The market for offshore wind energy is expected to grow at a CAGR of over 10% during the forecast period of 2020 – 2025. Major factors driving the market studied are the increasing cost-competitiveness, with an average LCOE of USD 50/MWh being within reach. Additionally, the government of existing offshore markets intends to increase their targets and volumes towards 2030 which would lead to a significant increase in offshore installation and the award of new projects. However, the movement of heavy and large equipment to the offshore location resulting in the high cost of the offshore wind power system is a major factor that is expected to restrain the market during the forecast period.
- The floating offshore wind is expected to create a scope for relishing the projects in deepwater where the high wind speed creates a much favorable environment for operation and thereby driving the offshore wind energy market.
- The emerging markets in Africa and South America offer a robust business opportunity for the wind power business as countries, including Brazil, South Africa, Chile, etc., are on the cusp of development, and there is an increased demand for electricity, which is expected to provide market opportunities for wind power development in the coming years. Moreover, the massive wind power potential, coupled with a decline in the cost of the same, is likely to provide widespread business opportunities to the market in near future.
- Europe is expected to have a significant share in the market during the forecast period.
Key Market Trends
Floating Structure to Dominate the Market
- The decreasing prices are helping wind power to increase sales, but the highly competitive environment is causing a decrease in the number of wind turbine manufacturers. The global transition from FITs to more-competitive mechanisms, such as auctions and tenders, has further intensified the intense price competition.
- Moreover, through technology innovation, turbine equipment manufacturers have been able to limit the rise in turbine cost (USD/kilowatt) and manage the decrease in mass (kilogram/kilowatt) to allow turbine growth to continue upward to at least 12 MW.
- The reduction in the weight has opened the prospects for the increase in the installation of floating type offshore wind turbines.
- The offshore wind resource with the highest potential is located in deep waters, where the installation of a fixed structure is not feasible. The Floating offshore foundations offer the potential for use of less foundation material, and on the other side greatly simplifies the installation and decommissioning. The floating foundation can also be attractive for mid-depth projects for the countries where the onshore installation has reached saturation.
Europe to Dominate the Market
- Europe region dominated the global market share for the net offshore wind power installation in 2019.
- The countries are trying to reduce the dependence on fossil fuels for energy generation by increasing the share of renewable in the energy generation mix. Furthermore, the current fleet of wind power plants in Europe is aging, and decommissioning is anticipated to increase significantly from 2020, which, in turn, is anticipated to drive investments for bridging the gap created by decommissioned projects.
- Therefore, the aforementioned factor is expected to provide an opportunity for the growth of wind energy market and the limited availability of land in turn paves a path for the growth of the offshore wind energy market.
The global offshore wind energy market is fragmented. The major companies include Siemens Gamesa Renewable Energy SA, MHI Vestas Offshore Wind, and Xinjiang Goldwind Science & Technology Co. Ltd (Goldwind).
Reasons to Purchase this report:
- The market estimate (ME) sheet in Excel format
- 3 months of analyst support