Offshore Wind Investments to reach $102 Billion by 2030: Rystad Energy
Rising Spending : Offshore Wind Energy Investments
Offshore wind energy is the renewable energy created by utilizing the wind’s force on the open seas, where the lack of impediments causes the wind to travel at a higher and steadier speed than on land. Megastructures are put in place that are sat on the seabed and outfitted with the newest technological advancements in order to make the most of this resource. The history of wind turbines explains how did it transform from the early centuries to becoming the modern technology of energy resource. According to IEA report, the global energy industry investments are to hit $2.4 trillion in 2022.
The reliability with which they are able to produce energy is a significant distinction between onshore and offshore wind farms. Notably, compared to their onshore counterparts, offshore wind farms have the ability to produce more power at a steady pace due to greater and more reliable wind speeds. In contrast, when choosing a development location for onshore wind farms, great consideration must be given to wind speed requirements as they may have human and environmental issues such as noise pollution. This reason has led to the reason that offshore wind energy has received tremendous investments across the globe.
With the overall capital expenditure for projects in the sector more than doubling to $102 billion in 2030, global offshore wind energy investments are expected to soar this decade.
As countries worldwide try to switch to cleaner sources of energy like wind and solar energy in an effort to reach their carbon neutrality targets, the push to expand the number of projects and offshore wind energy investments from $46 billion in 2021, the Oslo-based consultant said on Thursday.
The need for renewable energy supplies has increased as nations strive to reach their net-zero targets and address issues of a sustainable future in the face of accelerated climate change and global warming. Even the largest oil producing countries like UAE are to invest in renewable energy. Energy efficiency in UAE is a lead to sustainable future which made Dubai: a sustainable and smart city to live in. Building energy efficiency with smart buildings in UAE is one of the strategies to achieve the goal. Other strategies like the promotion of EVs with low carbon emission, the implementation of power systems engineering, gravity batteries, etc. are also used by the country.
International Energy Agency (IEA) has anticipated that renewable energy capacity would increase more quickly over the next five years, making up over 95% of the increase in the world’s power capacity until 2026.
Regarding the prospective growth of offshore wind energy investments, we can say that wind energy capacity is only behind the solar photovoltaic business. According to a research released in April by the Paris-based agency, worldwide infrastructure expansions for offshore wind are projected to reach 21 gigawatts by 2026, more than tripling the current amount of installed capacity.
By that time, offshore wind energy expansions are anticipated to represent one-fifth of the world’s wind market, which the IEA called a “significant milestone.”
According to Rystad, Europe will continue to be the world leader in offshore wind energy with wind turbine (floating wind turbines) installations and offshore wind energy investments over the next ten years thanks to a large increase in capacity installations. The financial investments in the year 2021 have accounted for up to $53 Billion and it is expected to be tripled by 2030.
Although the Americas have lagged behind in offshore wind energy adoption, this is anticipated to change in the coming years. This year, the region is expected to spend $3.3 billion, up from $700 million in 2017. By 2030, spending is anticipated to be close to $15 billion.
By the end of this decade, the investment will slow down in China, a major player in the offshore wind energy sector. The second-largest economy in the world invested close to $25 billion in 2021, more than double what Europe spent that year. However, it is anticipated that this amount will gradually fall to $7.7 billion in 2030, largely due to the country’s eventual elimination of feed-in tariffs.
The production and installation of turbines and foundations, the two most expensive parts (forged parts) of an offshore wind farm, will account for more than 50% of all capital expenditures made by project developers this decade, according to Rystad. Various types of forging methods like closed or open die forgings are used in the forging industry (forging vs casting) to manufacture these two most expensive forged parts in the power and energy industry. Also, there will be demand for its refurbishment techniques like mechanical seals, abrasive blasting, etc.
With more than 26 gigawatts of operational capacity, or more than 50% of the worldwide total, Europe presently leads the world in terms of the number of installations. According to a Rystad report, “by 2026, Europe is anticipated to have an installed base of over 57 gigawatts, with Danish giant Orsted anticipated to continue to be the region’s largest offshore wind producer.” By the end of 2026, more than 8,500 turbines are anticipated to be in use across Europe.
With a target of 30 gigawatts of operational offshore wind energy, the US is similarly poised for a wave of project commissioning in the years leading up to 2030, although Rystad predicted that the US would fall short of its goal and only put in about 21 gigawatts.