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offshore wind

Inversión mundial en capacidad renovable, 2004 a 2019. Las cifras representan la financiación de activos a escala comercial de nuevos proyectos eólicos, solares, de biomasa y de valorización energética de residuos, geotérmicos, pequeña hidroeléctrica y marina, además de sistemas solares a pequeña escala. Los totales de años anteriores se han revisado en esta ronda para reflejar nueva información. Fuente: BloombergNEF. / Global renewable energy capacity investment, 2004 to 2019. The figures represent utility-scale asset finance of new wind, solar, biomass and waste-to-energy, geothermal, small hydro and marine power projects, plus small-scale solar systems. Prior years’ totals have been revised in this round, to reflect new information. Source: BloombergNEF.

Investment in renewable energy capacity worldwide was $282.2 billion last year, up 1% from 2018’s $280.2 billion, with the world’s biggest market (China) slipping back, but its second-largest (the U.S.) hitting a new record. The latest data from BloombergNEF (BNEF) show how what had been a subdued first few months of 2019 gave way to a busier second half, with the highlights including U.S. onshore wind and, in particular, offshore wind in China and Europe.

The late surge in offshore wind financings took capacity investment in that sector to $29.9 billion, up 19% on 2018 and $2 billion more than in the previous record year of 2016. Among the offshore projects reaching financial close in the fourth quarter were the 432 MW Neart na Gaoithe array off the Scottish coast at $3.4 billion, the 376 MW Formosa II Miaoli project off Taiwan at $2 billion and the 500 MW Fuzhou Changle C installation in the East China Sea, at $1.5 billion. The first of France’s offshore wind projects to be financed, the 480 MW, $2.5 billion Saint Nazaire, got its go-ahead in the third quarter (1).

Offshore wind developers in China brought forward 15 projects to beat a scheduled expiry of that country’s feed-in tariff. BNEF expects the sector’s global momentum to continue in 2020, with the focus on gigawatt-scale projects in the British North Sea and the first commercial arrays off the U.S. East Coast.

Looking at the overall renewable energy capacity investment figures for 2019, wind (onshore and offshore) led the way with $138.2 billion globally, up 6%. Solar was close behind, at $131.1 billion, down 3%. Falling capital costs in wind and solar meant that the two combined are likely to have seen around 180 gigawatts added last year, up some 20 GW on 2018.

Among the smaller sectors, biomass and waste-to-energy saw $9.7 billion of capacity investment in 2019, up 9%. Geothermal languished on $1 billion, down 56%. Biofuels were down 43% at an estimated $500 million, and small hydro 3% lower at $1.7 billion (2).

China was yet again the biggest investor in renewables, at $83.4 billion in 2019, but this was 8% down on 2018 and the lowest since 2013. It saw a 10% rise in wind investment to $55 billion, but solar fell 33% to $25.7 billion, less than a third of the boom figure reached in 2017.

The U.S. was the second-largest investing country in renewable energy capacity, at $55.5 billion, up 28% on 2018. Instrumental in this was a rush by wind and solar developers to qualify for federal tax credits that were due for scale-back in 2020. It’s notable that in this third year of the Trump presidency, which has not been particularly supportive of renewables, U.S. clean energy investment set a new record by a country mile. The second-highest year for investment ($45.7 billion) came in Trump’s first year, 2017. These technologies are more cost-competitive than ever, and the fact that there was a tax credit step-down on the horizon made the market particularly busy in 2019.

Europe slipped behind the U.S. in 2019, investing $54.3 billion in renewables capacity, down 7%. Spain led the way with $8.4 billion, up 25% on 2018 and the highest annual figure for that country since 2011. The $6 billion of solar investment in Spain in 2019 is impressive because these projects are going ahead at record-low costs per megawatt. Developers are building PV plants on the back of low tariffs agreed in government-run auctions or, increasingly, without any subsidy support at all.

The U.K. invested $5.3 billion, down 40% and its lowest since 2007. Germany was down 30% at $4.4 billion, its lowest since 2004, and Sweden was down 19% at $3.7 billion, but the Netherlands were up 25% at $5.5 billion, France 3% higher at $4.4 billion, and Ukraine 56% up at $3.4 billion.

