'Massive Economic Opportunity': One-Third Surge in Worldwide Offshore Wind Projects
The global pipeline for floating offshore wind farms has experienced a remarkable surge, expanding by 32% from 185GW to an impressive 244GW in the last year. That's according to the latest data laid bare by RenewableUK's EnergyPulse Insights report.
This recent study goes beyond just the numbers; it offers a granular view of the entire sector's health. It illuminates that projects at varied stages—those that are fully operational or those still in the conceptual phase—have soared from 230 to 285. This leap showcases the sector's momentum, where emerging players and established titans are earnestly vying for market share.
Zooming in on operational capacity, the data points to a total of 227MW, realized across 14 unique initiatives distributed among seven countries. Topping this list is Norway, contributing a hearty 94MW through three projects. The UK follows suit, although at a slightly lesser scale, at 80MW divided between two sites.
In contrast, Portugal has entered the foray with a solitary 25MW venture, while China stands as a contender with a 19MW capacity spread across a trio of projects. As for Japan, Spain, and France? They've dipped their toes in the water, contributing 5MW, 2MW, and 2MW, respectively.
Yet, let's avoid being lulled into complacency by these operational statistics. The report illuminates that the actual installed capacity is a mere drop in the ocean when juxtaposed against the enormous pipeline. For instance, 46MW is presently under construction in a trio of initiatives, and another 576MW is sealed or almost there, spread across 11 projects. Then, you have 80 other projects, offering a jaw-dropping 68GW in aggregate in various planning or leasing stages. Add to that 177 projects that are in their infancy but could provide a staggering 175GW, and you'll see just how nascent this sector truly is.
Where is most of this frenetic activity centred? Europe—capturing a lion's share of almost two-thirds or a colossal 160GW, with the UK alone boasting 35GW, primarily in Scottish waters. Not to be outdone, Italy has set its sights high, amassing a pipeline of 40GW across 47 nascent projects.
Dan McGrail, chief executive at RenewableUK and co-chair of the Floating Wind Taskforce, said that although the UK remains a world leader in floating wind, other countries are eyeing a "massive economic opportunity" and are determined to secure a slice of the global market. "The international competition for investment is intensifying rapidly," he said.
RenewableUK's report also projects a golden future for floating wind in the UK. It anticipates that by 2050, this form of energy will contribute more than half of the UK's offshore wind production. This translates to a massive economic injection of approximately £43.6 billion and could generate over 29,000 jobs. Furthermore, the economic benefits could cascade down to coastal communities, requiring an estimated £4 billion to revamp nearly a dozen UK ports and unlock up to £3.6 billion in development funds.
However, a cautionary note resounded in the report. While the UK government's 2030 target of achieving 5GW in floating wind seems feasible, RenewableUK stressed that the upcoming Contracts for Difference auctions must be optimized to leverage this burgeoning sector fully. Especially since this year's auction notably failed to secure any new floating wind projects despite a substantial 250MW being 'shovel-ready.'
So, while the industry is abuzz with potential, the report underlines the urgency to recalibrate policy frameworks to match this growth trajectory and fully harness the latent potential. The time is ripe for stakeholders to take concerted actions. The wind of opportunity is blowing, raising the sails to us.
"We urgently need a step-change from our partners in government to ensure that this cutting-edge industry can attract billions in investment to boost deployment and build up new supply chains, rather than focussing solely on a race to the bottom on prices," McGrail said.
"To ensure that the UK seizes the industrial benefits of developing state-of-the-art technology and revitalizing ports around the country, we need to see sustainable prices to enable stepping-stone projects to go ahead in a successful auction next year and every year.
"Leveraging these projects will enable us to replicate the cost reductions we've seen in fixed-foundation offshore wind, as well as catalyzing supply chain development. We're determined to make the 2020s a decade of acceleration for floating wind".
RenewableUK's report comes just days after the annual state of the industry report from the REA - the Association for Renewable Energy and Clean Technology - estimated that the UK's renewable energy and clean technology sectors could see their collective market value more than double to £46bn over the next 12 years.
Moreover, the Offshore Wind Industry Council recently estimated that growing the UK's supply chain for offshore wind projects could deliver a £92bn boost the British economy by 2040.