The offshore wind energy market is projected to exhibit substantial growth, increasing from US$ 33.98 Bn in 2024 to an estimated US$ 70.38 Bn by 2031 this growth is anticipated to be driven by a notable CAGR of 11% during the period of 2024–2031.
Global Offshore Wind Energy Market Regional Insights:
Figure 1. Offshore Wind Energy Market Share (%), By Region, 2024
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Analyst’s Views:
Global offshore wind energy market is expected to experience strong growth in the near future. One of the key drivers for the market is the falling cost of offshore wind projects which has reduced significantly over the past decade. This has made offshore wind a more viable and cost competitive source of renewable energy as compared to other alternatives. Many countries in Europe and Asia Pacific have set ambitious renewable energy targets which include high quotas for offshore wind, thereby aiming to reduce carbon emissions. This will in turn propel investment and demand in the market. However, high upfront capital cost for offshore wind projects continues to act as a major barrier. Developing offshore wind farms also involve complex logistics and the risk associated with construction and installation in deep waters. Dependence on subsidies and regulatory policies of governments also introduce uncertainty. Moreover, intermittent power supply from offshore wind farms requires suitable energy storage solutions and grid stabilizing technologies to handle the variability.
Market Drivers:
Increasing global investments in renewable energy are likely to drive the offshore wind market: There has been a noticeable shift in the energy sector toward renewable and green energy due to factors, such as the need to reduce carbon emissions, depletion of fossil fuels, climatic change, and others. Various government policies are in place to support the initiative toward greener energy. Many multinational companies are taking initiatives to cut down their carbon footprint to contribute to a greener planet and sustainability. For instance, in 2021, Equinor (Norway) aims to cut its carbon emissions by half by 2050. A part of the plan is to develop its renewable energy businesses, particularly offshore wind, which may reach 6,000 megawatts in six years and 16,000 megawatts in 15 years.
Highly fragmented market dominated by major market players: The offshore wind energy market has been witnessing significant growth over the past few years due to increased policy support and commitments toward renewable energy adoption around the world. The market is highly fragmented with several small and large market players operating globally. While a handful of major developers have dominated the market, there has been a rise in new entrants from the oil and gas industry as well as other renewable energy sectors trying to tap into this high growth area.
The fragmented nature of the market has led to intense competition amongst market players. To gain a competitive advantage, developers are increasingly focusing on developing newer and advanced technologies to optimize offshore wind power generation and reduce costs. This has propelled heavy investments in research and development (R&D) of larger turbines, floating turbines, advanced foundation designs, and smart monitoring systems.
Market Opportunities:
Supportive renewable portfolio standards and carbon emission reduction targets: Supportive renewable portfolio standards and carbon emission reduction targets present a major opportunity for growth in the global offshore wind energy market. Many countries have set ambitious mandates to increase their usage of renewable sources and lower greenhouse gas emissions over the coming decade. This creates a very favorable policy environment for the offshore wind sector to thrive.
Europe in particular has been at the forefront of the offshore wind transition. Countries like Britain, Germany, Denmark, and the Netherlands have implemented carbon pricing mechanisms and require electricity providers to source a rising percentage of their power from renewables each year. As a result, Europe installed a record 6.1 GW of new offshore wind capacity in 2021 alone. This was 50% higher than the 2020 and brought Europe's total installed offshore wind to over 30 GW. Several large projects came online such as the 1.5 GW Hornsea 2 in the U.K. which is the world's largest offshore wind farm.
In Asia Pacific, China has enormous offshore wind potential along its long coastline and is striving to meet its carbon neutrality pledge by 2060 through tremendous renewable expansion. China added 3 GW of new offshore wind capacity 2022 and has set a target of 50 GW total by 2025. Governments across Asia Pacific like Vietnam and Taiwan are supporting pilot projects as they work towards more aggressive renewable goals this decade. Even countries like Japan and South Korea are ramping up plans for their inaugural multi-GW offshore wind installations according to economic development targets and carbon reduction commitments submitted under the Paris Agreement.