Japan invested $16.5 billion in renewable capacity, mainly solar, in 2019, down 10%, while Australia committed $5.6 billion, down 40%. India put $9.3 billion into green energy, 14% less than in 2018, while the United Arab Emirates invested a record $4.5 billion – almost all of it for the 950 MW Al Maktoum IV solar thermal and photovoltaic complex in Dubai.

In Latin America, Brazil lifted renewable energy capacity investment by 74% to $6.5 billion last year, while Mexico committed $4.3 billion, up 17%, and Chile $4.9 billion, up fourfold, and Argentina $2 billion, down 18%.

BNEF’s wider-definition of total clean energy investment, which includes money going into research and development, and into specialist companies via public market share issues and venture capital and private equity deals, was $363.3 billion in 2019, fractionally up on the previous year’s revised $362.5 billion. This definition includes not just renewable energy, but also companies involved in other low-carbon activities such as energy efficiency, smart meters, energy storage and electric vehicles.

Within this total, public markets invested $9.3 billion in clean energy, 13% less than in 2018, while VC/PE investors put in $10.5 billion, up 6% and their highest figure since 2010. U.S. electric car companies accounted for the biggest deals in both categories: Tesla with an $862.5 million public market secondary issue, and Rivian Automotive with a $1.3 billion private equity round.

Corporate and government research and development in wider-definition clean energy totaled $45.7 billion in 2019, up 1%.

(1) Some of the project capital cost figures in this release are estimates.
(2) BNEF investment figures exclude hydro-electric dams of more than 50 MW.

Source: BloombergNEF (BNEF)

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The EU Commission’s big goals for offshore wind – between 230 and 450 GW by 2050 – are achievable provided the right investments in electricity grids and Governments take the right approach to maritime spatial planning. That’s the conclusion of a new WindEurope report ‘Our energy, our future’ released at Offshore 2019 in Copenhagen. The report is a remit from the Energy Ministers of the 10 ‘North Seas’ countries who coordinate their work on offshore wind with each other and the Commission.

The report examines where 450 GW of offshore wind could be deployed most cost-effectively around Europe, bearing in mind there is only 20 GW today. 450 GW of offshore wind is part of a European Commission scenario to deliver climate neutrality by 2050.

The report concludes that 212 GW should be deployed in the North Sea, 85 GW in the Atlantic (including the Irish Sea), 83 GW in the Baltic, and 70 GW in the Mediterranean and other Southern European waters. This reflects the relative wind resources, proximity to energy demand and the location of the supply chain. The report also breaks down how would each country would deploy in an optimal scenario. The 380 GW that would deployed in Northern European waters would require less than 3% of the total space there.

The report considers how much it would cost to build these large volumes of offshore wind. It shows how maritime spatial planning is key to minimise costs. In at least 60% of the North Seas it is not possible to build offshore wind farms today.

These “exclusion zones” exist either for environmental reasons or because space is set aside for fishing, shipping and military activity. They mean we can only build less than a quarter of the required volumes at very low cost – below €50/MWh. But with a different approach to maritime spatial planning, with climate change at its heart, we could build much more at these prices – and benefit fully from the spectacular cost reductions achieved in recent years. Multiple use, e.g. allowing certain types of fishing in offshore wind farms, would really help.

Building 450 GW offshore wind by 2050 requires Europe to install over 20 GW a year by 2030 compared to 3 GW today. The industry is gearing up for this, but it’s crucial that Governments provide visibility on volumes and revenue schemes to give long-term confidence for the necessary investments.

Governments should also anticipate this significant growth in offshore wind in their planning for both offshore and onshore grid connections. Not least since there is a 10-year lead time on planning and building the grids needed for offshore wind. Offshore grid investments will need to rise from less than €2bn in 2020 to up €8bn a year by 2030.

Europe also needs to provide a regulatory framework for offshore wind farms that have grid connections to more than one country. These “hybrid” projects will enable us to pool assets and infrastructure and reduce costs.

Capital expenditure on offshore wind including grids will need to rise from around €6bn a year in 2020 to €23bn by 2030 and thereafter up to €45bn.

