The offshore wind industry’s global installed capacity is set to exceed 250 gigawatts (GW) by 2030, driven by a surge in projects, a Rystad Energy report shows.
The offshore wind industry’s global installed capacity is set to exceed 250 gigawatts (GW) by 2030, driven by a surge in projects, a Rystad Energy report shows. The combined capital and operational expenditure for the decade is set to rise to $810 billion.
The cumulative installed capacity of global offshore wind projects climbed to 33 GW in 2020, nearly tripling in size since 2016. Rystad expects the world’s installed capacity to hit an estimated 109 GW by 2025 and rise further to 251 GW by 2030, growing by 22% a year on average.
It estimates that total expenditure will amount to $56 billion in 2021 as almost 13 GW of capacity is expected to be commissioned, lifting the cumulative global installed capacity to 46 GW.
Annual spending will rise to $126 billion in 2030, after a short-lived dip in 2022 and 2023. Capex today accounts for 95% of the total expenditure, with opex 5%. The capex share is expected to decline to about 80% by 2030, as all the new installed capacity will require more operational spending to run and maintain. In 2030 offshore wind capex will be on a par with offshore oil and gas greenfield capex (excluding exploration work), at about $100 billion.
Europe, as the most mature market, is still expected to dominate offshore wind spending this decade, totalling about $300 billion. Some of the assets with the largest expenditures are located off the UK, including Orsted’s 4.8 GW Hornsea Two, Three and Four projects, which are lined up for more than $14 billion in capex. Some $11 billion in capex investment will be spent on the giant Dogger Bank project, to be developed in three 1.2 GW phases by SSE, while Scottish Power Renewable’s 3 GW East Anglia Hub will involve capex of beyond $8 billion.
China dominated annual spending between 2019 and 2021. This decade, the country is forecast to spend about $110 billion. Significant investments are expected in Asia this year, driven by Vietnam and Taiwan. Spending in South Korea and Japan will also increase beginning in 2023.
Meanwhile, the Americas region is falling behind due to delayed permitting processes for the US offshore wind industry, which are pushing back the expected start-up years for a number of wind farms. The region is expected to spend just over $70 billion this decade on offshore wind projects, well below that of other global regions.
Rystad Energy expects North and South America will only start spending substantial amounts on offshore wind in 2023. The first large-scale project in the US will be the 800-megawatt (MW) Vineyard Wind 1 scheme developed by Avangrid and the Copenhagen Infrastructure consortium off the coast of Massachusetts, with an estimated investment of $2.8 billion.
Meanwhile, fracking in North America has almost recovered to pre-pandemic levels, with the count of started frac jobs reaching a 12-month high in March 2021, a Rystad Energy report shows. The number of completed wells in the Permian basin during the first quarter of 2021 exceeded the required output maintenance level, so oil production is set to rise in the current quarter.
Rystad Energy has already registered 967 started frac operations in North America for March 2021 and estimated a final count for March to about 1064 wells – exceeding the January 2021 activity level by about 6.5%.
Nearly all big basins are positioned for at least production maintenance in the second quarter, or even some sequential production growth, as is the case with the Permian. The only exceptions are the Bakken and Anadarko regions, where operators may still struggle to cope with the base decline this quarter.
