The market for offshore wind energy, which was estimated to be worth USD 27.33 billion in 2021, is predicted to increase at a CAGR of 18.82% from 2022 to 2030, reaching USD 129 billion. Because it has the ability to produce enormous amounts of power while simultaneously minimizing the aesthetic effect on the land, offshore wind energy is growing in popularity.

Offshore wind energy refers to the process of generating electricity from wind turbines located in bodies of water, usually in the ocean or sea. Offshore wind turbines are typically larger and more powerful than their onshore counterparts, and they can take advantage of stronger and more consistent winds that are available over the water.

Offshore wind energy is becoming increasingly popular because it has the potential to generate large amounts of electricity while also minimizing the visual impact on the land. Offshore wind farms can be located far from the shore, and their turbines can be placed in deeper water, which makes them less visible from the coast.

Offshore wind energy is a clean and renewable source of energy that does not produce greenhouse gas emissions or other pollutants, making it an important part of the global effort to address climate change. However, the construction and maintenance of offshore wind farms can be expensive, and there are also concerns about the impact of these structures on marine life and ecosystems. Offshore wind energy is a rapidly growing sector of the renewable energy market. In recent years, advances in technology and increasing demand for clean energy have made offshore wind a competitive and viable source of energy generation. In this blog, we will explore the current state of the offshore wind energy market, its potential for growth, and the benefits it offers.

Market Overview

The global offshore wind energy market size was valued at USD 27.33 billion in 2021 and is expected to hit USD 129 billion by 2030, poised to grow at a CAGR of 18.82% during the forecast period 2022 to 2030. Europe currently dominates the market, with the UK, Germany, and Denmark leading the way in terms of installed capacity. However, other regions are catching up, with the US, China, and Taiwan investing heavily in offshore wind development. Surging investment by the government to develop clean energy is expected to propel the growth of the market. The rising need to reduce carbon emissions also triggers potential growth in the market. The growing demand for renewable energy and the declining costs of offshore wind technology are key drivers behind this growth.
Potential for Growth

Offshore wind energy has enormous potential for growth, as it provides several benefits over traditional forms of energy generation. For one, offshore wind farms can generate much larger amounts of energy than onshore wind farms, due to the stronger and more consistent winds at sea. Additionally, offshore wind turbines are less visible and less noisy than onshore turbines, which can help to reduce opposition to wind farm development. The growing investment by the government of various economies to deploy wind energy will likely propel the industry demand.

Offshore wind energy can also help to reduce greenhouse gas emissions and combat climate change. According to the International Energy Agency, offshore wind could provide 18 times the global electricity demand by 2040, which would help to significantly reduce carbon emissions.


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Market Drivers

There are several key drivers of the offshore wind energy market:

Government policies and regulations: Governments around the world are setting targets for renewable energy generation and implementing policies and regulations to support the development of offshore wind projects.

Technological advancements: Advances in wind turbine technology, installation techniques, and grid integration are making offshore wind energy more efficient and cost-effective. Enhancing the design and development of supporting infrastructure is adding to the market share.

Increasing demand for renewable energy: As concerns about climate change grow, there is increasing demand for clean and renewable energy sources, including offshore wind.

Cost competitiveness: The cost of offshore wind energy has been steadily declining over the past decade, making it more competitive with other forms of energy.

Availability of suitable sites: Many countries have large areas of shallow water that are suitable for offshore wind development, which is driving the growth of the market.

Industry collaboration: Collaboration between governments, energy companies, and other stakeholders is helping to accelerate the development of offshore wind projects and drive down costs.

Economic benefits: Offshore wind projects can create jobs and stimulate economic growth in the regions where they are located, providing additional incentives for governments to support their development.

Benefits of Offshore Wind Energy

Offshore wind energy offers several benefits over traditional forms of energy generation. For one, it is a clean and renewable source of energy that does not produce harmful emissions. Additionally, offshore wind turbines are less visible and less noisy than onshore turbines, which can help to reduce opposition to wind farm development.

