10 takeaways from the Global Offshore Wind Update 2024

 

 

The Global Wind Energy Council (GWEC) released a new report on June 17, 2024, highlighting key insights and updates on the global offshore wind sector. This Climate Shocker will walk you through the 10 most important insights from the report:

1. 2023 was a challenging year for the offshore wind sector. Inflation, increased interest rates, and supply chain constraints created a lot of uncertainty in the industry.
2. Despite these challenges, 10,8 GW of offshore wind capacity was installed worldwide last year, representing a year-on-year increase of 24%. This makes 2023 the second-best year for offshore wind globally, bringing the total global capacity to 75,2 GW.

Figure 1: New offshore wind insallations in the world (MW). Chart from Econopolis Strategy. Source: GWEC, 2024

3. For the sixth consecutive year, China dominated the global offshore wind developments, adding 6.3 GW in 2023. Europe also maintained its strong position, achieving a record year with 3,8 GW of new offshore wind capacity. The Netherlands contributed the most within Europe with 1.9 GW, followed by the UK with 833 MW and France with 360 MW.
4. In 2023, China and Europe installed 93% of the global offshore wind capacity, while the rest of the world installed only 7%. By the end of 2023, 99.9% of total global offshore wind capacity was located in Europe and Asia.

Figure 2: Regional share of new offshore wind installations in the world. Chart from Econopolis Strategy. Source: GWEC, 2024

 

5. To date, the US has played a minor role in the offshore wind sector, with only 42 MW of capacity in operation by the end of 2023. In contrast, Belgium has 2,262 MW, over 50 times more. However, this is set to change as the US currently has four projects under construction, totaling 4.3 GW, and an additional 50 GW of projects in the development and planning stages.
6. Countries in Latin America and the Asia-Pacific region are also poised to drive the next wave of offshore wind markets, such as Brazil, Colombia, Australia, South Korea, Japan, Philippines, Vietnam and India. These countries are part of a growing group of governments that have reaffirmed and reinforced their commitments to offshore wind development.
7. Despite recent challenges, significant opportunities exist: 1) the establishment of a global goal to triple renewable energy by 2030 in the final COP28 agreement is both unprecedented and historic, and 2) the urgent need to ensure energy security, driven by Russia’s invasion of Ukraine.
8. According to IRENA, the world will require 380 GW of offshore wind capacity by 2030 and 2,000 GW by 2050 to achieve one-third of the necessary emission reductions in the power sector. The World Bank estimates that there is over 71,000 GW of technical potential for offshore wind globally.
9. By 2033, GWEC expects annual installations to grow to 66 GW, implying a compound annual growth rate (CAGR) of nearly 20%. This suggests that the offshore wind share of new wind power installations will increase from 9% today to at least 25%.
10. Floating wind has enormous potential, but GWEC believes large-scale commercialization will not occur before the end of this decade. They estimate 8.5 GW of floating wind installations to be built by 2030. Norway, the UK, Portugal, China, and Japan are currently the top five markets for floating wind installations.

 

At Econopolis Strategy, we are also engaged in the economic aspects of the energy transition. We have conducted feasibility studies for the Belgian energy island and are developing a software tool that can model the optimal placement of offshore wind turbines in the North Sea. Additionally, we aim to initiate a research project with several institutions to explore the feasibility of offshore wind turbines in the "High Seas."