The size of the global offshore wind market reached USD 40.1 billion in 2023 and is projected to exceed USD 100.6 billion by 2030, demonstrating a growth rate of more than 14.0% from 2024 to 2030.
Market Definition:
Offshore wind refers to the generation of electricity from wind turbines erected in bodies of water, typically located off the coastlines of oceans or large lakes. This renewable energy source harnesses the power of wind currents blowing over water surfaces to drive the rotation of turbine blades, which subsequently generate electricity through a connected generator. Offshore wind farms consist of arrays of these turbines strategically positioned in shallow or deep waters, often in areas with strong and consistent wind patterns. The generated electricity is then transmitted through underwater cables to onshore power grids for distribution to homes, businesses, and industries.
Offshore wind offers several advantages compared to onshore wind energy, including higher wind speeds, reduced visual impact, and potentially less interference with land use activities. Additionally, offshore wind farms can be built at larger scales and can tap into vast expanses of untapped wind resources, enabling them to potentially generate more electricity compared to onshore counterparts. Moreover, offshore wind farms have the potential to contribute to energy diversification, enhance energy security, and reduce greenhouse gas emissions, thereby supporting efforts to mitigate climate change and transition towards cleaner energy sources.
Offshore Wind Market Drivers and Trends:
Abundant Wind Resources
Abundant wind resources stand as a paramount driving force propelling the offshore wind market forward. Coastal regions and offshore locations boast a wealth of strong and consistent wind currents, offering a vast and reliable source of renewable energy generation. Unlike onshore wind farms, which may face obstacles such as terrain variations and land use restrictions, offshore wind projects benefit from expansive areas with unobstructed wind flow, allowing for optimal turbine placement and maximum energy capture.
The abundance of wind resources offshore presents a significant opportunity for countries seeking to diversify their energy portfolios and reduce dependence on fossil fuels. Offshore wind farms can harness the power of these abundant resources to generate large quantities of clean electricity, contributing to national energy security and resilience. Moreover, offshore wind energy has the potential to play a crucial role in mitigating climate change by displacing greenhouse gas-emitting energy sources and helping to achieve carbon reduction targets.
Furthermore, the consistent nature of offshore wind resources enhances the reliability and predictability of electricity generation, providing grid operators with a stable source of renewable energy that can help balance supply and demand. This reliability is particularly valuable in regions prone to energy supply fluctuations or facing challenges related to grid stability. As a result, abundant offshore wind resources not only drive market growth but also support the Therefore stability and sustainability of the energy system.
Therefore, abundant wind resources offshore serve as a cornerstone of the offshore wind market, offering a compelling opportunity to harness clean and sustainable energy from the natural forces of wind, while simultaneously addressing energy security, climate change mitigation, and grid reliability objectives.
Scalability and Project Size
Scalability and project size are pivotal driving factors propelling the offshore wind market forward. The inherent scalability of offshore wind projects allows for the development of installations of varying sizes, ranging from smaller-scale projects to massive, utility-scale developments. This scalability enables developers to tailor projects to suit specific energy needs and geographical constraints, while also accommodating future expansion as demand for renewable energy grows.
Large-scale offshore wind projects offer numerous advantages, including economies of scale, which can lead to reduced Therefore costs per unit of energy generated. By leveraging economies of scale, developers can achieve greater efficiencies in manufacturing, installation, and operation, thereby driving down the levelized cost of energy (LCOE) and improving the competitiveness of offshore wind compared to conventional energy sources.
Furthermore, the development of larger offshore wind projects allows for the maximization of available wind resources in optimal locations. By harnessing strong and consistent offshore winds over expansive areas, these projects can achieve higher capacity factors and generate more electricity compared to smaller installations. This increased energy output contributes to grid stability and reliability, helping to meet growing energy demand while reducing greenhouse gas emissions and dependency on fossil fuels.