Source: WindEurope

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Este mapa muestra la tecnología con el LCOE de referencia más bajo en cada mercado, excluyendo subsidios o créditos fiscales. CCGT: turbina de gas en ciclo combinado / This map shows the technology with the lowest benchmark LCOE in each market, excluding subsidies or tax credits. CCGT: Combined-cycle gas turbine. Fuente/Source: BloombergNEF.

Every half year, BloombergNEF runs its Levelized Cost of Electricity (LCOE) Update, a worldwide assessment of the cost-competitiveness of different power generating and energy storage technologies – excluding subsidies. BNEF latest Levelized Cost of Electricity (LCOE) figures show a global benchmark LCOE for onshore wind and PV projects at $47 and $51/MWh. The numbers are down 6% and 11% respectively from six months ago, mainly owing to cheaper equipment. The offshore wind LCOE benchmark sits at $78/MWh down 32% from from last year.

These are the key, high-level results for the second half of 2019:

New solar and onshore wind power plants have now reached parity with average wholesale prices in California and parts of Europe. In China, their levelized costs are now below the average regulated coal power price, the reference price tag in the country. These technologies are winning the race as the cheapest sources of new generation with two-thirds of the global population living in countries where PV or wind are cheaper than coal and gas power plants.

BNEF’s global benchmark levelized cost figures for onshore wind and PV projects financed in the last six months are at $47 and $51/MWh, down 6% and 11% respectively compared to the first half of 2019. For wind this is mainly due the fall in the price of wind turbines, 7% lower on average globally compared to the end of 2018. In China, the world’s largest solar market, the capex of utility-scale PV plants has dropped 11% in the last six months, reaching $0.57 million per MW. Weak demand for new plants in China has left developers and engineering, procurement and construction firms eager for business, and this has put pressure on capex.

BNEF estimates that some of the cheapest PV projects financed recently will be able to achieve an LCOE of $27-36/MWh, assuming competitive returns for their equity investors. Those can be found in India, Chile and Australia. Best-in-class onshore wind farms in Brazil, India, Mexico and Texas can reach levelized costs as low as $26-31/MWh already.

Offshore wind has seen the fastest cost declines, down 32% from just a year ago and 12% compared to the first half of 2019. BNEF’s current global benchmark LCOE estimate is $78/MWh. New offshore wind projects throughout Europe now deploy turbines with power ratings up to 10 MW, unlocking capex and opex savings. In Denmark and the Netherlands, we expect the most recent projects financed to achieve $53-64/MWh excluding transmission.

Source: BNEF

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Offshore wind power will expand impressively over the next two decades, boosting efforts to decarbonise energy systems and reduce air pollution as it becomes a growing part of electricity supply, according to an International Energy Agency report recently published.

Offshore Wind Outlook 2019 is the most comprehensive global study on the subject to date, combining the latest technology and market developments with a specially commissioned new geospatial analysis that maps out wind speed and quality along hundreds of thousands of kilometres of coastline around the world. The report is an excerpt from the flagship World Energy Outlook 2019, which will be published in full on 13 November.

Offshore wind currently provides just 0.3% of global power generation, but its potential is vast. The IEA finds that global offshore wind capacity may increase 15-fold and attract around $1 trillion of cumulative investment by 2040. This is driven by falling costs, supportive government policies and some remarkable technological progress, such as larger turbines and floating foundations. That’s just the start – the IEA report finds that offshore wind technology has the potential to grow far more strongly with stepped-up support from policy makers.

Europe has pioneered offshore wind technology, and the region is positioned to be the powerhouse of its future development. Today, offshore wind capacity in the European Union stands at almost 20 GW. Under current policy settings, that is set to rise to nearly 130 GW by 2040. However, if the European Union reaches its carbon-neutrality aims, offshore wind capacity would jump to around 180 GW by 2040 and become the region’s largest single source of electricity.

An even more ambitious vision – in which policies drive a big increase in demand for clean hydrogen produced by offshore wind – could push European offshore wind capacity dramatically higher.

China is also set to play a major role in offshore wind’s long-term growth, driven by efforts to reduce air pollution. The technology is particularly attractive in China because offshore wind farms can be built near the major population centres spread around the east and south of the country. By around 2025, China is likely to have the largest offshore wind fleet of any country, overtaking the United Kingdom. China’s offshore wind capacity is set to rise from 4 GW today to 110 GW by 2040. Policies designed to meet global sustainable energy goals could push that even higher to above 170 GW.

