The offshore wind energy market is estimated to witness high growth owing to rapid increase in offshore wind power installations
Offshore wind energy comprises large wind turbines located in coastal waters or in lakes. These offshore wind farms provide many advantages over land-based wind farms such as stronger and more consistent winds, possibility of installing larger turbines to generate more power, and easier transportation of electricity. Stronger winds allow turbines to capture more energy and operate at greater efficiencies. Offshore wind farms also help avoid objections from local residents that often accompany land-based developments.
The Offshore Wind Energy Market is estimated to be valued at US$ 5.78 Bn in 2023 and is expected to exhibit a CAGR of 18% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
One of the key trends driving the growth of offshore wind energy market size is rapid increase in offshore wind power installations across major markets. According to the Global Wind Energy Council (GWEC), annual installations of offshore wind capacity grew by over 50% each year between 2015 and 2020. Majority of new offshore wind projects are in Asia and Europe. For instance, China approved several multi-gigawatt offshore wind zones to support its target of expanding offshore wind capacity to 30 GW by 2025 and 70 GW by 2035. In Europe, the UK, Netherlands, Germany and Belgium have emerged as major markets for offshore wind development. This rapid increase in offshore wind installations is expected to continue over the forecast period, thus propelling the offshore wind energy market growth.
Porter's Analysis
Threat of new entrants: The high initial capital required for wind turbine installation and operations poses significant entry barriers for new players.
Bargaining power of buyers: There are only a few large buyers like utility companies and governments which make individual buyer power relatively low.
Bargaining power of suppliers: A few major turbine suppliers like Vestas and Siemens exist, giving them significant bargaining power over project developers.
Threat of new substitutes: Alternate renewable technologies like solar are emerging as substitutes but wind remains competitive for offshore locations.
Competitive rivalry: Fierce competition exists among major players for larger share of offshore project opportunities.
SWOT Analysis
Strengths: Predictable power generation and decreasing LCoE of offshore wind energy. Weaknesses: High upfront installation and grid connection costs. Risk of damage to turbines from harsh marine conditions. Opportunities: Growing global commitment to achieve renewable energy targets stimulates investments. Emerging floating turbine technology opening new offshore locations. Threats: Delays and cost overruns from permitting and development challenges of offshore projects. Dependence on government subsidies currently.
Key Takeaways
The global offshore wind energy market is expected to witness high growth, exhibiting CAGR of 18% over the forecast period, due to increasing commitments of governments and regulators towards cleaner energy adoption.
European region currently dominates the market and is expected to continue its lead, with countries like UK, Germany, Belgium, Netherlands and Denmark adding significant capacity over the coming decade. Asia Pacific region is witnessing fastest growth led by major markets of China and Japan.
Key players operating in the offshore wind energy market are Siemens Gamesa Renewable Energy, Vestas Wind Systems A/S, MHI Vestas Offshore Wind, Ørsted A/S, EDP Renewables, RWE Renewables, Equinor ASA, China Three Gorges Corporation, Envision Energy, Goldwind Science and Technology Co., Ltd. Majority of capacity additions are done through joint developments between turbine suppliers and project developers. Consolidation trends are being witnessed among players to strengthen competencies across project lifecycles.
Get more insights on this topic: https://www.feedsfloor.com/energy/offshore-wind-energy-market-estimated-witness-high-growth-owing-rapid-increase-offshore-wind
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