Moreover, the scalability of offshore wind projects facilitates the integration of renewable energy into existing electricity systems and supports the transition to a low-carbon energy future. Large-scale offshore wind farms can serve as significant contributors to national and regional energy portfolios, providing clean, reliable electricity to meet the needs of households, businesses, and industries. Additionally, the development of larger projects fosters technological innovation and industry maturation, driving further advancements in offshore wind turbine technology, installation techniques, and grid infrastructure. Therefore, scalability and project size play a crucial role in driving the growth and sustainability of the offshore wind market, enabling the realization of its full potential as a key pillar of the global energy transition.
Offshore wind Market Restraints and Challenges:
Environmental and Ecological Impacts
One significant challenge facing the offshore wind market is the potential environmental and ecological impacts associated with the development and operation of offshore wind farms. Offshore wind projects can disrupt marine ecosystems and habitats, leading to habitat loss, changes in water quality, and disturbances to marine wildlife populations. Installation activities, such as pile driving and seabed disturbance, can cause noise pollution and physical damage to marine habitats, affecting sensitive species such as marine mammals, fish, and birds.
Additionally, the construction and operation of offshore wind farms may result in the risk of collisions between marine wildlife and wind turbines, as well as the displacement of species from their natural habitats. The underwater noise generated by operating wind turbines can also have adverse effects on marine mammals, disrupting communication, feeding, and migration patterns. Moreover, the installation of offshore wind farms may alter sediment transport patterns and marine currents, leading to changes in coastal erosion and sedimentation processes, with potential impacts on coastal ecosystems and biodiversity.
Addressing these environmental and ecological challenges requires careful planning, thorough environmental impact assessments, and effective mitigation measures to minimize adverse effects on marine ecosystems and wildlife. Strategies such as selecting suitable locations for offshore wind farms, implementing noise-reduction measures during construction, and implementing comprehensive monitoring programs can help mitigate environmental impacts and ensure the sustainable development of offshore wind projects.
Technological and Engineering Challenges
Another significant restraint in the offshore wind market is the presence of technological and engineering challenges associated with the design, installation, and operation of offshore wind farms. Offshore wind projects face unique technical complexities compared to onshore wind installations, including harsh marine conditions, deepwater depths, and complex seabed geology. These challenges can increase project costs, extend project timelines, and pose risks to project viability and reliability.
One key technological challenge is the development of offshore wind turbine foundations capable of withstanding harsh marine environments, including high waves, strong currents, and corrosive saltwater conditions. The design and installation of offshore wind turbine foundations require specialized engineering expertise and innovative solutions to ensure structural integrity and long-term stability. Additionally, the installation and maintenance of offshore wind turbines and associated infrastructure pose logistical challenges, such as vessel access, weather limitations, and offshore crew safety.
Furthermore, grid integration and transmission infrastructure present significant engineering challenges for offshore wind projects, particularly in remote or offshore locations with limited existing infrastructure. Connecting offshore wind farms to onshore power grids requires the installation of subsea cables, offshore substations, and onshore grid infrastructure, which can be technically complex and costly. Overcoming these technological and engineering challenges requires collaboration between industry stakeholders, research institutions, and government agencies to develop and deploy innovative solutions, reduce costs, and improve the efficiency and reliability of offshore wind projects.
Segmental Overview
The offshore wind market is segmentedintocomponent, location, technology,end-user,project type, and region.
Offshore WindMarket by Component
Based on component, the offshore wind market is segmented into turbines, electrical infrastructure, substructure, and others.In 2023, the offshore wind market was primarily driven by the turbines segment, which accounted for the dominant share of market revenue. Firstly, turbines are the core components of offshore wind farms, responsible for converting wind energy into electricity. With increasing demand for renewable energy sources, there has been a surge in the installation of offshore wind turbines to harness abundant wind resources in coastal regions. Additionally, advancements in turbine technology, such as larger rotor diameters and higher efficiency designs, have boosted turbine performance and contributed to their widespread adoption in offshore wind projects.
