GLOBAL FLOATING WIND MARKET & FORECAST REPORT
(2021 – 2034)
This comprehensive 115-page report dedicated to global offshore Floating wind illustrates the growing market opportunities across the supply chain over the next ~15 years including the most active developers, potential market size, pertinent project activity details and other vital metrics illustrated by region and construction timeline.
Over the forecast period analyzing contract awards to 2030 and beyond, Quest has identified projects representing more than 26.2 GW of Floating wind scheduled for commissioning worldwide to 2035, a number that will grow exponentially following the addition of newly sanctioned projects and accelerated commercialization.
Five super-sized Floating offshore wind projects currently ‘Under development’, each ranging between $800 million and $2 billon in CapEx, represent a growing share (7%) of the $96 billion total addressable market of presently identified Under Development, Planned and Possible projects.
Major Report Findings
- Floating wind’s early years were based on pioneering technology that was recognized by only a few ‘developers’, mostly of a utility background. The initial projects to prove the technology, so called ‘Demonstrators’, were undertaken with support of such early adapters. The maturation stage that followed saw entry of large ‘offshore energy’ companies and large ‘traditional’ onshore and offshore wind developers with long histories in project development – a process that very much continues.
- We observe that moving forward, Developers are mainly de-coupled from technology and now start each early development project with an agnostic-based technology approach; this results in each company working with a variety of Floater designs and designers as illustrated in our reports’ section 5.0 featuring an infographic of “Developers’ Floater Technology DNA”.
- The offshore Floating wind industry has come a very long way in just a few years delivering new floater designs, scaled Demonstrators, Pre-Commercial projects and new players. Floating wind is a young industry with 15 units currently online representing nine projects and a decade of work. Equinor has designed and developed six of these while Aker Offshore Wind / Principle Power have deployed four, Ideol two and one design each for IHI, Mitsui and Toda, installed off Japan. The wind industry continues to deliver value to enhance wind’s cost competitiveness and efficiency with steady improvements in the Levelized Cost of Electricity (LCoE). Since 2016, offshore wind particularly has pushed LCoE reductions well in excess of 60%.
- As illustrated in the report’s figures, the offshore Floating wind market to 2035 is sizeable representing $96 billion in CapEx for forecast wind power capacity additions of 26,207 MW to be powered by 2,656 Floating Turbine Units (FTUs).
- Worldwide spending by supply chain segment over the forecast period consist of $36.4 billion for Turbines, $22.5 billion for Substructures, $14.7 billion for Mooring Systems, $11.6 billion for Subsea Power Cables and over $2 billion in Installation activities.
- The Floating opportunity pipeline continues to gain momentum. A year-over-year comparison (Jan. 2021 vs. Jan. 2020) to our Floating wind outlook reveals Double Digit increases to the Project Opportunities Pipeline. Number of Projects are up 61% while the total number of Units have risen by 25% and Total MW have gained 14%.
- Current tenders for commercial-scale Floating offshore wind farms, in a number of key regions, are accelerating the potential for rapid growth. As an example, the ongoing ScotWind seabed licensing round will include a carve-out for floating projects in Scottish waters. ScotWind awards are expected to be announced during the first half of 2021. It is estimated that 10 new sites will eventually be chosen for wind farm developments.
- A year-over-year comparison to the global opportunity pipeline sees gains of nearly $33 billion in CapEx with new Floating Wind projects surging in Asia Pacific and Northern Europe with CapEx gains of $19 billion and $17 billion, respectively. In Asia, there are nearly 6 GW of projects earmarked for South Korea alone led by these Developers: TOTAL Energies, Ocean Winds/Aker Offshore Wind, Equinor, MOTIE and Shell/CoensHexicon.
- According to Quest FWE’s proprietary Q Vision database, near-to-medium-term projects account for 1,000 cumulative Floating units with about 750 projected to be online between 2025-2026; CapEx is led by Asia/Pacific with $25.2 billion, Northern Europe with $11.3 billion, USA-Pacific with $6.2 billion, Southern Europe with $2.4 billion and USA-Atlantic $300 million.
- Over the long-term, Floating wind is projected to become a critical component of the energy mix. The pace and rhythm of this nascent market is profound, with upward projections of potentially 180 GW of installed capacity by 2050, comprising nearly 13,000 floating turbine units.
Our accelerated Energy Transition is being led from more aggressive stated Net Zero carbon emissions goals coupled with more influential economic and political factors along with shifts in societal preferences. This is matched by a corresponding increase in the role of renewable energy as the world increasingly electrifies. Environmental, Social and Governance (ESG) are drivers influencing our energy transition. In line with that, 2020 has been the year of aggressive commitments to Net Zero carbon emissions by 2050 for a large swath of companies. This group has been led by Europe’s largest integrated oil companies —Shell, BP, TOTAL Energies and Equinor. This group remains at the forefront of their peers, and they are transparent about transitioning to cleaner energy in the future.
What does the energy transition mean to us?
- The scale of this shift varies significantly across the three scenarios (Rapid, Net Zero and Business-as-usual) outlined in BP’s Energy Outlook – 2020 edition. In ‘Rapid” (according to report), renewable energy sees increasing share towards 50% while the share of hydrocarbons in primary energy are shown declining to around 40% by 2050.
- The global energy transition to a lower carbon footprint presents many opportunities across industries to tackle new challenges through innovation and applied technology. Renewables are set to penetrate the global energy system more rapidly compared to any other fuel in history.
- Renewables led by wind, offshore wind and solar are growing exponentially and delivering bigger capacities and cheaper economic solutions.
- Cheap renewable energy and batteries are remaking electricity systems globally and will take a growing share of power generation from fossil fuels which could reach parity well before 2050. Modern natural gas power plants can provide the flexibility needed to integrate more renewables into the grid.
- Wind energy is a growing form of cheaper energy supply in many markets. According to the Global Wind Energy Council, wind capacity installations continue to outpace new fossil fuel capacity in multiple mature and emerging markets. In 2020, there were 5.2 GW of newly added global capacity additions for offshore wind (Bottom-fixed and Floating) bringing the total installed offshore wind capacity in operation to 32.5 GW.
- The IEA’s World Energy Outlook sees increased spending on offshore wind power projects through 2040 benefiting in part from the decline in offshore oil investments under their Sustainable Development Scenario.
- In 2020, according to the IEA, the OECD region as a whole produced its highest share of electricity from natural gas at 30% closely followed by renewable sources at 28%, coal 19%, nuclear 17% and oil 5%.
- In 2020, renewable energy’s share in global power markets increases substantially, an amount five and seven times greater than the overall increase in primary energy.
- By 2040, the IEA projects total offshore wind energy generated electricity to reach 2,072 TWh in the Sustainable Development scenario At the same time, long-term projections indicate that cumulatively installed offshore wind capacity worldwide will reach 562,000 MW.
- Advanced technology will continue to be an enabler for wind energy. Digitalization shows great potential for its ability to transform the power sector by offering demand-side flexibility including opportunities to integrate power sources. Digital technologies and Artificial Intelligence can also aid-in reduced TotEx and drive lower operation and maintenance costs in large wind parks.
- Pundits’ projections for onshore wind indicate over 50 GW of installed wind capacity on an annual basis in addition to more than 40 GW of offshore wind capacity additions each year in the Sustainable Development Scenario. Quest Floating Wind Energy has identified projects representing more than 26.2 GW of Floating wind scheduled for commissioning worldwide to 2035, a number that will grow exponentially following the addition of newly sanctioned projects and their accelerated commercialization