The offshore wind energy market is projected to expand at a CAGR of about 8.2 % during the forecast period of 2024 to 2032. Offshore wind energy is the energy extracted from wind forces in a body of water, such as an ocean, that is transformed into electricity and distributed to onshore electrical networks. In 1991, the first offshore wind energy project was established in Denmark. Due to the higher wind velocities in offshore wind farms as compared to onshore wind farms, offshore wind energy may generate more power at a more consistent pace than onshore wind energy, and this could help boost the entire offshore wind turbine industry. The floating wind turbine is a type of offshore wind turbine consisting of a platform that supports the entire building. Offshore projects employing floating wind turbines are anticipated to aid in a variety of deep-water project development tasks.
Increasing Global Investments in Renewable Energy Are Anticipated to Propel the Offshore Wind Industry
Due to considerations such as the desire to minimize carbon emissions, depletion of fossil fuels, climate change, etc., there has been a significant movement in the energy sector toward renewable and green energy. There are a variety of government measures in place to promote the effort toward greener energy. Numerous global corporations are reducing their carbon footprint to contribute to a cleaner planet and greater sustainability. Equinor (Norway) wants to reduce its carbon emissions by 50 percent by 2050. The company intends to expand its renewable energy operations, particularly offshore wind, which could reach 6,000 megawatts in six years and 16,000 megawatts in fifteen years. The energy giant Total has also entered into a deal with SSE Renewables to acquire a 51 percent stake in the Seagreen 1 offshore wind farm project. It is expected that a total of 70 million euros would be invested in this project. According to researchers, offshore wind may generate USD 166 billion in new investments and USD 1.7 billion in new tax income for the US Treasury by 2023, as well as sustain USD 80,000 in annual employment by 2035.
Complexities Associated with Component Installation May Inhibit Industry Expansion
Offshore wind is among the most promising and environmentally benign energy-generating technologies. It has a high-capacity factor compared to similar technologies like as solar and onshore wind, but its prohibitive capital expenditures prevent its application. Since they run for decades in severe marine settings, offshore wind energy is vulnerable to erosion. Even the most favorable characteristics, such as strong wind speeds, can occasionally be detrimental to offshore wind energy. For example, wind turbines typically shut down when the wind speed surpasses 25 meters per second. As the size of offshore wind farms has grown, so have the issues associated with their construction, transportation, installation, and operation. Offshore wind farms have larger logistical challenges than onshore wind farms. Wind farms are typically positioned extremely far from the coast and are difficult to reach, especially during inclement weather. Therefore, even the slightest technological issues may be difficult and expensive to resolve. Other problematic aspects of the deployment of offshore wind power include resource characterization, grid connections and operation, and the building of transmission infrastructure, which are far less complicated in other technologies, such as solar and onshore wind. Consequently, the high capital expenditures and operational, maintenance, transportation, and logistical concerns constrain the global market.
Opportunities: Government and Business Initiatives to Minimise Carbon Emissions
The need for renewable energy will continue to increase due to the declining costs of technologies, the growing desire to minimize CO2 emissions, and the rising energy consumption in developing and underdeveloped nations. To meet the goals of the Paris Agreement, according to the International Renewable Energy Agency (IRENA), the share of renewables in annual global energy production must increase from 25% to 86% by 2050. To achieve this, the globe must invest an additional USD 110 trillion in the sector by 2050, compared to the USD 95 trillion expected to be invested by 2030. This modification will cause a discernible shift from fossil fuels to renewable energy sources. Bloomberg BNEF forecasts that USD 13.3 trillion will be invested in new power production assets between 2019 and 2050, with 15,145 GW of carbon-free plants likely to be constructed. According to the BNEF, wind, and solar energy will account for fifty percent of the world's electricity production by 2050.
In 2023, The Turbine Category Dominated the Market by Component
Component-wise, the turbine category commanded the biggest market share in 2023. The offshore wind turbine market category is subdivided into the nacelle, rotors and blades, and towers. The tower's turbines are primarily responsible for converting wind energy into electricity.
In 2023, Shallow Water Remains the Largest Contributor to The Wind Market in Terms of Location
In 2023, the shallow water market segment held the biggest market share by location. This sector comprises the majority of initiatives. This area is suggested for the creation of an offshore wind farm due to the existence of weather conditions that are relatively less challenging and the simplicity of maintenance. In shallow water, it is also easier to install the electrical infrastructure required to power a wind turbine. Due to the relatively lower possible wind speed in shallow water, turbines with a lower MW capacity are erected here.
Favorable Regulatory Mandates to Drive the Expansion of the > 0 To 30 M Depth Sector
In terms of depth, the offshore wind energy industry from > 0 to 30 m is anticipated to grow by about 9% by 2031, due to favorable legislative mandates in emerging economies. Moreover, substantial government efforts to promote the deployment of wind energy are also contributing to the segment's expansion. Europe, which has an abundance of sea basins, dominates the offshore wind investment market. The EU invested more than €41 billion ($43.5 billion) in new wind farms in 2021. The majority of the cash was used to finance 25 GW of new capacity, a new record.
