Offshore wind market ‘demand’ to grow by £8.5bn by 2028, Woodmac reports claims

Offshore wind vessel.
The Floating Offshore Wind event will cover how to strengthen the supply chain, operations and maintenance.

Global offshore wind market “demand” is set to grow by more than £8.5 billion as subsidy-backed projects continue their domination, according to a new report by Wood Mackenzie (Woodmac).

The research firm’s examination of the market found that Europe is expected to see the lionshare of the 17% annual worldwide growth figure, contributing £5.2bn in value.

The Asia Pacific is also estimated to “keep up pace” in operation and maintenance (O&M) market size and spend.

Shimeng Yang, report lead and Woodmac senior offshore wind analyst, said: “We expect average OPEX across Europe to drop by 57% between 2019 and 2028, mainly driven by larger turbine ratings, improved turbine reliability, economies of scale in service (due to larger-scale projects), new service practices and clustering opportunities.

“Turbine O&M costs constitute the biggest portion of offshore wind OPEX spend.

“Uncertainty caused by key component failures is further pushing costs upwards. As such, a proactive approach is highly emphasised to replace key components to reduce turbine downtime and associated revenue losses.”

The new report suggests that subsidy-backed projects will continue to dominate the market, accounting for 27 gigawatts (GW) of generated energy.

Woodmac also claims blade erosion and repair of major components will also account for a substantial proportion of the market, estimated at £47.9m.

Daniel Liu, Woodmac principal analyst, said: “Both turbine design and harsh operating conditions are to blame for the erosion.

“Newer models have larger rotors for more energy output while leading to higher tip speeds.”

Demand for up-to-date vessels will also be a large part of the market, with older ships unable to meet the specification for larger turbines.

Søren Lassen, Woodmac senior offshore wind analyst, added: “This trend has been further fuelled by an excess supply of installation vessels in the market, which is set to intensify in the mid-2020s when next generation turbines will start to be deployed.”