Global Offshore Wind Market – Insights
Offshore wind provides the electrical energy on the continental shelf to harvest the wind energy. Wind speed is generally stronger and steady at the offshores than on the land. Offshore wind turbines are also located near to coastal areas eliminating the need for new overland transmission lines. Slight increase in speed of wind can generate a significantly greater amount of electricity, as the potential energy of wind is directly proportional to the cube of wind speed. For instance, the turbine at a site with average wind speed 16 miles per hour (mph) would produce more than around 50% electricity than 14 mph average speed of the same turbine.
Key factors influencing growth in offshore wind market are high investments in renewable sources of energy and favorable government policies. For instance, the National Ocean Industries Association was U.S’s first offshore wind farm in 2017. Moreover, increasing concern toward the non-renewable source of energy such as fossil fuel, awareness for their harmful effects of greenhouse gases such as carbon dioxide, and rising demand for electricity will help in increasing the growth of offshore wind market.
In 2016, Europe was the leading region in the offshore wind market with a market share of 56.99% and is expected to reach US$ 39.39 billion by 2025 with a CAGR of 12.9%. The main reason for the expansion of offshore wind market in Europe is owing to its favorable weather for the offshore wind market. According to Global Wind Energy Council (GWEC), 2016, out of all the offshore wind installations, around 88% were located in costal waters of 10 European economies and remaining installations (around 12%) was located in China, Japan, Taiwan, South Korea, and the U.S.
According to Bureau of Ocean Energy Management, roughly 50% population in the U.S lives near coastal areas. Also in coastal areas, land-based renewable sources are limited and energy cost and demand are high. Offshore wind energy has potential to supply large quantity of renewable energy to the U.S coastal cities such as Los Angeles, New York City, and Boston.
Among the three location by the depth of offshore wind turbines, shallow water offshore wind turbines dominated the market, due to cost effectiveness and easy maintenance. Due to favorable weather conditions in Europe, shallow water wind turbines are majorly installed in the region. On the basis of components, turbines components are the major contributor to the growth of offshore wind market. Different components of turbines such as, tower, rotator, blade, and nacelle have the highest share of the capital cost. Larger the turbine, more energy it produces when it rotates.
Figure 1. Global Offshore Wind Market Share, By Region, 2016
Source: Coherent Market Insights 2017
Europe led the offshore wind market, which is expected to lead the market and valued at US$ 13.27 billion in 2016. The region is projected to witness a CAGR of 12.9% in terms of revenue during the forecast period 2017 - 2025.
Major Players in the Global Offshore Wind Market:
Some of the major players in the global offshore wind market are MHI Vestas, Siemens AG, General Electric, ABB, Ltd., EEW Group, Nexans, and A2SEA A/S.