Floating Foundations to Witness Significant Growth During the Forecast Period
As energy demand rises, major countries and corporations are adopting renewable energy sources, particularly wind energy, which may supply clean energy. The use of offshore wind energy with improved technologies drew significant investments from numerous nations and businesses. Furthermore, via technological innovation, turbine equipment makers have been able to restrict the increase in turbine cost (USD/kilowatt) and manage the decrease in turbine mass (kilograms/kilowatt), allowing turbine growth to continue beyond 12 MW. The weight reduction has increased the likelihood of a rise in the installation of floating-type offshore wind energy. Floating platforms contributed significantly to the total installed capacity of offshore wind energy, which reached 35 GW in 2020 due to technological advancements and cost reductions. In January 2023, Repower Renewable announced its intention to construct a 495 MW floating offshore wind farm in Italy with an anticipated EUR 1.5 billion investment. On floating foundations, 33 wind turbines with individual capacities of 15 MW are planned for the project. Additionally, in November 2021, the United Kingdom government announced 218 million dollars in funding for the development of floating offshore wind terminals in Scotland and Wales. The money is intended to generate 1 GW of renewable energy from offshore floating wind turbines by 2030. Due to the aforementioned factors, it is anticipated that the floating foundation type sector of the offshore wind energy market would have considerable expansion throughout the forecast period.
Europe Remains the Global Leader
Approximately 85% of the world's offshore wind farms are located in European waterways. The European region's governments, particularly in the North Sea region, have set an ambitious goal for the development of offshore wind farms in their separate national waters. Europe added 2,918 MW of offshore wind capacity in 2020. This increased capacity was provided to the grid by the Netherlands (1,493 MW), Belgium (706 MW), the United Kingdom (483 MW), Germany (219 MW), and Portugal (17 MW). The Kincardine floating offshore wind farm with a 50 MW capacity was commissioned in October 2021 off the coast of Aberdeenshire, Scotland. The project is anticipated to provide up to 218 GWh of electricity annually, enough to power approximately 55,000 Scottish homes. Eight new offshore wind projects obtained Final Investment Decision (FID) in 2020, with construction anticipated to commence in the following years. The total investment cost for the projects is USD 29.67 billion. Consequently, these recent developments are anticipated to make Europe an attractive business destination for offshore wind farm industry participants during the projection period.
Market Competitiveness to Intensify During the Forecast Period
The offshore wind energy industry is fragmented to a considerable degree. Vestas, Enercon GmbH, General Electric, Nordex S.E, Suzlon Energy Limited, Siemens Gamesa Renewable Energy S.A. And Other Notable Players. are among the leading firms. Globally, the offshore wind energy industry is very competitive. Numerous prominent entities are involved in the development and distribution of these turbines. Players in the offshore wind turbine industry are boosting their research and development efforts to build lightweight and cost-effective floating wind models. Energy research associations are also making attempts to innovate. With advances in offshore wind technology, offshore wind energy with bigger capacities are getting closer to being a reality, especially in China, the United States, and a few regions of Europe. China installed more than 2,3 gigawatts of offshore wind energy in 2019, while the United Kingdom installed 1.8 gigawatts. Future technological developments are anticipated to reduce the price of electricity generated by offshore winds. Future expansion of the offshore wind energy market will be driven by the increasing advantages of offshore wind energy over onshore wind energy. Vestas, Enercon GmbH, General Electric, Nordex S.E, Suzlon Energy Limited, Siemens Gamesa Renewable Energy S.A., and Other Notable Players are a few of the major companies in the offshore wind energy market.
Historical & Forecast Period
This study report represents analysis of each segment from 2022 to 2032 considering 2023 as the base year. Compounded Annual Growth Rate (CAGR) for each of the respective segments estimated for the forecast period of 2024 to 2032.
The current report comprises of quantitative market estimations for each micro market for every geographical region and qualitative market analysis such as micro and macro environment analysis, market trends, competitive intelligence, segment analysis, porters five force model, top winning strategies, top investment markets, emerging trends and technological analysis, case studies, strategic conclusions and recommendations and other key market insights.
Research Methodology
The complete research study was conducted in three phases, namely: secondary research, primary research, and expert panel review. key data point that enables the estimation of Offshore Wind Energy market are as follows:
Market forecast was performed through proprietary software that analyzes various qualitative and quantitative factors. Growth rate and CAGR were estimated through intensive secondary and primary research. Data triangulation across various data points provides accuracy across various analyzed market segments in the report. Application of both top down and bottom-up approach for validation of market estimation assures logical, methodical and mathematical consistency of the quantitative data.
| ATTRIBUTE | DETAILS |
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| Research Period | 2022-2032 |
| Base Year | 2023 |
| Forecast Period | 2024-2032 |
| Historical Year | 2022 |
| Unit | USD Million |
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Key questions answered in this report
