In recent months after COP26, the ambition for offshore wind energy around the world has increased rapidly. In Australia, the Victoria State Government has set a target of 9 GW of offshore wind by 2030. This year's Global Offshore Wind Report describes how to achieve this.
Achieving ambitions to deploy offshore wind capacity will require a massive expansion of the supply chain. Thus, 2021 is already the fourth year that China is the world leader in the field of new offshore wind farms. By the end of 2021, Europe remains the largest regional market for offshore wind power plants in terms of the total number of installations.
PART ONE: SUPPLY CHAIN
Compared to onshore wind, the global supply chain behind offshore wind is more diverse. Continued growth of offshore wind requires a healthy supply chain capable of meeting the demands of a growing pipeline of projects, as well as supplying new markets around the world. Suppressed demand coming out of the global pandemic has created global pressure on supply chains across the global economy, including offshore wind.
On top of commodity price risks, logistics bottlenecks and rising freight costs are also impacting the global offshore wind supply chain. This wider offshore wind supply chain, of course, faces the same pressures on commodity prices and supply chain bottlenecks. Second, policymakers need to understand that the energy transition also requires economic sustainability in the offshore wind sector.
PART TWO: POLICY
Leasing' is a broad term that describes how seabed rights for offshore wind development and operation are entered into. During the formative stages of the offshore wind market, the cost of subsea rights for development was nominal. The burden of complex permitting procedures is greater for offshore wind projects than for many other renewable energy installations.
Everywhere, the toxic mix of complexity and uncertainty hurts the investment case for offshore wind development and ultimately hinders progress for the sector. Construction of the first commercial-scale offshore wind farm in US waters, Vineyard Wind I, began in November 2021 after a multi-year gestation process. The ever-increasing amounts of energy generated by offshore wind projects will need to be distributed over robust transmission networks.
PART THREE: SUSTAINABILITY OF THE INDUSTRY
The offshore wind industry is poised to become one of the most important custodians of our oceans in the coming years. The sustainability of offshore wind growth comes down to the industry supply chain and materials needed, and how both are managed and sourced. Building a sustainable supply chain for critical minerals The sustainability of the sourcing and processing of rare earth elements (REEs) is a particularly important issue for offshore wind energy.
The issue of material supply for offshore wind farms has a particular resonance for wires and cables. It is the duty of the offshore wind industry to ensure that the health of the environment is protected and even improved where possible. In the European Union, the North Sea Plan has reduced the cost of permits for offshore wind farms in the Netherlands by two-thirds.
PART FOUR: TECHNOLOGY
Four different propulsion technologies have been used in the offshore wind industry over the past three decades. According to the Chinese offshore wind turbine technology roadmap for the next five years (see page 45), GWEC Market. Considering the increasing pressure for offshore wind to achieve grid parity, GWEC Market Intelligence believes that the size of offshore wind turbines will continue to grow.
Offshore wind turbines are exposed to harsh environmental conditions throughout their lifetime, such as high humidity and corrosive salt. Corrosion risks and mitigation strategies for offshore wind turbine foundations, Kathy Riggs Larsen, Materials Performance. Placing electrolysers near offshore wind farms would enable the production of green hydrogen – an attractive proposition, especially for offshore projects in deep water.
Power-to-X offshore wind energy applications can also power electrolysers located on oil and gas platforms to produce green hydrogen using seawater. Whatever the pace of green hydrogen expansion, offshore wind will be a major source of energy for it. An important feature of offshore wind is the significant presence of several major European oil and gas companies.
There are now successfully operating offshore floating wind farms in the UK and Portugal, as well as a significant pipeline of projects in various markets around the globe. For these geographies to become centers of floating offshore wind activity depends on one critical factor: policy ambition. Governments must act as a catalyst for the successful deployment of offshore wind, which can bring.
Available subsidies and precedence of previous renewable projects affect the ease of financing for offshore wind projects.
MARKET STATUS 2021
GWNew offshore wind installations by market
MARKETS TO WATCH
The government is introducing an auction price ceiling in the Market Outlook for Taiwan's cumulative installed offshore wind capacity (MW). After zoning is settled, the next step is to hold the country's first offshore wind auction. Offshore floating wind is still in the early stages of development and cost remains high.
But the offshore wind sector has been slow to develop due to several factors discussed below. By the end of the decade, the country is expected to become East Asia's largest floating offshore wind farm market. A Marine Regulatory Authority (MARA)9 will be established in 2023 to assess and approve offshore wind farm projects.
MARKET OUTLOOK 2022-2031
Although Asia will replace Europe as the world's largest regional offshore wind market by cumulative. This is the second time the UK has increased the offshore wind target in the past two years. Germany used to be the world's second largest offshore wind market in total installations, but was.
The government is now working on amending the legislative framework to have up to 3.5 GW of additional offshore wind capacity in this zone. The next round of offshore wind licensing in new areas is expected to start in 2025. To unlock the potential of offshore wind and further reduce costs in the region, regional cooperation in supply chain development is an important goal.
China has connected almost 17 GW of new offshore wind farms to the grid in 2021, overtaking the UK as the world's number one offshore market in cumulative deployment. South Korea is the fourth largest offshore wind market in the region with a target of 12 GW of offshore wind by 2030. As in the case of South Korea, Japan has also made headlines over the past two years for its offshore wind farms.
GWEC Market Intelligence predicts that a total of 27.5 GW of offshore wind energy could be built in the US by the end of 2030, the same level as we predicted for this market a year ago. By the end of 2031, 28.8 GW of floating wind is likely to be installed globally, bringing the contribution to total offshore wind installations from the current 0.2% to 7.8%. To help unlock the global floating wind potential, GWEC launched its Floating Offshore Wind Task Force in July 2020.
Compound Annual Growth Rate., **Note: This drift wind forecast is already included in the GWEC Global Offshore Wind Forecast.
APPENDIX
GWEC Market Intelligence provides a range of insights and data-based analysis on the development of the global wind industry. The market intelligence team consists of several strong experts with years of industry experience around the world. For more than 40 years we have been a pioneer and leader in the wind industry, and today our team of more than 26,000 colleagues is working at the center of the global energy revolution to address the most important challenge of our generation: the climate crisis.
Ørsted is the only energy company in the world with a science-based net zero emissions target, as proven by the Science-Based Targets initiative (SBTi). Mainstream is one of the most successful developers of gigawatt-scale renewables platforms across onshore wind, offshore wind and solar power generation. The Global Leaders of the Global Wind Energy Council are an exclusive leadership group of high-level decision-makers and members who form the basis of the Association's Executive Committee, which directs the work program and plays a major role in shaping GWEC's priorities for its efforts in short-term and long-term strategies.
GE Renewable Energy harnesses the earth's most abundant resources – the power of the wind, the heat of the sun and the force of water; delivering green electrons to power the world's largest economies and most remote communities. With an innovative spirit and an entrepreneurial mindset, we engineer energy products, network solutions and digital services that create industry-leading value for our customers around the world. With over 170 years of history behind us, Iberdrola is now a global energy leader, the number one producer of wind energy and one of the largest electricity companies in the world in terms of market capitalization.
Together with our customers, Vestas' more than 29,000 employees bring the world sustainable energy solutions to power a bright future. We are looking for new ways to leverage our energy industry expertise, explore new energy opportunities and drive innovation in oil and gas around the world. Our ambition is to be the world's most carbon-efficient oil and gas producer, as well as to drive innovation in offshore wind and renewable energy.
From building the world's first floating wind farm to building the world's largest offshore wind farm, we are well on our way to delivering profitable growth in renewable energy, a leading company in the energy transition.
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