Long-term growth is expected for the offshore wind market with a CAGR of 20% from 2016 to 2025 driven mainly by Europe and China according to MAKE’s Global Offshore Wind Power Market 2016 report. Despite reduced growth targets in China, the offshore wind market will be boosted by the Chinese market, which will account for around 30% of the global cumulative capacity by 2025. Uncertainty in the US market following the election of Donald Trump impacts growth projections negatively, delaying some projects to outside of MAKE’s 2016 to 2025 outlook period.
Turbine ratings are increasing rapidly, and by 2020 the average European turbine rating will increase by more than 100% compared to the average in 2015. Enhanced components such as towers, blades and foundations required for offshore puts pressure on the supply chain to meet demand. Increasing demands on turbine installation performance will require larger vessels, while smaller ones will become obsolete and will be pushed out of the market. Excess supply of turbine installation vessels will continue toward 2020. Foundation installation vessels with a capacity less than 950t will leave the market driven by demand for more capable jack-up vessels. The supply of foundation installation vessels is not expected to grow toward 2020.
HVAC transmission seems to be the preferred option for projects until 2025 outside of Germany. The industry is now preparing to make a transition from 33kV to 66kV inter-array cables to support increasing turbine sizes. 4GW of the project pipeline is currently based on 66kV cables driven by Europe, where the transition from 33kV inter-array cables to 66kV cables will start from 2019. While monopole foundations will continue to dominate the market at least until 2020, new innovative foundation concepts - e.g., floating suction bucket jackets - will be tested and will play an important role in driving down costs.
Continued policy support for offshore wind is key to continue positive industry development with increasing cost-out opportunity. The offshore wind industry is making promising progress in terms of reducing cost of energy and by 2025 offshore wind will be approaching grid parity.
