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Global offshore wind industry set to grow rapidly – America to benefit

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This is the third article in a three-part series covering America’s offshore wind opportunity

Driven by global climate and carbon reduction goals, the offshore wind industry is expected to reach 234 GW by 2030, according to an August 2020 report by the Global Wind Energy Council (GWEC). The GWEC is an international trade association with 1,500+ members across 80 countries. The membership is made up of project developers, electricity providers, manufacturers, component suppliers, and other groups like research institutes and associations.  

The GWEC forecast is for offshore wind to grow at a 20.87% CAGR over the next decade. About 6 GW of these projects are expected to be floating offshore structures. The GWEC report cites about 35 GW of offshore wind capacity operating today. The United Kingdom (10.4 GW), Germany (7.7 GW), China (4.6 GW), Belgium (1.8 GW), and Denmark (1.7 GW) are home to the largest operating fleets. If all goes to plan, by 2030, according to the GWEC report, China will be home to about 58.8 GW of offshore wind capacity, with the UK (40.3 GW), the United States (22.6 GW), Germany (20.0 GW), and the Netherlands (11.4 GW) rounding out the top five countries. With all this offshore wind development planned, the supply chain capability across the globe will be tested. 

Global pipeline growing rapidly

Trade group Renewables UK, in a late October 2020 news release, indicated that the global pipeline for offshore projects was 197.4 GW, up nearly 50% from 134.7 GW they had been tracking through mid-January 2020. The Renewables UK pipeline includes projects under construction, consented, planned, in development, and some recent operational offshore wind farms. 

Earlier this month (November), the International Energy Agency (IEA) published their Renewables 2020 report suggesting that the U.S. offshore market is set to become one the largest offshore opportunities after 2022 and that global offshore wind will become an ever-increasing part of the overall wind power market through the next several years. By 2025, IEA forecasts offshore wind to account for about 20% of all wind power globally.  In order to make that happen, offshore projects will need more policy support, more investment in power grids, more corporate financial support, and more contract support from electricity off-takers. Considering IEA’s ambitious Sustainable Development Scenario (SDS) for offshore power generation, annual growth will need to grow at 20.1% CAGR over the next dozen years – moving from roughly 67-terawatt hours (TWh) in 2018, to over 600 TWh in 2030. The SDS forecast reflects the major transformation necessary to meet global climate goals that align with the Paris Agreement.

IEA Global offshore wind power generation, sustainable development scenario (SDS) forecast, 2005-2030, TWh

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Source: International Energy Agency (IEA), Renewables 2020 Analysis and Forecast, November 2020 

Development of the US offshore industry will benefit immensely from the lessons learned across the globe where offshore projects have already been built and are successfully generating power.  Having access to the ‘best of the best’ technology makes the soon to be burgeoning American offshore wind industry a surefire success story that will result in great jobs and plenty of investment opportunity.

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