The United States has good offshore wind resources in the northeast of the country and near demand centres along the densely populated east coast, offering a way to help diversify the country’s power mix. Floating foundations would expand the possibilities for harnessing wind resources off the west coast.

The huge promise of offshore wind is underscored by the development of floating turbines that could be deployed further out at sea. In theory, they could enable offshore wind to meet the entire electricity demand of several key electricity markets several times over, including Europe, the United States and Japan.

Governments and regulators can clear the path ahead for offshore wind’s development by providing the long-term vision that will encourage industry and investors to undertake the major investments required to develop offshore wind projects and link them to power grids on land. That includes careful market design, ensuring low-cost financing and regulations that recognise that the development of onshore grid infrastructure is essential to the efficient integration of power production from offshore wind.

Industry needs to continue the rapid development of the technology so that wind turbines keep growing in size and power capacity, which in turn delivers the major performance and cost reductions that enables offshore wind to become more competitive with gas-fired power and onshore wind.

What’s more, huge business opportunities exist for oil and gas sector companies to draw on their offshore expertise. An estimated 40% of the lifetime costs of an offshore wind project, including construction and maintenance, have significant synergies with the offshore oil and gas sector. That translates into a market opportunity of USD 400 billion or more in Europe and China over the next two decades.

Source: IEA

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Siemens Gamesa Renewable Energy today held a launch ceremony with local government authorities and wind industry partners in Taiwan for what will be the company’s first offshore nacelle assembly facility outside of Europe. Construction is due to begin in 2020 at the site located in the port of Taichung. This represents an important milestone for the company in the fast-growing Asia-Pacific region. Siemens Gamesa currently has offshore nacelle assembly and manufacturing facilities in Germany and Denmark.

The parcel of land being developed in Taiwan measures over 30,000 square meters, and will be used for nacelle assembly, testing, warehousing, office buildings, and outdoor storage. Siemens Gamesa is also working closely with Taiwan International Ports Corporation (TIPC) to establish inbound and outbound logistics in newly-established quaysides nearby.

Construction is planned to begin in 2020, and production in 2021. The facility will then support Ørsted’s 900 MW Greater Changhua 1 & 2a project, for which the SG 8.0-167 DD turbine will be used. In later years, it will provide an option for the supply of nacelles to other regional projects.

“Thanks to this nacelle assembly facility, we will be creating more opportunities of working with the growing localized supplier network as well as developing a skilled offshore workforce. All these efforts will contribute to building a competitive local supply chain, in line with international standards in terms of safety, costs, quality, and making Taiwan a leading offshore market,” says Niels Steenberg, General Manager of Siemens Gamesa Offshore for Asia-Pacific.

The long-term collaboration between SGRE and TIPC was first officialized in December 2017 via a Memorandum of Understanding. Both parties agreed to cooperate towards developing Taichung harbor for the offshore wind power industry.

In 2016, Siemens Gamesa erected Taiwan’s first two offshore turbines composing the 8 MW Formosa 1 Phase 1 project. The company is currently installing the subsequent phase, the 120 MW Formosa 1 Phase 2 project. This is Taiwan’s first commercial-scale offshore wind power project, and features 20 SWT-6.0-154 wind turbines. Siemens Gamesa has signed contracts in Asia Pacific for close to 2 GW of offshore wind power projects for the years to come, including 1.5 GW of confirmed orders.

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CoreMarine and CENER (National Renewable Energy Centre of Spain) have signedof a consortium agreement to promote engineering services to the floating offshore wind industry. This collaboration will combine their expertise in a one-stop shop for the development of floating wind projects.The combined offering will support projects from research and FEED studies, to simulation of components, detailed engineering and installation support.

Specifically, the agreement focuses on floating foundation design, mooring and dynamic cable analysis, transport & installation, wind turbine modelling, coupled analysis and scale model testing. Both entities have recognized the need to address the specific concerns and needs of the emerging floating wind industry.

