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Global offshore wind market ‘set to grow six-fold by 2030’

Tue 09 Jan 2018 by David Foxwell

Global offshore wind market ‘set to grow six-fold by 2030’

Analysts at renewable energy finance specialists Bloomberg New Energy Finance have upped their forecast for growth in the global offshore wind industry. 

2017 was a spectacular year for the offshore wind industry. As I highlighted in my review of 2017, it was a year in which the cost of energy from offshore wind fell steeply, making it competitive with new-nuclear and gas.

It was also a year in which new, more powerful turbines continued to be brought to market, with still larger units in development; in which more and more countries became interested in building offshore windfarms; and in which the world’s first floating offshore windfarm entered service. 2017 also saw the world’s first zero-subsidy tender for offshore windfarms.

It was a year in which offshore wind’s ability to help regenerate manufacturing and create employment was finally recognised. As a result, 2018 will, it is anticipated, be the year in which UK offshore wind gets a ‘sector deal’ as part of the government’s industrial strategy, a kind of partnership between government and industry that, it is hoped, can boost productivity, employment, innovation and skills.

But was 2017 an isolated year, or an indication of an ongoing, upward trend?

Bloomberg New Energy Finance (BNEF) suggests strongly that it was the latter. It has updated its offshore wind market outlook, and now anticipates that the global offshore wind market is set to grow at a 16% compound annual rate from 2017 to 2030, reaching a cumulative capacity of 115 GW compared with 17.6 GW today.

BNEF anticipates that core markets in the UK, Germany, the Netherlands and China will drive installations, but in the next decade, Taiwan and the US will also become gigawatt markets. It expects annual installations to peak in 2027. After 2028, the expiry of offshore wind subsidies and a lack of regulatory transparency could result in a slowdown compared with the fast growth it expects in the next decade.

Overall, BNEF expects China to overtake UK and lead installations by 2022 and has increased its forecast for the US market by 85%, based on new state targets for renewable energy.

BNEF estimates that global newbuild asset finance reached a level of US$18.9Bn in 2017 – 32% lower than the US$27.6Bn secured in 2016. Despite the drop in total newbuild investment, investors are financing projects more cheaply. Average capex has fallen from US$4.1M per MW in 2016 to US$3.7M per MW in 2017.

 

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