According to Coherent Market Insights, the global offshore wind market was valued at US$ 23.29 Billion in 2016, and is projected to exhibit an impressive CAGR of 15.8% over the forecast period (2018-2026).
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Key Trends and Analysis of the Offshore Wind Market:
Offshore wind farms are constructed in the bodies of water, which provides the electrical energy on the continental shelf to harvest the wind energy. Major divers propelling growth of the global offshore wind market include, increasing demand for renewable energy for power generation, government initiatives and policy frameworks to reduce carbon footprints. For instance, the European Wind Energy Association has set a target of 40 GW offshore wind projects installed by 2020, and 150 GW offshore wind projects by 2030. Moreover, high electricity prices, space constraints for solar energy and onshore projects coupled with reduction in construction and installation costs of offshore technology are expected to aid in growth of the offshore wind market during the forecast period.
However, high initiating capital cost of projects with a high maintenance cost and logistics issues are factors that are expected to hinder growth of the global offshore wind market. According to World Energy Council, European projects had a typical capital expenditure of around US$ 1.0 - 1.5 million/MW. Hence, UK has set up a new industry task force to set out a path and action plan for reducing the levelised cost of electricity (LCOE) of offshore wind to US$ 150/MWh by 2020. Moreover, formation of high tidal winds due to adverse climate changes that make it difficult to access offshore wind farms even for preventive maintenance and problem rectification is expected to negatively impact the global offshore wind market growth during the forecast period.
The global offshore wind market is segmented on the basis of location, component, and region. Among location, shallow water segment held the dominant position in the offshore wind market in 2017, owing to major cost-effective developments in the shallow water offshore wind projects. According to University of Massachusetts Wind Energy Center, in Europe, more than 800 MW of shallow water offshore wind energy projects has been installed in the North Sea and the Baltic Sea.
Among components, turbine segment held the dominant position in the market in 2017, and is expected to retain its position throughout the forecast period. The increase in size and improved design of turbines enables high-energy production. Therefore, key energy companies are focusing on upgrading turbines to expand their business in the offshore wind market. According to the World Energy Organization (WEO), the power generation particularly from wind and solar energy increased up to 200GW from 2013 to 2015 across a globe. Moreover, increasing demand for technically advanced turbines is also expected to boost the market growth. For instance, turbine manufacturers such as Bergey Wind Power, C&F Green Energy, and Kelso Energy LTD are updating the turbines with advanced technologies such as onboard sensors, advanced rotor with the features of injection, and compression molding.
Europe held a dominant position in the global offshore wind market in 2017, and is projected to maintain its dominance during the forecast period. This is owing to increasing numbers of approved pipeline projects coupled with growing investment from private sector in offshore wind energy production in the region. According to Coherent Market Insights, there are total 3,344 offshore wind turbines are installed in European waters off the coasts of 11 countries, with a combined capacity of 11,538 MW. In addition, according to GTAI, in 2016, Germany held the largest position in the Europe’s wind energy market, with more new offshore wind project having capacity of 5.4 GW installed. Moreover, Asia Pacific is expected to be the fastest growing market, owing to increasing demand for clean energy to reduce carbon emissions and growing importance of renewable energy resources in the region.
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Key Market Takeaways:
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