Emergence of offshore wind tenders and leasing rounds demand: The emergence of offshore wind tenders and leasing rounds presents a great opportunity for growth in the global offshore wind energy market. Many countries are increasingly focusing on harnessing the potential of offshore winds by facilitating new offshore wind projects through tenders and leasing of wind sites. This provides developers a standardized process to secure new development rights. For example, in 2021, the U.K. launched the largest ever renewable energy auction which included up to 9 GW of new offshore wind capacity. Germany too held its first tender for offshore wind development in over a decade and allocated areas that could accommodate 5 GW of new capacity.
The tenders and leasing rounds signal long term commitment of nations towards achieving their offshore wind and clean energy targets. According to the International Renewable Energy Agency (IRENA), over 500 GW of offshore wind could be installed globally by 2030 and over 3 terawatts by 2050. This massive scale up will be enabled through continuous tenders and leasing rounds by major markets.
Offshore Wind Energy Market Report Coverage
Report Coverage | Details | ||
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Base Year: | 2023 | Market Size in 2024: | US$ 33.98 Bn |
Historical Data for: | 2019 to 2023 | Forecast Period: | 2024 - 2031 |
Forecast Period 2024 to 2031 CAGR: | 11% | 2031 Value Projection: | US$ 70.38 Bn |
Geographies covered: |
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Segments covered: |
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Companies covered: |
MHI Vestas Offshore Wind, Siemens Gamesa Renewable Energy, S.A., J.J Cole Collections, Sinovel Wind Group Co., Ltd, Erndtebrücker Eisenwerk Gmbh & Co. Kg, Northland Power Inc., ABB Ltd., Ming Yang Smart Energy Group Limited, Adwen Gmbh, General Electric Company, A2SEA A/S, Nexans |
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Growth Drivers: |
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Restraints & Challenges: |
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Market Trends:
Gradual shift towards large wind turbines with higher capacity: Global offshore wind energy market has been witnessing a gradual shift towards by using large wind turbines with higher capacities in 2020. Developers and manufacturers have been installing turbines with greater blade lengths and rotational diameters to capture more wind. This allows them to generate more electricity per turbine and helps to reduce the levelled cost of energy. For example, the largest offshore wind turbines being installed have blade lengths over 100 meters and capacities around 0.010-0.012 GW each. The common turbines had ratings around 0.006 GW. This shift is due to advances in turbine technology that have made it feasible to manufacture and transport much taller towers and longer blades offshore. It has also been driven by commitments from various governments and companies to increase renewable energy usage. By opting for fewer but higher capacity turbines, project developers are able to reduce installation and cable laying costs on a per Giga Watt basis. This helps to improve project economics and lowers the risk profile for investors. It also decreases operational and maintenance costs over the lifetime of wind farms. For turbine manufacturers, the demand for these large turbines allows them to benefit from economies of scale in production. As the market matures further, we can expect an even stronger trend towards gigantic machines with ratings of 0.015 GW and beyond.
Increasing adoption of floating offshore wind technology: Increasing adoption of floating offshore wind technology is significantly influencing the global offshore wind energy market. Floating offshore wind is an emerging renewable technology that enables the installation of offshore wind turbines in deep waters, where bottom-fixed foundations are not feasible. This allows offshore wind farms to be set up further from the coast and in areas with stronger and steadier wind speeds. As a result, floating offshore wind farms have the potential to harness more energy. Several pilots and demo projects have already shown the technical and economic viability of floating wind technology.
Many large offshore wind markets are investing heavily in floating wind as the next stage of their offshore developments. According to the International Renewables Agency, floating offshore wind capacity worldwide will grow to over 25 GW by 2030. This is led by major European markets like France, Spain, Portugal, and Norway who have announced large commercial-scale projects. The U.K. Government has set a target of 1GW of floating wind by 2030. Several wind turbine makers are developing larger multi-GW turbines that are optimized for floating installations.
Market Restraints:
Recent Developments:
New Product launches:
Mergers and Acquisition:
Figure 2. Offshore Wind Energy Market Share (%), By Location, 2024
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Top Companies in the Global Offshore Wind Energy Market
Definition: The offshore wind power or offshore wind energy is the generation of electricity through wind farms in bodies of water, usually at sea. There is higher wind speeds offshore than on land, so offshore farms generate more electricity per amount of capacity installed.
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