore wind capacity, although the country is likely to fall short and install only around 21 gigawatts, Rystad said.