Off Shore Wind Market - Forecast(2024 - 2030)

Offshore Wind Market Overview

The global Offshore Wind market size is forecast to reach $68.4 billion by 2026, growing at a CAGR of 14.1% from 2021 to 2026. Generation of offshore wind power involves the installation of wind turbines, electrical infrastructures and others to support the power generation capabilities across shallow water as well as transitional water environments. In addition, the growing shift towards clean energy to reduce CO2 emissions along with increasing initiatives towards raising the wind energy power generation capacity have been attributing to the market growth of offshore wind. The increasing number of government initiatives to support wind power generation, rise in offshore wind energy projects, and growing establishment of offshore wind farms can drive the market forward in the long run.

Report Coverage

The report: “Offshore Wind Industry Outlook – Forecast (2021-2026)”, by IndustryARC covers an in-depth analysis of the following segments of the Offshore Wind industry.

By  Installation Type: Fixed Structure, Floating Structure
By Component: Turbines (Tower, Blades & Rotors, Others), Electrical Infrastructure, Others
By Location: Shallow Water (> 30 m depth), Transitional Water (30 to 60 m depth), Deep Water (Above 60 m depth)
By Power Rating: Upto 3 Megawatts, 3 to 5 Megawatts, Above 5 Megawatts
By End Users: Oil & Gas, Chemicals & Petrochemicals, Industrial Manufacturing, Aerospace & Defense, Others
By Geography: North America (U.S, Canada, Mexico), Europe (Germany, U.K, France, Italy, Spain, Others), APAC (China, Japan, South Korea, India, Australia, Others), South America (Brazil, Argentina, Others), RoW (Middle East, Africa)

Key Takeaways

Global Offshore Wind Market Value Share, By Region, 2020 (%)

Offshore Wind Market Segment Analysis- By Installation Type

Based on installation type, Floating structure segment is analyzed to grow with the highest CAGR of 9.5% in the global Offshore Wind market during the forecast period 2021-2026. Since the floating offshore wind power installations offer capabilities of using lesser foundation material, alongside simplifying installation as well as decommissioning operations, thereby gaining its wide popularity in the markets. Adoption of floating offshore wind power components have been significantly growing overtime, due to its benefits including expansion of viable area for wind energy development and reduced visibility from shore, which makes it easy to locate in areas having higher or steadier wind characteristics. This in turn, acts as a major factor driving its market growth, compared to traditional fixed mounted offshore wind systems. Growing investment towards floating offshore wind farms, increasing demand for floating structured offshore wind turbines, shift towards reducing installation costs for the end use industries and so on can be considered vital towards fuelling the market growth in the long run. According to Global Wind Energy Council, the floating offshore wind is expected to reach full commercialization by 2030 with at least 6 GW of installed capacity globally, as a part of improving efficiency and resilience, while reducing levelized cost of energy (LCOE). In September 2021, Shell Overseas Investment had revealed about the establishment of a joint venture with CoensHexicon, which will focus on the development as well as operation of a1.4GW floating offshore wind project in South Korea. Such factors are further set to boost the growth towards floating offshore wind market in the coming time.

Offshore Wind Market Segment Analysis- By End Users

Oil & Gas sector is analyzed to grow with the highest CAGR of 8.5% in the global offshore wind market during 2021-2026. With growing electricity demands within the sector, there is a rapid transition towards renewable energy sources like wind power to lower down the operational costs of the industry. Oil & gas activities involve exploration and extraction activities, which tend to raise the need for massive amounts of power capacity, aiding the market growth towards offshore wind power. In addition, rise in investments of oil & gas firms towards offshore wind projects, growing shift towards leveraging renewable energy for serving power generation requirement as well as reduce plant operation disruptions caused by rise in electricity consumption bills and others will drive the market forward in the long run. In August 2021, India’s largest oil & gas producer, ONGC had revealed about its plans on investing in electricity generation from wind within its vast offshore acreage, in order to support its renewable energy portfolio. With this, the company will be supporting the offshore wind projects through installation of offshore wind turbines under both shallow as well as deep sea locations. Such factors are set to boost the market growth of offshore wind technology within the oil & gas sector in the coming time.