Offshore wind energy can also create jobs and stimulate local economies. The construction and operation of offshore wind farms require a skilled workforce, which can provide employment opportunities in areas where jobs may be scarce. Additionally, the development of offshore wind energy infrastructure can create new opportunities for local businesses.

Europe will likely dominate the market

The global offshore wind energy market is segmented into North America, Latin America, Europe, Asia Pacific, Middle East and Africa. Europe acquires the dominant share in the overall market. According to the European Union, Europe accounts for one-fourth of all offshore wind market deployments worldwide. Therefore, Europe (mainly the nations bordering the North Sea) is likely to dominate the offshore wind industry.

In European seas, there are approximately 85% of all offshore wind installations worldwide. The installation of offshore wind farms within the territorial waters of the governments of the European region, especially those in the North Sea region, has been set as an ambitious goal.

Europe increased its offshore wind power capacity by 2,899 MW in 2021, bringing the overall amount of offshore wind energy to 27814 MW. This additional capacity was added to the grid by the Netherlands (2490 MW), Belgium (2262 MW), and the United Kingdom (12700 MW).

The government of Norway announced an investment plan in May 2022 with the goal of allocating sea areas for offshore wind development by 2040, with a target capacity of 30 GW. Offshore wind that is floating in Europe presents special possibilities. Compared to bottom-fixed turbines, floating turbines can generate power in deeper and farther offshore seas. With the help of floating technology, offshore wind can now be created in deep sea basins like the Mediterranean or Atlantic that do not have shallow water.

A record USD 48.5 billion was spent in 2021 to finance the construction of new wind farms in Europe, adding an extra 24.6 GW of capacity. By 2021, a record 17.3 GW of projects would have changed hands, and project purchase activity would have cost EUR 15.6 billion. In Europe, wind energy has been a common investment, and the industry has a bright future. For instance, between 2021 and 2028, the German government has planned three tender dates with a combined tender volume of nearly 31 GW.

Conclusion

The offshore wind energy market is a rapidly growing sector of the renewable energy market, with enormous potential for growth. Advances in technology and increasing demand for clean energy are driving this growth, and the benefits of offshore wind energy are numerous. As the world seeks to reduce greenhouse gas emissions and combat climate change, offshore wind energy is poised to play a key role in meeting these challenges.

Segments Covered in the Report

By Components

• Turbines
  
  • Rating
    
    • ≤ 2 MW
    
    
    • > 2 to ≤ 5 MW
    
    
    • > 5 to ≤ 8 MW
    
    
    • > 8 to ≤ 10 MW
    
    
    • > 10 to ≤ 12 MW
    
    
    • > 12 MW
  
  
  • Installation
    
    
    
    • Floating
      
      • Axis
      
      
      • Component
    
    
    • Fixed
      
      • Axis
      
      
      • Component


• Electrical infrastructure
  
  • Wires & cables
  
  
  • Substation
  
  
  • Others


• Support Structure
  
  • Substructure (steel)
  
  
  • Foundation
    
    • Monopile
    
    
    • Jacket
  
  
  • Others

By Location

• Shallow Water


• Transitional Water


• Deep Water

By Depth

• 0 to ≤ 30 m


• 30 to ≤ 50 m


• 50 m

By Capacity

• Up to 3MW


• 3MW to 5MW


• Above 5MW

By Geography

• North America
  
  • U.S.
  
  
  • Canada


• Europe
  
  • U.K.
  
  
  • Germany
  
  
  • France


• Asia-Pacific
  
  • China
  
  
  • India
  
  
  • Japan
  
  
  • South Korea
  
  
  • Malaysia
  
  
  • Philippines


• Latin America
  
  • Brazil
  
  
  • Rest of Latin America


• Middle East & Africa (MEA)
  
  • GCC
  
  
  • North Africa
  
  
  • South Africa
  
  
  • Rest of the Middle East & Africa

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