Offshore wind has its best record ever and is preparing for a "new era of growth". In these terms, GWEC, the Global Wind Energy Council, has presented its 2022 offshore balance sheet, which includes all the key data (in offshore wind key) for the year 2021, a year in which the sector has connected to the grid no less than 21,100 megawatts of new offshore power, three times more than in 2020 (never before has the sector installed as much offshore power in twelve months as it has done in 2021). But this is only the beginning, because, according to the GWEC report, all forecasts point to 2022 once again being a top year on a global scale: "a record-breaking year for offshore wind growth globally". What's more: according to the Offshore Wind Report 2022, the sector is already preparing to burst all its seams, all its records, for a new era: "preparing for a new era of dramatic growth". It is doing so, to begin with (but not only), encouraged by the commitments announced by governments from all latitudes. The United States, Vietnam, Colombia and Denmark have in recent months raised their offshore wind ambitions in the context of the fight against climate change and, at the same time, driven by the "new" major threat to international security: energy dependence on unstable nations.
Whether the driving force behind this ambition is one (climate change) or the other (Putin's gas), the fact is that the growing ambition (growing in all latitudes) is unmistakable. For example? Denmark, Belgium, the Netherlands and Germany have just set their Offshore Wind Target 2050 at 150,000 megawatts. A joint objective, a written commitment in the Esbjerg Declaration, signed just a few weeks ago by the German Chancellor, Olaf Scholz; the Belgian Prime Minister, Alexander De Croo; his Danish counterpart, Mette Frederiksen; and the Dutch Prime Minister, Mark Rutte, in the presence of the President of the European Commission, Ursula von der Leyen, in the Port of Esbjerg (Denmark).
[Below these lines, see how the power installed offshore in 2021 (21,106 megawatts) more than triples the power installed in 2020 (6,852 MW)].
GWEC's 2022 Report cites the UK, Vietnam, Colombia and Brazil, among others. The British government, for example, has raised its 2030 Offshore Target by 20%, which yesterday was set at 40,000 megawatts, and today stands at 50,000 MW. In Colombia, the recently published Offshore Wind Roadmap sets the country's offshore wind potential at 50,000 megawatts. GWEC cites in its report the first major project in sight: the developer Copenhagen Infrastructure Partners and Alumbrado Público de Barranquilla have signed a memorandum of understanding to implement a 350 MW wind farm in the Colombian Caribbean that will supply electricity for the production of green ammonia.
Vietnam - the GWEC report also notes - has also increased its offshore ambition in its Development Plan 8, following the Glasgow Climate Summit (CoP26), which took place last November. The offshore wind target set in the first draft of this Plan was 2,000 megawatts. The latest known draft, dated April, multiplies this figure by 3.5 to 7,000 megawatts in Vietnamese waters.
In North America, the targets set by the different U.S. states have increased by a total of 28.6% in the last twelve months, according to GWEC, to around 50,000 megawatts at the date of publication of this report.
[Below, on the right, installed capacity in 2021, by country, and below, by region.]
Twice that, 100,000 megawatts, is on the waiting list at the Brazilian Institute of Environment and Renewable Natural Resources (Ibama). The registered projects now total that amount (100,000 MW) while awaiting environmental assessment by the Brazilian administration, which is also making progress - explains the GWEC report - in regulating the sector, specifically in the regulations to be fine-tuned before the end of the year through the development of Decree 10,946/2022.
Australia is another focus of marine development. The island continent has just increased its climate-energy ambition. The new Labor government, fresh from the polls, has raised its emissions reduction targets from the -26% set by its predecessor to the current -43% by 2030 and has brought forward net zero in ceodes by fifteen years (to 2035, when it was previously set for 2050). Particularly noteworthy in the country is the case of the government of the province-state of Victoria, which has set an offshore wind target of 9,000 megawatts by 2040, with the aim of having the first installation operational by 2028. The Australian offshore concession procedure for prospective developers is already underway.
Not surprisingly, GWEC has also raised its 2030 forecast by 45,300 megawatts, up 16.7% from a year ago.
Ben Backwell, CEO of GWEC: "2021 has been an amazing year for the offshore wind sector. Governments around the world are already recognizing the unique opportunity that offshore wind development presents for clean, affordable, security-of-supply energy that also drives industrial development and job creation. Now what we need to do is to work quickly on implementing targets and ambitions, while developing a robust supply chain ready for this coming growth."
"At the same time, the wind industry needs to embrace its role as a key custodian of ocean ecosystems, in that it is set to become one of the most important offshore industries in the world. We must work with marine stakeholders and communities to ensure that growth occurs within a framework of holistic cooperation and planning that ensures the highest levels of harmony with biodiversity protection and conservation objectives. I am confident that if we work together we can develop a secure energy system capable of delivering electricity while helping the world reach net zero in ceodos."
The Global Offshore Wind 2022 Report estimates that government targets added today, on a global scale, should take the world to 370,000 megawatts of offshore power by 2031, very close to the target set (380,000 MW) in the Global Offshore Wind Energy Compact signed in September 2021 by the Council itself and the International Renewable Energy Agency (Irena). '
[Below, on the right, cumulative offshore wind power capacity at the end of 2021, by country, and below, by region].
