The offshore wind turbine market is expected to grow at a compound annual growth rate of 16.47% over the forecast period to reach a market size of US$35.868 billion in 2027, up from US$12.335 billion in 2020. Offshore wind turbines are the pivotal infrastructure in the wind energy market. The turbines harness the wind energy and transform it into electricity. As per the offering, the offshore wind turbine market provides a plethora of services such as material expertise, welding solutions, coatings and resurfacing, design modeling of the wind turbine facility, installation sensors for regular monitoring, and conducting inspections of the sites.
As the dependence on renewables grows, the offshore wind turbine infrastructure also grows. According to International Finance Corporation (IFC) reports, while off-wind energy contributes only 0.3% of global power generation, it remains a critical resource for harnessing energy for areas around the coastline that are not connected to conventional power grids. Even there are initiatives from the government side to upscale the utility of wind energy. The demand for offshore wind turbines grows in tandem with initiatives to reduce the carbon footprints of energy systems, reduce air pollution, and contribute to the pool of renewable electricity.
As per the data by the IEA, the capacity additions of offshore wind turbines have declined by 25%. With the inception being China, considering it the epicenter of the outbreak. With the enforcement of restrictions in China, the new offshore wind farms declined by half. Gradually, as the pandemic rolled out and restrictions were eased, the market gained growth again. Similarly, since Mid-May, the offshore wind turbine market has adapted itself to the pandemic situation given that the offshore wind energy has been holding importance for the coastal nations, the market has witnessed investments in the first half of 2020 at the inception of the unlock down event, Vattenfall Hollandse invested $3.9 billion in the 1.5GW offshore wind energy facility around the Netherlands, SSE Seagreen invested $3.8 billion in an offshore wind facility in the UK, 600 MW, $3.6 billion in Taiwan by CIP Changfang Xidao and many others. The normalization of the market has been triggered by the European nations situated in the North Seas, where the high winds and shallow water provide suitable conditions to harness offshore wind energy. The launching of new policies by the European Union toward this renewable source of energy will create multiple offshore wind facilities, increasing the demand for offshore wind turbines by quadrupling.
Offshore wind energy turbine technological advancements The offshore wind energy turbines have undergone a massive shift from the models which were prone to exposure to seawater. The models in the advanced offshore wind farms are more withstanding, requiring less maintenance, replacement services, etc. The United States government also undertakes the funding of projects, industry collaborations, and national laboratory facilities to conduct research and work on innovative solutions. This aims to improve turbine performance and reduce the cost of offshore wind systems. For instance, as per the data by the United States government, firms are currently working on the project of developing an offshore wind turbine set up as around 58% of the US offshore wind turbines have a deep foundation base in the ocean where it is difficult to undertake repair and maintenance activities. Furthermore, the usage of drones, robots, and analytics modeling has reduced the cost of conducting maintenance and even brought remote assistance to the scattered offshore wind energy turbines.
Challenges in the offshore wind turbine market
Offshore wind turbines are very prone to environmental externalities. As the wind turbines are placed in increasing water depths, the task of undertaking maintenance becomes tedious and difficult. However, some of the challenges can be avoided by changing the structure to jacketed structures. But it also poses manufacturing challenges that drive up the cost of setting the turbine, which is expected to go beyond the benefits received from it. Furthermore, with the intent of cost reduction by introducing larger blades, they have introduced logistical barriers which make the process of installing the turbine difficult. Moreover, offshore wind farms have led to an effect on birds. For instance, Orsted, the Danish group’s offshore wind turbine project, is at a halt as it is affecting the colony of kittiwakes. There is also resistance from the coastal dwellers who might have to vacate their communities to place the project.
The offshore wind turbine is in high demand in Western European countries such as the United Kingdom, Germany, Denmark, the Netherlands, and Belgium because the European countries have offshore lines with potential sites for placing turbines and harnessing energy, which appears to be gaining popularity in European markets. Considering the Asian nations, there would be emerging demand for turbines in Taiwan, South Korea, Japan, and Vietnam. As per the Global Offshore Wind Report, India has a 7,600 km coastline and has set a target of installing 5GW capacity by 2022 and 30GW by 2030, which seems to be appealing for offshore wind turbines. India is expected to be the emerging country to harness almost all forms of renewable energy given the diverse set of resources it has by earmarking approximately 70GW of offshore wind energy development.
In May 2021, Hecate Independent Power Limited (HIP), a US-based renewable energy project developer, unveiled the HIP Atlantic Project, which will deploy around 10 GW of floating & fixed wind power in the North Atlantic, United Kingdom. The project would connect offshore farmland to the national grid network and is projected to cost over USD 30 billion.
In May 2021, GE's renewable energy division revealed that it has received an order for the Dogger Bank offshore wind farm's third phase. The Haliade-X 14 MW offshore wind turbine will be delivered in 87 pieces including a five-year absolute agreement for the project, which will begin installation in 2025 and end in 2026.
Vestas introduced the V236 offshore wind turbine in February 2021, with a total energy rating output of 15 MW. The new units have a swept area of 43,743 m2 to collect most winds, a rotor diameter of 236 meters, and a high nominal power rating, allowing the system to generate up to 80 GWh of energy each year.
The impact of COVID-19 on the offshore wind market was positive overall. The Bureau of Ocean Energy Management established five new Wind Energy Zones in the New York Bight with an installed output of 9,800 MW, according to the Offshore Wind Market Report: 2021 Edition, accounting for a substantial share of the 2020-2021 pipeline increase. The overall installed offshore wind output in 2020 was 5,519 MW. Turbines grew in size, with typical rotor diameters exceeding 150 meters and turbine capabilities topping 7.5 megawatts. In 2020, new trends arose, such as a surge in interest in exploiting offshore wind to generate clean hydrogen. In 2020, the global pipeline for floating offshore wind energy will have increased by more than threefold to 26,529 MW.
|Market size value in 2020||US$12.335 billion|
|Market size value in 2027||US$35.868 billion|
|Growth Rate||CAGR of 16.47% from 2020 to 2027|
|Forecast Unit (Value)||USD Billion|
|Segments covered||Type, Capacity, And Geography|
|Regions covered||North America, South America, Europe, Middle East and Africa, Asia Pacific|
|Companies covered||Siemens Gamesa Renewable Energy, MHI Vestas, Sewind, Goldwind, Envision, GE Renewable Energy, XEMC, Nordex SE, Enercon GmbH, Hitachi Ltd|
|Customization scope||Free report customization with purchase|
Frequently Asked Questions (FAQs)
Q1. What will be the offshore wind turbine market size by 2027?
A1. The offshore wind turbine market is expected to reach a total market size of US$35.868 billion by 2027.
Q2. What is the size of the global offshore wind turbine market?
A2. Offshore Wind Turbine Market was valued at US$12.335 billion in 2020.
Q3. What are the growth prospects for the offshore wind turbine market?
A3. The global offshore wind turbine market is expected to grow at a CAGR of 16.47% over the forecast period.
Q4. Which region holds the largest market share in the offshore wind turbine market?
A4. The European region is expected to hold a significant share in the global offshore wind turbine market.
Q5. What factors are anticipated to drive the offshore wind turbine market growth?
A5. As the dependence on renewables grows, the offshore wind turbine infrastructure also grows.
Siemens Gamesa Renewable Energy
GE Renewable Energy
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