A new report from the International Energy Agency (IEA) predicts the global offshore wind industry will “expand impressively” over the next two decades, driven by falling costs, supportive government policies and “some remarkable technological progress.”
The IEA said that global offshore wind capacity may increase 15-fold and attract around $1 trillion of cumulative investment by 2040.
Benefiting from that significantly could be the offshore oil and gas industry, the IEA said.
“Huge business opportunities exist for oil and gas sector companies to draw on their offshore expertise. An estimated 40 percent of the lifetime costs of an offshore wind project, including construction and maintenance, have significant synergies with the offshore oil and gas sector,” the IEA said.
“That translates into a market opportunity of US$400 billion or more in Europe and China over the next two decades.”
Offshore wind currently provides just 0.3 percent of global power generation, but its potential is vast, IEA executive director Fatih Birol said in a statement.
“More and more of that potential is coming within reach, but much work remains to be done by governments and industry for it to become a mainstay of clean energy transitions,” he said.
The huge promise of offshore wind is underscored by the development of floating turbines that could be deployed further out at sea, the IEA said.
“In theory, they could enable offshore wind to meet the entire electricity demand of several key electricity markets several times over, including Europe, the United States and Japan.”
Europe has pioneered offshore wind technology, and the region is positioned to be the powerhouse of its future development, the IEA said.
“Today, offshore wind capacity in the European Union stands at almost 20 gigawatts. Under current policy settings, that is set to rise to nearly 130 gigawatts by 2040. However, if the European Union reaches its carbon-neutrality aims, offshore wind capacity would jump to around 180 gigawatts by 2040 and become the region’s largest single source of electricity,” the IEA said.
China is also set to play a major role in offshore wind’s long-term growth, driven by efforts to reduce air pollution. “The technology is particularly attractive in China because offshore wind farms can be built near the major population centres spread around the east and south of the country,” the IEA said.
“By around 2025, China is likely to have the largest offshore wind fleet of any country, overtaking the United Kingdom. China’s offshore wind capacity is set to rise from 4 gigawatts today to 110 gigawatts by 2040. Policies designed to meet global sustainable energy goals could push that even higher to above 170 gigawatts.”
The IEA said that governments and regulators “can clear the path ahead for offshore wind’s development by providing the long-term vision that will encourage industry and investors to undertake the major investments required to develop offshore wind projects and link them to power grids on land.”
As well, “industry needs to continue the rapid development of the technology so that wind turbines keep growing in size and power capacity, which in turn delivers the major performance and cost reductions that enables offshore wind to become more competitive with gas-fired power and onshore wind.”