• Offshore Winds of Change
Article:

Offshore Winds of Change

09 September 2021

Offshore wind farms are by no means a new entrant on to the energy market, the first offshore windfarm was built in 1991 in Denmark with 11 turbines generating 5 megawatts (MW), enough power for 2,200 homes. 2000 saw the UK’s first offshore wind turbines with two 2MW Vestas wind turbines off Northumberland.

Some 20 years on and there are now over 170 offshore wind farms across the globe with 33.5 gigawatts (GW) of capacity, the number of wind farms is growing by 13% y-o-y and capacity is growing by 19% y-o-y as individual turbines increase in power capacity. By the end of 2021 there are forecast to be 227 offshore wind farms with 45GW of power capacity, in another four years that is expected to grow to 440 offshore wind farms with 106GW of capacity.*

As the move to renewable energy gathers pace, the landscape of vessels operating in offshore markets, currently dominated by offshore oil, will change. More Wind Turbine Installation Vessels (WTIV), Walk-To-Work (W2W) Service Operating Vessels (SOV), Crew Transfer Vessels (CTV) will join the fleet, either through newbuilds or conversion from other offshore support vessels.  The current wind fleet, which includes all of the aforementioned vessel types, stands at 990, with a further 110 vessels on order.  When looking at the current growth in the number of wind farms (13% y-o-y), a 4% to 6% annual growth in the wind fleet looks somewhat modest.* Moreover, as the offshore wind industry evolves, the wind fleet needs to evolve too so as to meet the increasing and challenging demands of the industry. 

The UK has about 30% of the world’s current 33.5GW capacity and that is a significant share of the offshore wind farm market. At present the UK is forecast to have 22% of the world’s GW capacity by 2024 (74.4GW) with China increasing its share from 8.1GW to 32.7GW over the same period.*

These numbers show that the offshore wind farm sector is in line for some further significant growth.  This should come as positive news to those in the UK’s declining offshore oil industry as the infrastructure that has supported offshore oil can be repurposed and converted to service offshore wind farms.

We can expect to see investment flowing into this sector around the globe as well as increasing levels of M&A activity. There are also likely to be significant opportunities investing in decarbonising industries and, in the UK, opportunities for all stakeholders in the offshore energy industry to benefit from R&D Tax Credits and the newly created Freeports. We should also see investment into engineering and marine businesses that provide specialist services and support in maintaining offshore wind turbines. All of this activity is about more than financial returns, importantly it is about the environmental benefits from investing in green technologies and industries. 

To find out more information, please get in touch with Michael Simms.

Reference: 
*. Clarkson Research Services Limited - Offshore Wind Intelligence Monthly Volume 1, No.7 – July 2021