Offshore wind energy is the use of wind farms constructed in oceans or seas to produce electricity. Offshore wind power provides several advantages such as abundant and strong wind resources, easy acquisition of land areas, avoidance of noise pollution caused due to onshore wind turbines, and potential energy yield.
The global Offshore Wind Energy Market is estimated to be valued at US$ 5.78 Bn in 2023 and is expected to exhibit a CAGR of 18% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
One of the key trends in the offshore wind energy market size is the increasing focus on large capacity offshore wind farms. Continuous reduction in the levelized cost of energy from offshore wind projects and advancements in wind turbine technology has enabled development of large capacity offshore wind farms. For instance, Hornsea Project One located in UK has a capacity of 1.2 GW making it largest offshore wind farm in the world. Similalrly, Dominion Energy is developing 2.6 GW Coastal Virginia Offshore Wind commercial project in USA. Such large capacity offshore wind farms are helping drive the growth of offshore wind energy market.
Strength: Offshore wind energy is a renewable source of energy and has a lower visual impact compared to onshore wind farms. It allows the installation of larger wind turbines that can generate higher electricity output.
Weakness: High initial investment cost associated with offshore wind farm development and installation. Challenging installation and maintenance process due to operations in deep waters.
Opportunity: Growing global demand for clean and renewable sources of energy provides huge growth opportunities. Technological advancements are helping reduce costs and address installation challenges.
Threats: Delay or cancellation of projects due to financing issues or changes in government policies and regulations. Natural calamities like storms can damage turbines and disrupt operations.
The global offshore wind energy market is expected to witness high growth, exhibiting a CAGR of 18% over the forecast period, due to increasing concerns over carbon emissions and focus on expanding renewable energy capacity.
Regional analysis: Europe accounts for the largest share of the global offshore wind energy market currently due to supportive government policies and investments in countries like the UK, Germany and Denmark. Asia Pacific is expected to dominate market growth through 2030 with China and Japan emerging as high growth markets in the region.
Key players operating in the offshore wind energy market are Siemens Gamesa Renewable Energy, Vestas Wind Systems A/S, MHI Vestas Offshore Wind, Ørsted A/S, EDP Renewables, RWE Renewables, Equinor ASA, China Three Gorges Corporation, Envision Energy, Goldwind Science and Technology Co., Ltd. The market is concentrated and dominated by few major players competing on the basis of technological innovations to reduce costs and expand operational efficiency.