The global offshore wind market was valued at USD 24 billion in 2019, is expected to reach USD 42 billion by 2025, and is anticipated to expand at a CAGR of around 18% during the forecast period, 2020 – 2027. Offshore wind energy or offshore wind power is renewable energy produced from wind using windmills. Wind farms constructed on the inland shelf of fjords, lakes, and sheltered coastal areas produce wind energy for electricity generation. The offshore wind energy market is estimated to witness considerable growth, owing to rising demand for clean energy. According to the Bloomberg New Energy Finance (BNEF), the global investment towards development of clean energy was around USD 332 billion in 2019, which marks the fifth consecutive year in which the investment exceeded USD 300 billion marks.
Market Segment Insights:
Turbines to account for 30% share of the market
In terms of components, the global offshore wind energy market can be segmented into turbines, support structure, and electrical infrastructures. The turbine segment is expected to account for a major share of the market during the forecast period. Rapid advancements in technology of aerodynamics, material composition, and power output are key factors that are estimated to increase the demand for turbine, which contains nacelle, rotor, and blades. Increase in new types of turbines are estimated to fuel the growth of the market. According to Renewables Now, a new prototype of E-138 EP3 for their E2 wind turbines is expected to generate an additional power of 1.5 million kWh every year in Schleswig-Holstein, Germany.
Fixed structure to be the most preferred offshore installation
On the basis of installations, the market can be bifurcated into fixed structures and floating structures. The fixed structure segment is anticipated to expand its share in the market, due to its cost effectiveness and easy operations. On the other hand, the floating structures segment is estimated to witness significant growth during the forecast period.
Global offshore wind energy market to witness substantial growth in transitional water installations
In terms of water depths, the market can be divided into below 30m, 30m – 50m, and above 50m. The 30-50m segment is estimated to expand at a CAGR of around 85% during the forecast period, while the below 30m segment is projected to dominate the market in the coming years, due to its low maintenance cost and easy installation.
3MW – 5MW capacity to find wide applications in the global offshore wind energy market
Based on capacity, the market can be divided into upto 3mw, 3mw – 5mw, and above 5mw. The demand for 3MW – 5MW is anticipated to increase, due to increasing demand for floating structure and transitional water installations.
Europe to witness growth around 30% and stay as a dominant region in the market
In terms of regions, the market can be divided into Europe, North America, Asia Pacific, Latin America, and Middle East & Asia. Europe is anticipated to hold a significant share of the market in the coming years. The market in the UK is anticipated to grow at around 28% during the forecast period, owing to increase in investments, large scale utility projects, and leveraging schemes. Countries like UK, Norway, Denmark, Germany, Netherlands, Belgium, and France in Europe region, which are near the North Sea, are expected to hold around 50% of total offshore wind energy installation of Europe. China is estimated to contribute to the growth of Asia Pacific offshore wind energy market by installing major floating structure wind turbines.
Market Trends, Drivers, Restraints, and Opportunities:
- Increase in investments, R&D, government schemes, activities and regulations encouraging the development of offshore wind energy are anticipated to boost the market growth.
- Rising global concerns for climate change and its impact on the environment are key factors driving the market growth. Unlike the conventional power depending on fossil fuels, the offshore wind energy technology uses renewable sources of energy to generate electricity power. Hence, the latter is slowly replacing the conventional systems, which is anticipated to push the market growth.
- Cost efficiency in the development of offshore wind energy in the long run is a key factor that can propel the market expansion, since large sizes of wind turbines and blades are economical in the long run. High maintenance cost of offshore winds turbines and rising concerns for sea life are the key challenges that can hamper the market growth.
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