As far as we can see, this is the first offering to the floating wind market from front end engineering and model testing through to detailed design and installation. This is a first for the industry and represents a significant strengthening of our capabilities in the floating wind sector”, says Carlos Lopez, director of CoreMarine Spain.

Additionally, Antonio Ugarte, director for the Wind Energy Department at CENER, comments: “Currently it is necessary to implement the latest tools for simulating wind components and validation tests in industrial processes. The alliance between CoreMarine and CENER makes it possible to combine precisely the engineering processes with the most advanced methods for the design, construction, transport and installation of innovative solutions for offshore wind energy”.

Over recent years both CoreMarine and CENER have made their commitment to floating offshore wind and have gained extensive know-how and experience in the engineering, design and validation of floating structures. This agreement solidifies and strengthens the commitment of both entities and provides added value to this emerging industry.

Source: CENER

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GWEC Market Intelligence has released its updated market outlook concluding that an additional 330 GW of wind energy capacity will be installed from 2019 to 2023, an increase of 9 GW from its market outlook published in Q1 2019. Main markets driving this volume increase are the US and Chinese onshore markets, which will both experience an installation boom over the next two years with 6.5 GW and 10 GW added capacity respectively from the Q1 2019 market outlook. The growing role of offshore wind in the global energy transition is a major reason for boosting overall growth, and will make up approximately 18% of total wind energy capacity by 2023, up from 9% in 2018. The continued growth of wind energy globally will be driven by the increasing cost competiveness of wind energy as well as market-based mechanisms such as auctions, tenders, and bilateral PPAs.

According to the updated market outlook released by GWEC Market Intelligence, an additional 330GW of new wind energy capacity will be added to the global energy market from 2019 to 2023, bringing total capacity to over 900 GW. The outlook has been increased by additional 9 GW from the outlook published in Q1 2019 in GWEC’s annual Global Wind Report.

From 2019 to 2023, the global wind energy market will grow at an annual rate of 4%, reaching a total capacity of over 900 GW by 2023. This growth rate means that an average of approximately an additional 14 GW will be added each year globally over the next five years compared to 2018 growth levels.

Through analysis of the developments of wind markets across the world, two main trends have been identified that will drive growth beyond 2023; the increasing share of so-called subsidy-free projects, and an increasing number of bilateral PPAs. Together, these two mechanisms will contribute to the cost competitiveness of wind energy and provide assurance for large-scale project development and the continued growth of wind energy globally.

Although there was a decrease in the outlook for India and Germany due to their challenging market conditions including the execution of their auctioned capacity, the growth in other markets more than make up for this deficit. With China going subsidy free by 2021 for onshore wind and the Production Tax Credit phasing out in the US, there will be an installation rush over the next two years in these two leading onshore markets.

The forecasts for emerging markets in Latin America, South East Asia, Africa and the Middle East have all been increased as well due to positive market developments. Additionally, it must be acknowledged the importance of offshore wind for driving growth, as it is set to take off globally over the next few years with a compound annual growth rate of 8% between 2019 and 2023, double that of onshore wind.

Wind energy is now one of the most cost-competitive energy sources available, so it is no surprise we will continue to see volume growth as global energy demand continues to increase. On average, 60 GW of onshore wind and 8-10 GW of offshore wind will be added worldwide until 2023. Even when not considering the two key growth markets of US and China, it will still be seen installation growth levels similar to those of the 2009-2010 wind energy boom in the other markets and regions. Although this outlook is very positive, it is not enough to meet the renewable energy targets needed to keep global warming under 1.5 C°.

Total new installations by year for onshore and offshore wind

2018: 50.12 GW
2019: 71.97 GW
2020: 76.43 GW
2021: 61.32 GW
2022: 62.02 GW
2023: 61.83 GW

Changes by region from Q1 2019 (onshore only)

North America: +6.5 GW
Latin America: +2 GW
Europe: -5.9 GW
Africa and the Middle East: +0.8 GW
Asia Pacific: +5.7 GW

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Ireland is expected to attract massive investment as the country is set to add 5.8 GW of non-hydro renewable power capacity over the next decade to reach a total 9.6 GW by 2030 and account for 65% of the country’s installed capacity, according to the report from GlobalData, “Ireland Power Market Outlook to 2030, Update 2019 – Market Trends, Regulations, and Competitive Landscape”. The report, reveals that to achieve a 9.6 GW non-hydro renewables capacity by 2030 Ireland will massively increase its investment in offshore wind and solar PV capacity.

