Global offshore wind to increase nearly six-fold over the next decade

Global offshore wind power capacity will increase almost six-fold over the coming decade with projects in as many as 18 countries by 2027 and local content becoming increasingly important as more countries adopt it.
Wood Mackenzie anticipates that as many as 18 countries will implement offshore wind power projects by 2027.

A new report from Wood Mackenzie said the growth in the number of countries adopting offshore wind means local content policies would become increasingly important for developers and suppliers as governments look to bolster local industry and create jobs.

Wood Mackenzie lead author and offshore wind analyst Soren Lassen said, “The influence of local content policies has been limited so far but will have an impact on more than 70% of future demand.”

The report said next-generation turbines will double average turbine ratings over the next decade and adversely affect demand for balance of plant services because fewer, larger turbines will be installed. Wood Mackenzie said this would particularly affect the market for foundations.

“The proliferation of demand in new markets will globalise the European supply chain and motivate the entry of new suppliers,” said Mr Lassen. “This is particularly true when supported by local content policies. Pressure in Europe will lead to consolidation across the supply chain on the continent – especially in the installation segment.”

The report also pointed out that the high growth rates in offshore wind makes it increasingly attractive for oil and gas companies looking to leverage offshore experience.

Wood Mackenzie said average capex for European offshore wind projects is falling quickly, mainly driven by increased competition in windfarm development, increasing turbine size and economies of scale. “Capex and opex in Europe will drop, on average, by 36% and 55%, respectively by 2027” said Wood Mackenzie report author and European offshore analyst, Shimeng Yang.

The levelised cost of energy (LCOE) in Europe is also projected to continue to fall at a fast pace. Wood Mackenzie expects the average LCOE across Europe for grid-connected projects to decline to €53.6/MWh (US$61.2/MWh) by 2027 from approximately €107/MWh in 2018.

Source: Owjonline