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GWEC offshore wind installations forecast through 2030 rises 18% on year

09 September 2021 Keiron Greenhalgh

The Global Wind Energy Council (GWEC) raised its offshore wind installed capacity forecast through 2030 by 36 GW or 18% compared with a year earlier while also more than doubling its prediction for floating offshore wind installations over the same period.

In a report issued 9 September, GWEC said it expects 235 GW of new offshore wind capacity to boost the generation sector's cumulative total to 270 GW in 2030. The trade association's 2030 forecast for floating offshore wind capacity increased to 16.5 GW from 6.5 GW a year earlier, spurred by "ambitious government targets and major investors' development plans."

Last year was the second-best year for offshore wind in terms of new installations, with 6.1 GW installed globally, with nearly half that in Chinese waters (3 GW), GWEC's annual state of the industry report said.

GWEC Market Intelligence predicts annual installations will top 20 GW in 2026 and potentially reach 40 GW in 2030. Some 70% of the forecast 235-GW total will be installed in the latter half of the decade, it added.

The outlook to 2030 has grown even more promising over the past 12 months, it said, because:

  • Governments across the world continue to raise their ambition levels;
  • A sharp drop in offshore wind's levelized cost of energy—the average cost of production over a facility's lifetime—made it more competitive;
  • Progress continued in commercialization and industrialization for floating wind;
  • And, offshore wind increasingly played a unique role in facilitating cross-industry cooperation and decarbonization.

However, roadmaps that set out milestones to reach global carbon neutrality and limit global warming to 1.5 degrees Celsius above pre-industrial levels call for around 2 TW of offshore wind capacity by 2050, so the pace of installation must be even greater than GWEC is forecasting, it said.

Regional expectations

GWEC Market Intelligence believes Europe will maintain a double-digit growth rate in installations through 2030, as offshore wind has become the continent's most competitive electricity generation technology after onshore wind and solar PV facilities. New installations in Europe are likely to exceed 10 GW in 2026 and then potentially approach 20 GW by 2030, it said.

According to GWEC Market Intelligence's latest quarterly calculations, 2021 and 2022 are expected to be relatively slow years for Europe, with new installations around the same level as the previous four years, mainly due to a decline in German activity. However, the European offshore wind market is likely to bounce back in 2023 when utility-scale projects will also come online in new markets like France.

Europe will remain the largest regional offshore wind market in terms of total installations through 2030, the report found. But the gap in global market share between Europe and Asia is likely to narrow from 40% currently to just 7% in 2030.

New installations in Asia are likely to exceed 10 GW in 2026 and then reach nearly 15 GW by 2030, it said. In total, 63% of the predicted offshore wind newbuild for this region is to be built in the second half of the decade.

China's Asian market share is likely to drop from 76% in 2021 to 56% in 2026, according to GWEC Market Intelligence. This decline is expected to continue as the decade continues, reaching 48% as new capacity is expected online in markets such as India and the Philippines.

GWEC Market Intelligence predicts a total of 28.4 GW of offshore wind could be built in the US by 2030, some 25% above its forecast of a year ago. IHS Markit is not as optimistic, expecting US offshore wind installed capacity to reach 21 GW by 2030. The Biden administration wants to see 30 GW of offshore wind built by 2030.

And it is not just the US where IHS Markit has concerns about the ability to meet goals for the sector. While expecting a rapid ramp up in global offshore wind installations, IHS Markit is worried rapid advances in offshore wind technology are currently outpacing the infrastructure capacity needed to install them, it said in a report released in May.

IHS Markit currently expects global offshore wind installed capacity to total 241 GW in 2030.

Trade groups are also concerned about an inability to meet the goals. WindEurope said in April it was worried the EU may struggle to meet the ambitious targets the bloc has set itself, citing permitting bottlenecks in particular. The EU has a 60 GW goal for 2030 and a 300 GW of offshore wind target by 2050.

Floating offshore wind

Out of GWEC's revised 16.5-GW floating wind installations forecast by 2030, it expects only 7.1% or 1.2 GW built in the first half of the decade, it said.

The 2020 outlook was based primarily on the existing project pipeline, which it termed a "bottle-up approach," but a "top-down approach" was used this year that took into account "targets and development plans set up by national governments and major offshore wind investors."

By 2030, South Korea, Japan, Norway, France, and the UK are likely to be the top five floating markets, GWEC said, adding that it expects Europe to make up 68.2% of total installations in 2021-2025, followed by Asia (21.4%), and North America (10.4%). However, Asia's slice of the pie is likely to more than double in the second half of the decade. By 2030, Europe will have a 47% global market share, with Asia hot on its heels at 45%, GWEC said.

Getting to net-zero

If the International Renewable Energy Association's 2050 target of 2 TW of offshore wind in a net-zero world is to be met, GWEC Market Intelligence sees Asia being the home to nearly 40% of installations, followed by Europe on 32%.

However, the amount of offshore wind required in every region of the world to meet that target is "drastically higher than current targets, and miles ahead of current capacity," GWEC said. Only Europe has 2050 targets, it noted.

If GWEC's estimates of regional offshore wind share were to come to pass, 760 GW of offshore wind capacity must be delivered by Asia, however, current targets only stretch to 2040 and amount to 150 GW among regional offshore wind leaders, it said.

Posted 09 September 2021 by Keiron Greenhalgh, Editor, Climate & Sustainability Group, IHS Markit

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