The offshore wind energy market involves generation of electricity through wind turbines installed in the ocean or sea. Offshore wind energy systems utilize advanced technologies that enhance the power generating capabilities of turbines and also reduce operational and maintenance costs. The offshore wind turbines are mounted on fixed or floating foundations in coastal waters or oceans and can generate power even during moderate wind speeds. Offshore wind power is increasingly being regarded as a viable renewable energy alternative with numerous advantages over onshore installations. The offshore winds are stronger and more uniform, allowing larger turbines to be installed for generating higher energy volumes. The turbines face lesser turbulence leading to increased capacity factors. In addition, offshore sites located far from residential populations avoid noise pollution issues associated with onshore installations.
Global offshore wind energy market is estimated to be valued at US$ 33 billion in 2024 and is expected to exhibit a CAGR of 12% over the forecast period 2024 to 2031.
Key Takeaways
- Key players operating in the Offshore Wind Energy Market Growth are Vestas Wind System A/S, Siemens Gamesa Renewable Energy, S.A., Goldwind, GE Renewable Energy, Envision Group and Ming Yang Smart Energy Group Co.
- Rapid industrialization and surging electricity demand across developing regions is fueling the adoption of renewable power sources including offshore wind energy. According to estimates, the global power consumption is set to rise by close to 50% by 2050.
- Technological advancements such as development of taller and larger wind turbine towers, use of advanced materials for turbine blades and nacelles, floating foundations, digital monitoring systems and remote connectivity solutions are improving the commercial viability of offshore wind projects. Larger turbines allow capturing of stronger and more consistent ocean winds leading to higher energy yields.
Market Trends
- Floating offshore wind technology is emerging as a key trend, allowing utilization of stronger winds further away from shore in deeper ocean waters. Developments in floating foundations enable addressing space constraints near shorelines. Major projects are ongoing in locations such as France, Portugal and Japan.
- Hybridization of offshore wind farms with other renewable energy sources such as solar PV and energy storage systems is gaining prominence. Colocation of diversified technologies boosts efficiency of energy generation and distribution throughout the day. Notable projects combining offshore wind with solar and batteries have been proposed in markets like Ireland, UK and Netherlands.
Market Opportunities
- Countries in Asia Pacific especially China, South Korea, Japan and Taiwan offer significant growth potential attributed to ambitious renewable targets and mega offshore wind projects in the pipeline. Several gigawatt capacity additions are expected over the next decade.
- North America is witnessing rising focus on clean energy independence with multiple offshore wind tenders and projects announced in states like New York, New Jersey, Maryland and Virginia. Federal incentives are supporting regional market expansion.
Impact of COVID-19 on Offshore Wind Energy Market Growth:
The outbreak of COVID-19 pandemic severely impacted the growth of offshore wind energy market globally. During the initial months of pandemic in 2020, most countries announced lockdowns which hampered the ongoing and planned offshore wind projects. This led to disruptions in supply chain as well as shortage of labour force at construction sites. Movement of equipments also got restricted due to travel bans implemented by governments. Project schedules faced delays due to non-availability of required manpower and raw materials. Financial investments into the sector decreased significantly as focus shifted to relieving pandemic impact.
However, post pandemic revival has boosted the market. Many countries announced Offshore Wind Energy Market Size and Trends as part of their green recovery packages to revive economies. This has reinitiated the execution of halted projects. Investments flowed in from governments as well as private players recognizing offshore wind's potential. Technological advancements also aided faster project completion. Streamlined supply chains and optimized operations helped address issues faced earlier. Significant capacity additions are expected in the coming years. Governments providing incentives and subsidies would further support market growth on a consistent path.
Europe accounts for the largest share of the offshore wind energy market currently in terms of value. Countries like UK, Germany, Belgium, Denmark and Netherlands have extensively invested and developed offshore capacities over the past decades. Favourable policies, technological expertise as well as proximity to offshore zones provide competitive edge. Asia Pacific region is poised to be the fastest growing market during the forecast period. China has ambitious targets for offshore installations. Other nations like Taiwan, Japan, South Korea and Vietnam are actively participating with large project pipelines.
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Ravina Pandya, Content Writer, has a strong foothold in the market research industry. She specializes in writing well-researched articles from different industries, including food and beverages, information and technology, healthcare, chemical and materials, etc. (https://www.linkedin.com/in/ravina-pandya-1a3984191)
