The offshore wind market involves components such as substructures, turbines, electrical infrastructure, and operations and maintenance for offshore wind farms. Offshore wind energy is now a well-established part of renewable energy generation capacity in Europe and is poised for significant growth across key markets in Asia and North America. Offshore wind energy is a renewable and sustainable means of electricity production that offers several advantages over onshore wind such as access to stronger and more consistent winds and ability to install larger wind turbines.
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, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
The rapid growth in renewable energy capacity addition is expected to flourish the offshore wind market over the forecast period. As mentioned in the heading, renewable energy including offshore wind power provides a sustainable solution for increasing energy demand globally while curbing greenhouse gas emissions. Countries around the world have committed to ambitious renewable energy targets to transition to clean energy sources over the coming decades. For instance, the European Union has set a target of reaching 32% renewable energy in the total energy mix by 2030. Asia Pacific region also aims to increase renewable energy capacity significantly led by China, Japan and South Korea. Government incentives and initiatives promoting offshore wind projects will continue to drive the market.
Another driver for the offshore wind market is ability to install larger wind turbines and harvest wind energy more efficiently. Unlike onshore wind farms that face space constraints, offshore areas allow for installation of bigger wind turbines with higher generating capacities. Larger turbine sizes lower the cost of energy production substantially. Turbine technology innovations enabling rotors with over 200 meter diameters are increasing the economies of scale of offshore wind farms. This makes offshore wind a competitive renewable energy source.
Segment Analysis
Offshore Wind Market is dominated by two key segments – installation and operations. The installation segment currently holds around 60% share driven by the growing number of new offshore wind farm projects being sanctioned globally. However, the operations segment is expected to witness faster growth during the forecast period led by increasing focus on turbine maintenance and upgradation of existing wind farms.
PEST Analysis
Political: Growing support from governments worldwide in the form of subsidies, tax incentives and supportive policies is boosting investments in the offshore wind energy sector. However, lengthy approval processes continue to pose challenges.
Economic: Higher capital costs involved in offshore wind projects are being offset by falling turbine prices and technology advancements. Investments are rising steadily driven by competitiveness of offshore wind power generation costs vis-a-vis conventional sources.
Social: Offshore wind is increasingly being seen as a viable renewable alternative to fossil fuels and aids in job creation in manufacturing, construction and operations. However, local communities still raise concerns over visual impacts of turbines.
Technological: Technological innovations such as bigger rotor diameters, taller towers, advanced drive trains and digitalization are enhancing turbine efficiency. Floating turbine technology is opening up new offshore areas.
Key Takeaways
The Global Offshore Wind Market Growth is expected to witness high over the forecast period led by supportive policies and rising investments globally. 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 and is expected to continue its lead supported by the region’s ambitious renewable energy targets. Countries like China, USA and Taiwan are emerging as high growth regional markets.
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. Rapid technology advancements are enabling players to develop larger and more efficient turbines, helping to further reduce costs. Partnerships and collaborations across the value chain are also on the rise.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it