During the forecast period, offshore wind capacity is set to increase from 25 MW to 1.9 GW at a compound annual growth rate (CAGR) of 48.8%, and solar PV will rise from 25 MW to 1.3 GW at a CAGR of 43%. During the same period, power consumption in Ireland will see a minimal increase, reaching 31.4 TWh in 2030 from 27.9 TWh in 2019 (a marginal 1.1% CAGR).

Ireland’s offshore wind and solar PV capacity, has considerable potential, which will push the contribution of renewable power to installed capacity to 62% by 2025 and 65% by 2030. This will open up new markets for wind turbines and modules for solar plants, as well as associated equipment required for transmitting generated power to the grid. The market for laying cables under the sea will also be a key business opportunity in the country.

This addition to Ireland’s renewable power capacity is being driven by various government incentives and policies intended to fill the void left by the phasing out of coal in 2025.

Renewable capacity expansion will necessitate grid modernization in order to manage much higher volumes of renewable energy with inherent variability. This, in turn, will involve huge investment in grid infrastructure along with the introduction of energy storage systems to enable a steady supply of power when renewable energy is unavailable.

With a minimal increase in power consumption expected, Ireland’s gas-based power capacity, which provides the country’s base-load power demand, combined with those new renewable resources with integrated energy storage systems are well placed to meet the country’s power demands over the next decade.

Source: GlobalData

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The Global Wind Energy Council (GWEC) has launched the first edition of its Global Offshore Wind Report, which provides a comprehensive analysis of the prospects for the global offshore wind market, including forecast data, market-level analysis and a review of efforts to lower costs.

The global offshore market has grown by an average of 21% each year since 2013, reaching total installations of 23 GW. More than 4 GW of new capacity were installed each year in 2017 and 2018, making up 8% of the total new installations during both years. For the first time, China was the largest offshore market in 2018 in new installations, followed by the UK and Germany.

Based on government targets, auction results and pipeline data, GWEC expects to see 190 GW of capacity installed by 2030, but this does not represent the full potential of offshore wind. Many new countries are preparing to join the offshore wind revolution, while floating offshore wind represents a game-changing technological development that can add even more volume in the years to come.

The industry is continuing to make significant strides on cost-competitiveness, with an average LCOE of US$50/MWh within reach. This achievement increases the attractiveness of offshore wind in mature markets where several governments are discussing long-term climate targets that, if they are to be achieved, must seriously consider the contribution large-scale offshore wind can make. New offshore markets represent significant potential and if industry and governments can work together, as we have seen recently in the case of Taiwan, we can build the necessary policy frameworks at greater speed to ensure growth can be achieved sooner than later.

The report, GWEC Market Intelligence, provides a market outlook representing a “business-as-usual” (BAU) scenario which does not incorporate more technical development or further opportunities for offshore wind, and an upside scenario which captures the additional potential.

The BAU scenario expects double-digit growth for the global offshore market based on current policies and expected auctions and tenders. This scenario makes annual installations of 15 to 20 GW after 2025 realistic based on growth in China and other Asian markets, amounting to 165 GW of new installed capacity globally between now and 2030. This would bring the total installed capacity to nearly 190 GW.

The upside scenario captures additional potential such as the advancement of floating technology, increased cost competitiveness and therefore greater volume in mature markets, as well as the opening of new offshore markets. Based on this scenario, a more positive outlook of over 200 GW installed capacity between now and 2030 is possible, totalling approximately 220 GW installed capacity.

  • Europe: Short-term, the European offshore market will remain flat with few projects reaching installation and COD during 2020, however, the cost competitiveness of European offshore will remain a key driver for volume. The Sector Deal in the UK provides a stable outlook, while volumes for Germany have still not increased despite government’s awareness. Total installed capacity for the region under the BAU scenario is expected to be 78 GW by 2030.
  • Asia: The Asian offshore market including China is expected to become the largest offshore region globally with key growth markets including Taiwan, Vietnam, Japan, India and South Korea. Total installed capacity for the region under the BAU scenario is 100 GW by 2030.
  • US: The first installation of large-scale projects, expected between 2021 and 2023, brings total installations to 2 GW by 2025. There is potential for 10 GW total installations towards 2030 with an increasing experience and maturing of the local supply chain.