Offshore Wind Market Segment Analysis- By Geography

Europe region had dominated the global offshore wind market in 2020, with a share of around 38%, and is also anticipated to have a significant growth during the forecast period 2021-2026. Factors including a growing number of offshore wind turbine installations as well as government initiatives or incentives towards increasing the total offshore wind energy production capacity have been attributing to the market growth across the region. Additionally, high investments on research & development activities, installation contracts and others by some key market vendors like Siemens Gamesa, Enercon GmbH and so on along with stringent mandates for the industries to cut down CO2 emissions can also drive the market forward in the long run. Moreover, growing government policies or legislation ensuring better conditions supporting the development of offshore wind energy along with investments in the establishment of offshore wind facilities are set to propel the market growth in the coming time. In October 2020, the UK government had revealed its plan on increasing the offshore wind power capacity from 30GW to 40GW by the year 2030. In March 2021, U.K Government announced about the 95 million pounds investment ($132 million) regarding the construction of two new offshore wind farms as a part of its goal of supporting the development of upto 9 GW of offshore wind energy projects each year. Such factors are set to aid the market growth of offshore wind in the coming time.

Offshore Wind Market Drivers

Growing government initiatives towards supporting renewable energy like wind power generation drives the market forward

Growing government initiatives towards supporting renewable energy like wind power generation act as one of the major factors boosting the growth of offshore wind market. Various government institutions, organizations, or regulating bodies have started focusing on supporting adoption of clean or renewable energy sources, for meeting emission reduction targets. Rise in government grants or funding towards offshore wind projects as well as the increasing shift of government towards raising the wind energy power generation capacity under renewable energy support can be considered as some of the major factors driving the market growth forward. According to IEA (International Energy Agency), there will be an acceleration of wind capacity additions upto 68 GW (about 7.3 GW for onshore) in 2021, from 65 GW annual wind capacity in 2020, which will be driven by delayed onshore projects becoming operational owing to the passing of regulations from key countries like Europe and U.S regarding flexibility for commissioning deadlines. In July 2021, the UK government's Department for Business, Energy & Industrial Strategy announced that offshore wind production will be booming in the long run, followed by more than £180 million of private investment. In addition, offshore wind manufacturers including SeAH Wind Ltd and Smulders Projects UK will be provided with an individual grant funding from the £160 Offshore Wind Manufacturing Investment Support Scheme. Such governmental initiatives are further set to drive the market growth towards offshore wind production in the long run.

Rising investments towards offshore wind energy projects positively impacts the market growth

Rising investments towards offshore wind energy projects can be considered as a major driver boosting the market growth of offshore wind. Various end-use industries including oil & gas, chemicals, and many others have started investing in offshore wind energy projects to support shift towards renewable energy as well as meet set targets for power generation through wind energy. In addition, increasing investment on offshore wind farms to support the transition towards renewable energy alternatives along with installation or decommissioning activities related to offshore wind turbines can further drive the market growth forward. In March 2021, RWE Renewables announced its plan of investing approximately £3billion ($4 billion) for the largest offshore project, 1.4 GW Sofia offshore wind farm in UK, expected to start in 2023. In September 2021, ESB had revealed about its proposal on introducing with a new phase of offshore wind development, as a part of ensuring country’s capability towards meeting 5GW capacity target by 2030. Such factors are further set to fuel the market demand towards offshore wind energy in the coming years.

Offshore Wind Market Challenges

High costs associated with installation, operation, maintenance or decommissioning hampers the market growth of offshore wind

High costs associated with installation, maintenance or decommissioning act as a major factor restraining the growth of offshore wind market. Installation of wind turbines in offshore locations make it highly susceptible to erosion, due to getting operated under harsh marine environments drive the need for repeated maintenance or servicing requirements, which raises the additional operational costs for an organization. In addition, the complexities related to installation, operation as well as transportation in offshore wind farms lead to higher expenses, impeding its market growth. The average price regarding the installation of 14 MW offshore wind turbine lies in the range of $0.5 to $ 1 million. Compared to other renewable technologies including solar, onshore wind, and so on, offshore wind power generation creates challenges associated with transmission infrastructures, grid interconnections, along with difficulties while identification of small technical errors. This in turn, raises the need for skilled and trained workforce capable of handling such complex issues faced during offshore power generation. Such factors have been significantly creating an adverse impact on its market growth.

Offshore Wind Market Landscape

Product launches, acquisitions, and R&D activities are key strategies adopted by players in the Offshore Wind Market. The Offshore Wind Market top 10 companies include:

1. Siemens Games Renewable Energy S.A
2. Vestas Wind Systems A/S
3. Enercon GmbH
4. Prysmian Group 
5. Nordex SE
6. Sinovel Wind Group Company
7. Nexans
8. GE Renewable Energy 
9. Adwen GmbH
10. Areva 

Acquisitions/Technology Launches/Partnerships

• In February 2021, Vestas announced the launch of an offshore wind turbine, named V236-15.0 MW, with capability of 80 GWh/year of wind energy production with largest swept area exceeding to 43,000 m2.
• In May 2020, Siemens Gamesa announced the launch of an offshore direct-drive turbine with capacity of 14 MW, incorporated with a 222 meter rotor.

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