Offshore wind may become the next trillion-dollar industry | RenewEconomy

Offshore wind may become the next trillion-dollar industry

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Offshore wind is following solar PV down the cost curve and could become next trillion dollar industry, with potential to exceed global demand for electricity.

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source: Profile Media
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The International Energy Agency expects offshore wind power will “expand impressively” over the next two decades, increasing 15-fold and attracting around US$1 trillion (AU$1.47 trillion) of cumulative investment by 2040.

In a new report published entitled Offshore Wind Outlook 2019– which the IEA says is the most comprehensive global study on the subject to date, – the organisation’s experts predict that offshore wind energy is expected to play a significant role in boosting efforts to decarbonise global energy systems and reduce air pollution.

Combining the latest technology and market developments with a specially commissioned geospatial analysis that maps out wind speed and quality along hundreds of thousands of kilometres of coastline around the world, the IEA puts offshore wind’s technical potential  at a whopping 36,000TWh per year.

Two things are important to note about this figure. It only accounts for installations in water less than 60 metres deep and within 60 kilometres of the shoreline. When floating offshore wind, the technical potential skyrockets.

Secondly, global electricity demand is currently 23,000 TWh – meaning that offshore wind could theoretically match and exceed global electricity demand, both at current levels and as demand increases.

The global offshore wind industry is being propelled forward by continually declining costs matched with increasingly supportive government policies and supported by ever-improving technology progress resulting in larger turbines and cost-effective floating foundations – which are likely to combine to allow access to more consistent and stronger wind speeds further away from the shore.

“In the past decade, two major areas of technological innovation have been game-changers in the energy system by substantially driving down costs: the shale revolution and the rise of solar PV,” said Dr Fatih Birol, the IEA’s Executive Director. “And offshore wind has the potential to join their ranks in terms of steep cost reduction.”

While Europe has served to establish offshore wind as a legitimate and long-term renewable energy technology, but China – and Asia as a whole – is expected to lead the way over the coming decades.

In the European Union today, there is currently 20GW of offshore wind capacity, a figure which – under current policy settings – is expected to increase to nearly 130 GW by 2040. However, as the IEA highlight, if the EU is to reach its goals of carbon neutrality then offshore wind capacity will need to increase to around 180 GW by 2040 and become the region’s largest single source of electricity.

Across the globe, China is expected to play an increasingly leading role in offshore wind’s long-term growth, supporting population centre’s around the east and south of the country.

By 2025, according to the IEA, China is likely to have the largest offshore wind fleet of any country – overtaking the United Kingdom – and is expected to increase from 4 GW today to 110 GW by 2040. However, as with the European Union, policies designed to meet global sustainable energy goals could push China’s offshore wind capacity to as much as 170 GW or more.

“Offshore wind currently provides just 0.3% of global power generation, but its potential is vast,” Dr Birol said. “More and more of that potential is coming within reach, but much work remains to be done by governments and industry for it to become a mainstay of clean energy transitions.”

The new report is a fore-runner to the IEA’s flagship World Energy Outlook 2019 report which will be published in full on November 13.

 

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