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The German offshore wind industry, which has been growing for years, currently has almost 24,500 full-time employees in Germany and a total of 9 billion euros of revenue last year. This is the result of a comprehensive analysis in the new wind:research study of more than 3,000 market participants across the entire wind industry (onshore and offshore), all value creation stages and regions. The distribution of the ultimately approx. 800 market participants, who are currently active in offshore wind energy, shows surprising emphases in the south and west: for example, Baden-Wuerttemberg dominates in R&D as well as in engineering and North Rhine-Westphalia in the components area. While maintaining the current expansion target is threatening to cause a loss of more than 8,000 jobs in the industry, increasing the expansion target will increase the number of employees by up to 10,000.

Current analysis of value creation in the offshore wind sector

In the past ten years, offshore wind energy has grown strongly in Germany and has also led to high value creation with high investments. This shows clearly in both the variety of different market participants and in the number of jobs. In 2011, wind:research created a study together with PwC that for the first time comprehensively analysed market participants, employment, overall value creation, and in particular their regional distribution in Germany. Now wind:research has again analysed the value creation and employment of the offshore wind industry in Germany based on the current situation. In addition to the regional distribution – which is specified by federal states and distribution across the different stages of value creation – the focus lies on the future development of the industry.

In the German offshore wind energy industry in 2018, almost 800 market participants with around 24,500 employees generated more than 9 billion euros of revenue. Following major advances in recent years the industry is currently at a crossroads. It is stagnating on the basis of the recently set political conditions, such as the changes to the EEG in 2014 and 2017. Limiting the expansion will have a decisive influence on the further development after 2019 and thus also on the development of market participants as well as their number of employees and revenue – across all stages of the value chain.

Distribution of market participants with surprising priorities

The value creation, both in terms of employee numbers and revenue, is distributed across Germany: there is a high level of employment in Baden-Wuerttemberg (R&D, engineering) and North Rhine-Westphalia (components), while the areas of transport, assembly, project development as well as O&M traditionally are strongly represented in the North of Germany. In contrast, (plant) components are also manufactured in many Western and Southern German locations. Striking is the high proportion of Southern federal states in the area of engineering as well as R&D. The area of financing traditionally focuses on the Frankfurt am Main region. Many market participants from Northern Germany (e.g. wind turbine or foundation production) depend on companies from the engineering or supplier industry (e.g. steel construction, gears, etc.), whose regional focus lies in Southern Germany.

Although, according to the high market anticipation, strong consolidation has occurred, new market players benefit on account of their offer of innovative and technologically advanced products, solutions and services. In addition, new production sites are being built by existing market participants, e.g. for offshore wind turbines in Cuxhaven by Siemens Gamesa Renewable Energy.

Jobs until 2035 – Expansion targets and their effects in three scenarios

Based on the 771 market participants as well as their number of employees and revenue, a decline in the number of employees and a decline in sales in the next few years, due to the slowdown in orders in the German market, is expected in all scenarios. This predicted trend is expected to continue until 2022/23.

Expansion target decisive for the value creation of German offshore wind energy

Of the approx. 1,000 market participants in 2011, just under 800 are still active due to the consolidation. If the current expansion target is not raised, a reduction in the number of employees from around 24,500 (2018) to around 16,000 (2035) has to be expected. The expansion of offshore wind energy in Germany to reach the climate protection targets of the German Federal Government by 2030 (65% target) can generate up to 10,000 additional jobs. Particularly in the scenario “Power-to-X”, in which the dependency of network expansion declines due to the use of new storage technologies and Power-to-X-capacity amongst other causes, the number of employees increases to more than 35,000.

Other countries, such as the United Kingdom and the Netherlands, are actively promoting the expansion of offshore wind energy and are developing industry and value creation. Therefore, a change in the current framework conditions in Germany is necessary in order to avoid falling behind and to maintain or expand its own value creation (market participants, revenue and employment).

Source: wind:research

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