Offshore wind energy involves harnessing the kinetic energy from wind and converting it into electricity, which is then transported to onshore substations. Offshore wind energy is considered a viable clean energy alternative to fossil fuels owing to its consistent winds and ability to harness wind energy from larger turbines installed in deep waters.
The global offshore wind energy market is estimated to be valued at US$ 48.7 Mn in 2024 and is expected to exhibit a CAGR of 8.0% over the forecast period 2024 to 2031.
Key Takeaways
Key players operating in the offshore wind energy are Arlo Technologies Inc., Ring (owned by Amazon), Nest (owned by Google, a subsidiary of Alphabet Inc.), Wyze Labs Inc., Logitech International S.A., Blink Home Security (owned by Amazon), D-Link Corporation, TP-Link Technologies Co., Ltd., Ezviz (a subsidiary of Hikvision), Reolink Digital Technology Co., Ltd., Zmodo Technology Corporation, Canary Connect Inc., Netgear Inc., Eufy Security (a division of Anker Innovations), Swann Communications Pty Ltd.
The key opportunities in the Offshore Wind Energy Market Growth include increasing investments by governments and private equity firms to achieve decarbonization targets and generate jobs. Technological advancements such as the development of larger turbines with capacities of 10-15 MW and floating turbines are also expected to boost the offshore wind energy market.
Market drivers
The primary driver for the offshore wind energy market is the rising concerns over climate change and carbon emissions from conventional power sources such as coal and natural gas. Stringent regulations regarding carbon footprint reduction are shifting the focus towards renewable energy adoption. Offshore wind energy serves as a reliable alternative to generate carbon-free electricity at utility-scale. Additionally, falling costs of offshore wind generation and rising electricity demand globally are also propelling the market growth
Current challenges in the offshore wind energy industry:
The offshore wind energy industry is still at a nascent stage of development and faces certain key challenges. The high upfront investment cost associated with offshore wind farm installation continues to be a major hurdle. The infrastructure requirements like special purpose vessels, foundations, export cables etc. increase project costs significantly. Infrastructure limitations for transporting and transmitting the generated power to onshore grid network is another challenge. Dependence on weather conditions and harsh offshore environment poses technical difficulties in operations and maintenance activities. Lack of skilled workforce with required expertise in marine operations is also an area that needs attention from industry players and governments. Rising competition from other renewable sources like solar PV is exerting pricing pressures in the market.
SWOT Analysis
Strength: Large untapped potential in deep waters, stable energy production compared to onshore.
Weakness: High technology and infrastructure investment requirements, dependence on weather conditions.
Opportunity: Growing policy support through incentives, declining technology costs boosting commercial viability.
Threats: Intermittency issues, uncertainties regarding long term productivity of turbines.
Geographically, Europe dominated the offshore wind energy market in the historical period, accounting for over 80% of the global offshore wind installations. Countries like the UK, Germany, Belgium, Netherlands, Denmark etc. have been early adopters and continue to lead the development of offshore wind farms. The Asia Pacific region is emerging as the fastest growing regional market, driven by strong focus on renewable energy in China, Japan, South Korea and Taiwan.
In terms of future growth potential, Europe and Asia Pacific regions are expected to remain the major markets. However, North America is likely to witness highest growth during the forecast period owing to rising commitments from the US and Canada to develop offshore wind farms in coastal regions. The untapped potential in offshore territories around Latin America and Africa also presents new opportunities over the long run.
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