Per a Global Wind Energy Council (“GWEC”) report, the outlook for the global offshore wind market looks promising over the long term as governments raise their target levels and new countries join the market. The GWEC report indicates that over 205 gigawatts (“GW”) of new offshore wind capacity will be added over the next decade. Three-quarters of this new volume will be installed in the latter half (2025-2030) of the decade. Therefore, COVID-19 is hardly going to have any impact on offshore wind additions in this decade.
Per the findings of GWEC, the global offshore wind market is expected to expand annually at a rate of 18.6% till 2024 and thereafter 8.2% annually up to the end of the decade. As a consequence, new annual global offshore wind installations are expected to touch 31.9 GW in 2030 from 6.1 GW in 2019.
What’s Driving the Space?
Offshore wind speed is generally much stronger and consistent when compared with onshore wind speed, a primary reason for rising popularity of offshore wind installations across the globe. Strong winds are essential for efficiently operating the large wind blades that support the wind turbines
Other reasons behind strong growth of the offshore wind market are support from the governments, emission-less affordable energy solution for industrial development, lower cost of installation of offshore wind assets thanks to research and development, and clean power produced from offshore assets supporting the high-voltage mainland grids.
The global offshore wind markets offer ample opportunity to operators who are willing to grab it. Asian countries like Taiwan, Japan, South Korea and Vietnam have ambitious plans of adding clean offshore wind assets over the next decade. Among these countries, South Korea aims to add 12 GW of new offshore wind capacity to meet its 2030 renewable energy target. This has opened up opportunities for operators like TOTAL SE (TOT - Free Report) and Equinor ASA (EQNR - Free Report) among others to assist South Korea and benefit from the massive demand in South Korea.
Equinor ASA currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The report from American Wind Energy Association (“AWEA”) indicates that the United States’ shores possess potential of more than 2,000 GW, nearly double the nation's current electricity use. So, there exists a huge potential for offshore wind assets development in the United States and utilities are gradually focusing on the same.
Per AWEA, as of the end of April 2020, the U.S. offshore wind pipeline totaled more than 26 GW in federal lease areas. Out of the current projects in the United States, 15 offshore wind projects, totaling 10,603 MW, will be commissioned by 2026 as per GWEC. Utilities like Dominion Energy (D - Free Report) and AVANGRID Inc. (AGR - Free Report) , among others, have taken initiatives to develop offshore wind projects in the United States.
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