Offshore Wind market: Growing segment in the global Renewables market

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Introduction

The current global economic and geopolitical situation has forced many countries to balance their need to ensure secure energy supplies and, at the same time, allow them to meet climate targets to stem the worst effects of global warming. In 2022, consumers face the brunt of increasing fuel, gas, and power prices as well as associated inflation that has created a cost-of-living crisis. One of the possible ways to solve – or at least ameliorate – the current challenges including energy security is to accelerate transition away from fossil fuels towards renewables and the offshore wind market presents a key opportunity.

  • Offshore wind is the fastest growing market in terms of capacity in the latest years, representing c.7% of 2021 annual capacity additions in global wind energy as compared with 1% in 2009. According to a recent industry report from the Global Wind Energy Council (GWEC), the cumulative installations of offshore wind reached 55.9 GW, which represented c.60% growth year on year (34.8 GW in 2020) and, the recent capacity additions of 21.1 GW were delivered in 2021.
  • Currently, the sector is facing challenges in terms of supply chain issues and increases in raw materials costs which is widening the gap between the demand and supply in the offshore wind market.
  • Despite the current challenges, the prospects are advancing significantly for offshore wind as the cost of production is reducing rapidly through years of industrialisation and technological advancements, and component cost reductions. The global weighted average Levelised Cost of Energy (LCOE) is expected to reduce to USD 0.035 per kWh by 2050 and installed costs are expected to reduce to USD 1,720 per kW by 2050.

 

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OFFSHORE WIND MARKET: GROWING SEGMENT IN THE GLOBAL RENEWABLES MARKET

13 Oct 2022

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