Growth Opportunities in the Offshore Wind Turbine Market, Forecast to 2025
Offshore wind energy involves the harvesting of wind power by setting up wind turbines in bodies of water, usually on the seafloor. Owing to the higher wind velocities in offshore locations, offshore wind turbines deliver greater power than their onshore counterparts. Higher offshore wind velocities also translate into higher capacity utilization factors (CUF) verifying the superior performance of offshore wind turbines, with offshore turbines providing a CUF of approximately 38% as compared to 27% for onshore turbines. In addition, offshore wind turbines also address the issue of land availability afflicting the onshore wind market. Such advantages encourage the steady uptake of offshore wind turbine technology in recent years.
Country-specific clean energy targets aimed at remedying climate change and the presence of strong regulatory support drive the growth of the global offshore wind turbine market. The growing interest of the corporate sector in procuring wind power to meet its renewable energy targets and the advancements in offshore wind turbine technology boost the demand for offshore wind turbine power. The development of floating offshore wind turbines is expected to significantly augment growth by opening up previously inaccessible offshore locations for the installation of wind turbines.
Due to the harsh environments of offshore wind farm locations, the structure, foundation, mechanical components, wind blades, and other elements have to be designed to withstand these demanding conditions. As a result, offshore wind energy has a higher levelized cost of energy (LCOE) than onshore wind. However, costs have been decreasing owing to advancements in wind power technologies.
Innovations in turbine technology such as bigger capacity wind turbines, two-bladed turbines, modular turbines, and 3D printing have brought down the overall cost of offshore wind power by reducing the initial investment as well as the operation and maintenance (O&M) costs. Another breakthrough technological advancement that is driving the growth of the offshore wind market is Big Data analytics and the Internet of Things (IoT). Leveraging Big Data analytics and IoT, real-time monitoring of remote and difficult-to-access offshore locations helps ensure accurate predictive maintenance activities and eliminates unnecessary routine maintenance.
Europe is the most developed market for offshore wind turbines, with Asia-Pacific expected to occupy the leading position in the next 5 or 7 years. The UK, Germany, and Denmark drive the offshore wind market in Europe while Japan, Taiwan, and South Korea drive the demand in the Asia-Pacific region. The North American market is expected to start picking up in the near future, as several projects are scheduled to go online in the next few years. Emerging markets, especially Taiwan, offer significant growth opportunities for the offshore wind market.
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