Market Dynamics:

Growing renewable energy targets by governments is estimated to drive the offshore wind market over the forecast period. Various governments are setting targets to increase the capacity of renewable energy for power generation and reduce dependence on conventional energy sources. For instance, the EU aims to generate at least 32% of its total energy from renewable energy sources by 2030. Similarly, the UK government aims to generate 30 gigawatts (GW) of energy from offshore wind by 2030. This growing emphasis on renewables is expected to boost the offshore wind market.

Furthermore, the increasing competitiveness of offshore wind energy is also estimated to support the market growth. Factors such as continuous technology improvements, economies of scale, and competitive auction processes have reduced the cost of offshore wind energy significantly. According to the International Renewable Energy Agency, the levelized cost of energy from utility-scale offshore wind farms declined by 14% between 2017 to 2019 period. The falling costs have made offshore wind projects cost-competitive compared to other conventional power generation sources. Cost reductions are expected to continue to drive offshore wind adoption and spur market growth over the forecast period.

SWOT Analysis

Strength: Offshore wind is a very clean source of renewable energy with no pollution or greenhouse gas emissions. It also has a higher capacity factor compared to onshore wind. Offshore winds are much stronger and more consistent than on land, allowing for higher energy production. Offshore wind farms can be located closer to coastal cities where a large portion of energy is consumed.

Weakness: Offshore wind is more expensive to develop and install than onshore due to higher infrastructure and maintenance costs of operating in ocean environments. There are also technical challenges to install turbines and connect them to the onshore grid from many miles offshore. Adverse weather conditions can hamper construction and maintenance work.

Opportunity: Many countries have ambitious targets to increase renewable energy and reduce greenhouse gas emissions. This growing policy support is driving significant growth in offshore wind energy development globally. As technology advances, costs are expected to come down over time making offshore wind more competitive against traditional power sources. Developing offshore wind could provide opportunities for local job creation and economic growth.

Threats: Limited suitable geographical locations and environmental considerations pose siting challenges. Plans often face objections from local communities and environmental activists over visual impacts and risks to ocean wildlife. Competition for ocean space from other uses such as shipping lanes, marine protected areas, fishing grounds add political and regulatory complexities. Financial failures of early developers in the past have caused delays.

Key Takeaways

The Global Offshore Wind Market Size is expected to witness high growth over the next decade driven by supportive government policies and tariff support schemes around the world for clean energy development. The global offshore wind market is estimated to be valued at US$ 63.79 Bn in 2023 and is expected to exhibit a CAGR of 7.9% over the forecast period 2023 to 2030.

Europe currently dominates the market with major markets including the UK, Germany, Belgium, Netherlands, Denmark and Norway but growth in Asia Pacific and North America is projected to be very high. The UK and Chinese offshore wind markets are set to become the largest globally in terms of capacity additions through 2030. However, Asia Pacific is emerging as the future hub for offshore wind with China expected to spearhead expansions supported by national targets. The country’s total offshore wind power capacity is forecast to reach over 100 GW by 2030 from just 5 GW in 2020. Other markets like Japan, South Korea and Vietnam are also developing substantial projects. In North America, both the US and Canada are now pushing developments with billions being invested across various eastern and west coast projects.

Key players related content comprises:

Key players operating in the offshore wind market are Groupe Danone, Fonterra Co-operative Group Ltd., Proliant Inc., Koninklijke DSM N.V., E.I. DuPont De Nemours and Company, Arla Foods amba, Cargill Inc., Groupe Lactalis S.A., APS BioGroup, and Nestle S.A. Major players are investing in technological advancements around turbine design and foundation, installation and grid integration to make offshore projects more viable. Consolidation across the value chain is also witnessed to achieve economies of scale.

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