Offshore WindMarket by Location
On the basis oflocation, the offshore wind market is segmented into shallow water, transitional water, and deep water. In 2023, the market was predominantly led by the shallow water segment. Firstly, shallow water sites are typically closer to shore and therefore more accessible for installation and maintenance activities. This proximity reduces logistical challenges and costs associated with offshore wind projects compared to deeper water locations. Additionally, shallow water sites often have more favorable seabed conditions and lower installation complexities, making them attractive options for developers. Furthermore, regulatory frameworks in many regions may also favor the development of offshore wind projects in shallow waters, further driving growth in this segment. Therefore, the shallow water segment held the leading position in the offshore wind market in 2023 due to its favorable accessibility, lower installation complexities, and regulatory advantages.
Offshore WindMarket by Technology
Based on technology, the offshore wind market is segmented into horizontal-axis wind turbines, vertical-axis wind turbines, diffuser-augmented wind turbines, vortex bladeless technology, and others.In 2023, the market was predominantly led by the horizontal-axis wind turbines segment.Firstly, horizontal-axis wind turbines have been the most widely adopted and established technology in the offshore wind industry, offering proven reliability and performance. Additionally, advancements in horizontal-axis turbine design, such as larger rotor diameters and improved aerodynamics, have enhanced energy generation efficiency and reduced costs, further bolstering their dominance in the market. Furthermore, horizontal-axis turbines are well-suited for offshore environments, offering high energy capture rates and compatibility with existing offshore infrastructure, contributing to their widespread adoption and market leadership.
Offshore wind Market by End-user
Based on end-user, the offshore wind market is divided into industrial, commercial, and residential. In 2023, the market was predominantly led by the industrial segment.Firstly, industrial end-users, such as manufacturing facilities, refineries, and large-scale industrial complexes, have substantial electricity demands that can be effectively met by offshore wind energy. Additionally, industrial users often prioritize sustainability and environmental responsibility, making offshore wind an attractive renewable energy option to meet their power needs while reducing carbon emissions. Furthermore, government incentives and policies aimed at promoting renewable energy adoption in industrial sectors have further bolstered the growth of the industrial segment within the offshore wind market.
Offshore wind Market by Project Type
Based onproject type, the offshore wind market is divided into fixed and floating. In 2023, the market was predominantly led by the fixed segment.Firstly, fixed offshore wind projects have been established for a longer time and are more commercially mature compared to floating projects. Additionally, fixed offshore wind farms benefit from lower upfront costs, as they utilize traditional foundation structures anchored to the seabed. Furthermore, regulatory frameworks and grid infrastructure are often more developed for fixed offshore wind projects, providing greater certainty and support for their implementation. Therefore, these factors contributed to the predominance of the fixed segment in the offshore wind market in 2023.
Offshore wind Market by Region
Regionally, the market is divided into North America, Europe, Asia Pacific, Middle East & Africa, and South America. In 2023, the market was predominantly led by the Europe region.Firstly, Europe has been at the forefront of offshore wind development, with established policies, supportive regulatory frameworks, and ambitious renewable energy targets driving significant investments in the sector. Additionally, favorable wind conditions in coastal regions, coupled with technological advancements and experience gained from early projects, have accelerated the growth of offshore wind capacity in Europe. Moreover, strong government support, financial incentives, and collaborative efforts between industry stakeholders have further propelled Europe's dominance in the offshore wind market.
COVID-19 Impact
Prior to the COVID-19 pandemic, the offshore wind market was experiencing robust growth globally, driven by increasing demand for renewable energy sources, ambitious government targets for carbon reduction, and declining costs of offshore wind technology. Investments in offshore wind projects were on the rise, with significant developments underway in regions such as Europe, Asia Pacific, and North America. The market was characterized by a growing number of large-scale projects, technological advancements, and favorable regulatory environments, positioning offshore wind as a key contributor to the transition towards clean energy.