To achieve this objective, GWEC explains, an enabling framework is absolutely essential. A framework that, according to the Global Wind Energy Council, involves (1) ensuring that the concessions of maritime space in which to execute the installations are approved in due time and form, at the necessary pace; and (2) ensuring that the procedures are sufficiently agile (so that the cruising speed is the one needed to achieve this objective) and that the processes are "more efficient": for example, administrations must ensure that auctions are designed in such a way that they produce prices that recognize not only the economic value of the kilowatt-hour generated, but also the social and environmental value of offshore wind.
In that sense, and according to GWEC, it is also "essential" that governments and the private sector work hand in hand to "ensure the existence of a well-functioning global supply chain that is capable of scaling up rapidly over the course of this decade to adequately meet the growth that is coming. Right now," warns the Global Council, "the health of the supply chain faces the risk of inflation: rising prices for raw materials, supplies and logistics. And it is doing so at a very delicate moment, which combines two antagonistic trends: (1) plummeting prices (competition in the sector is brutal and some prices resulting from some auctions have been very low, according to many industry players) and (2) an unprecedented rise in demand.
According to GWEC, inaction may jeopardize the opportunity for offshore wind to drive the energy transition on a large scale, while creating local employment, boosting national economies and reducing energy prices, and at the same time becoming a guarantor of supply, an endogenous agent "independent" of exogenous flows.
Ulrik Stridbæk, Vice President and Head of Regulatory Affairs at Ørsted: "The global offshore wind industry is at a critical turning point. On the one hand, we recognize that political ambitions have grown exponentially. But on the other hand, the industry is facing rising costs and supply chain disruptions that jeopardize its long-term ability to realize those goals. The publication of the Global Offshore Wind Report 2022 marks the crucial moment when we must take stock and begin to discuss how to address these challenges and enable the investments needed for offshore wind to play its role in keeping global temperatures below +1.5°C."
The year 2021 has been a watershed year. The sector has connected more power to the grid than ever before: up to 21,100 megawatts offshore have been plugged in, three times more than just a year earlier. Thus, at the end of the year there were 56,000 megawatts of installed wind power in the world's offshore waters (7% of total global wind power now resides offshore). China has been, for the fourth consecutive year, the world's offshore wind locomotive (80% of the connected power has been in its waters, almost seventeen gigawatts). Europe has installed just over three gigawatts (3,000 megawatts): United Kingdom, 2,300 MW; Denmark, 605 megawatts; Netherlands (392) and Norway (3.6).
By nation, Vietnam has stood out in Asia for its frenetic activity. Up to 779 megawatts have been installed by the small Southeast Asian nation in intertidal waters (waters located between the low and high tide limits). Almost as many megawatts (779) as those installed on land in 2021 in Spain, which is the fifth largest wind power in the world (last year 842 megawatts were installed here). Thus, with China, Vietnam, Taiwan (109 MW connected in 2021) and some other nations on that continent, GWEC estimates that by the end of 2022 the Asia-Pacific region will overtake Europe, for the first time in history, in terms of cumulative installed capacity.
But 2021 was not only a turning point in quantitative or geographic terms. It was also a turning point in qualitative terms. According to the Global Wind Energy Council, floating offshore wind technology has crossed the threshold of the "demonstration phase" to finally enter the "pre-commercial phase". Up to 57 megawatts of floating power will have been installed worldwide by 2021 (a total of 121 megawatts of floating capacity are currently in operation). In this case there is also another unique circumstance: Europe (and not Asia) is the leader in floating wind power. 48 of the 57 megawatts connected have been in British waters. To these have been added (in 2021) 5.5 in China and 3.6 in Norway.
Lookingahead to the future
But the Global Offshore Wind Report 2022 not only takes a snapshot of the sector in the present. It also includes ten-year forecasts. Specifically, it estimates that in 2031 there could be some 315,000 megawatts more in the world than there are now, so that at the beginning of the next decade we would be in the vicinity of 370,000 (370 gigawatts, GW). This would require the sector to install more than double (about 54.9 GW) of what it is installing now (21.1).
And this is where floating offshore wind, which is already on the verge of development and evolution, could provide that extra acceleration. In this regard, GWEC has raised its floating wind forecasts for 2030 by 14% (compared to those made just a year ago) in light of the increased floating wind targets announced in the United Kingdom and also in light of the accelerated development being experienced by several floating projects in Europe, Asia and North America (regions that have raised the floating portfolio of future projects to 120 gigawatts). More specifically, the Council considers it "likely" that nearly nineteen gigawatts will be built worldwide between now and 2030, of which eleven gigawatts (11 GW) would be in European waters, 5.5 in Asian waters and the rest off the coast of North America.
What's more, GWEC's Market Intelligence division has identified 700,000 megawatts (700 gigawatts) worth of projects around the world "at different stages of development" (120 of them, as mentioned, are floating).
Finally, the report provides the latest industry news: right now there are - according to GWEC data - up to 23,000 megawatts of offshore wind power "under construction". Europe is currently the most dynamic market, with a share of 49.5% of the total. This is followed by Asia with 46.4% and the Americas with 4.1%. By country, China tops the ranking with 7.8 gigawatts "under construction", followed by the United Kingdom (5.6), the Netherlands (2.3), Taiwan (2.1), France (1.4) and Germany (1.1).
TheGlobal Wind Energy Council defines itself as an "organization that represents the entire wind energy sector". The Global Wind Energy Council boasts, among its more than 1,500 members, "companies, organizations and institutions from more than eighty countries, including manufacturers, developers, component suppliers, research institutes, national wind and renewable energy associations, electricity suppliers, and finance and insurance companies."
Global Offshore Wind Report 2022