Annual offshore wind installations are expected to triple in 2028 from 10.8 GW in 2023. Offshore wind installations are expected to reach 66 GW by 2033, bringing the offshore share of new wind power installations from today’s 9 percent to at least 25 percent, according to the 2024 Global Offshore Wind Report from GWEC (Global Wind Energy Council).
The offshore wind industry has connected 11 GW of offshore wind to the grid in 2023, representing a 24 percent increase – the second-best year ever despite challenges in key markets.
INVESTMENT
The Bloomberg NEF statistics show that investment in the global offshore wind industry has reached $76.7 billion last year, despite rising costs forcing developers to delay or cancel projects.
Considering the strong growth expected in China, as well as burgeoning new Asian markets, Asia’s leading position in offshore wind installations is unlikely to be challenged in the next decade, but the outlook for offshore wind in Europe remains stable and optimistic.
Though GWEC Market Intelligence has downgraded the 2030 offshore wind installation outlook for the US from 25 GW (predicted in 2023) to 15 GW, North America will remain the third-largest offshore wind market by 2033, followed by the Pacific region and Latin America.
Since the release of the Global Offshore Wind Report 2023, progress has been made in every region of the world for floating wind. Following the latest global stocktake of floating wind development, however, GWEC Market Intelligence believes that the commercialisation of floating wind is unlikely to be achieved until the end of this decade (2029/2030).
GWEC has downgraded the global floating wind forecast and predict 8.5 GW to be built globally by 2030, 22 percent lower than last year’s projection.
Its near-term offshore wind market outlook (2024–2028), built using a bottom-up approach, is based on GWEC Market Intelligence’s global offshore wind project database, which covers projects currently under construction, global auction results and announced offshore wind tenders worldwide.
GWEC’s Global Offshore Wind Report 2024 reveals that a new wave of growth is expected from the second half of this decade, increasing the share of global new wind installations from today’s 9 percent to at least 25 percent by 2033. Offshore wind will be a key building block to achieve a 1.5°C pathway. To meet this ambition, nearly 380 GW of offshore wind needs to be built by 2030.
GROWTH
The report said 10.8 GW of new offshore wind capacity was added to the grid last year, bringing the total global offshore wind capacity to 75.2 GW by the end of 2023. New additions were 24 percent higher than the previous year, making 2023 the second-highest year in offshore wind history.
China led the world in annual offshore wind developments for the sixth year in a row with 6.3 GW added in 2023, demonstrating its capability to maintain stable growth in the new era of grid parity. Three other markets commissioned new offshore wind capacity in Asia last year: Taiwan (China, 692 MW), Japan (140 MW), and South Korea (4.2 MW).
Europe had a record year in 2023, with 3.8 GW of new offshore wind capacity from 11 wind farms commissioned across seven markets accounting for most of the new capacity. The Netherlands commissioned 1.9 GW of offshore wind capacity in 2023, making it the region’s largest market in terms of new additions, followed by the UK (833 MW), France (360 MW), Denmark (344 MW), Germany (257 MW), Norway (35 MW), and Spain (2 MW).
In North America, offshore wind turbines were installed at two utility-scale offshore wind projects in the US before the end of last year, but no offshore turbines were commissioned in 2023. By the end of 2023, 41 GW and 34 GW of offshore wind capacity were in operation in Asia and Europe respectively. The two regions combined made up 99.9 percent of total global offshore wind capacity.
Though Europe has lost its world-leading position to APAC in total installed offshore wind capacity, it remains the world’s largest market for floating wind and the technology hub for floating wind turbines and foundations.
Outside Europe and Asia, North America had 42 MW of offshore wind in operation at the end of last year, with all installations located in the US. Market Outlook 2023 was a turbulent year for the offshore wind industry on both sides of the Atlantic Ocean. Challenges such as inflation, increased capital costs, and supply chain constraints created uncertainty in the sector.
Considering the near-term challenges, GWEC Market Intelligence has downgraded its global offshore wind outlook for total additions in 2024–2028 by 10 percent compared with our 2023 projection. Despite the headwinds experienced in 2023, governments and developers remain committed to developing offshore wind and the global offshore wind market outlook in the medium term remains resolutely promising.
Baburajan Kizhakedath