The COVID-19 pandemic had a mixed impact on the offshore wind market. While initial disruptions to supply chains, construction activities, and project financing slowed progress in some regions, the offshore wind industry demonstrated resilience and adaptability. Governments and industry stakeholders implemented measures to mitigate the impact of the pandemic, such as extending project timelines, providing financial support, and implementing health and safety protocols to ensure the continuity of offshore wind projects. Despite temporary setbacks, the pandemic underscored the importance of offshore wind as a reliable and sustainable energy source, leading to continued investments and project development during the crisis.
As the world transitions into a post-pandemic era, the offshore wind market is expected to rebound and resume its growth trajectory. The COVID-19 pandemic highlighted the resilience of offshore wind projects and reinforced the importance of renewable energy in global energy transition efforts. Governments are likely to prioritize renewable energy investments as part of economic recovery plans, driving further growth in the offshore wind sector. Additionally, advancements in technology, reductions in project costs, and increasing investor confidence are expected to accelerate the development of offshore wind projects worldwide. Therefore, the post-COVID-19 period presents opportunities for the offshore wind market to emerge stronger and continue its contribution to sustainable energy development.
Key Players in the Global Offshore wind Market
The market players in the global offshore wind market are DEME Group, ABB Ltd., General Electric Company, Doosan Heavy Industries & Construction Co. Ltd., Nordex SE, Hitachi Ltd., Siemens Gamesa Renewable Energy SA, Vestas Wind Systems A/S, Rockwell Automation, Inc., and Envision.
Key Developments
- In March 2024, RockWave has been awarded a contract by Equinor and Polenergia for subsurface data reprocessing for the Bałtyk 1 offshore wind farm in Poland, with a capacity of 1,560 MW. The contract entails the reprocessing of sparker ultra-high resolution seismic (UHRS) data to produce an enhanced subsurface image.
- In March 2024, Copenhagen Infrastructure Partners (CIP) has entered into a preferred supply agreement with LS Cable for the provision of offshore and onshore cables to Feng Miao 1, which marks the company’s third offshore wind project in Taiwan. This agreement represents the fourth collaboration for cable supply between LS Cable and CIP’s offshore wind projects in Asia, including ChangfangXidao and Zhong Neng in Taiwan, as well as Jeonnam Offshore Wind 1 in Korea.
- In March 2024, Fugro has installed one of its floating LiDAR buoys in the maritime zone of Lithuania’s upcoming offshore wind farm to collect wind and meteorological data in the Baltic Sea, essential for the advancement of the 700 MW project. The measuring station, housed on a specialized buoy, will offer real-time environmental monitoring information to support decision-making in the project's development, as stated by Ignitis Renewables, the firm collaborating with Ocean Winds in the development of the offshore wind farm.
Market Players
- DEME Group
- ABB Ltd.
- General Electric Company
- Doosan Heavy Industries & Construction Co. Ltd.
- Nordex SE
- Hitachi Ltd.
- Siemens Gamesa Renewable Energy SA
- Vestas Wind Systems A/S
- Rockwell Automation, Inc.
- Envision
Market Segmentation
By Component Segment
- Turbines
- Electrical Infrastructure
- Substructure
- Others
By Location Segment
- Shallow Water
- Transitional Water
- Deep Water
By Technology Segment
- Horizontal-Axis Wind Turbines
- Vertical-Axis Wind Turbines
- Diffuser-Augmented Wind Turbines
- Vortex Bladeless Technology
- Others
By End-user Segment
- Industrial
- Commercial
- Residential
By Project Type Segment
- Fixed
- Floating
By Region Segment
- North America
- United States
- Canada
- Mexico
- Europe
- Germany
- France
- United Kingdom
- Spain
- Italy
- Netherlands
- Switzerland
- Russia
- Rest of Europe
- Asia-Pacific (APAC)
- China
- India
- Japan
- South Korea
- Australia
- Singapore
- Indonesia
- Rest of Asia-Pacific (APAC)
- Middle East&Africa (MEA)
- Saudi Arabia
- UAE
- Rest of Middle East & Africa (MEA)
- South America (SAM)
- Brazil
- Argentina
- Colombia
- Rest of South America (SAM)
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