Although a number of factors are in place to ensure increased adoption of offshore wind energy, the lack of infrastructure to cope with the installation pace required will likely prevent the world meeting its offshore wind energy targets.
This is according to a new report Global Clean Energy Technology service released by research company IHS Markit.
With the global offshore wind energy market expected to increase by six times by 2030, the number of installation vessels and their capabilities are insufficient to meet the anticipated market growth, states the report. As such, there is a need for the industry to rapidly and heavily invest in the development of new infrastructure.
A minimum of $1.2 to $2 billion is required in new investments to build at least four new vessels to meet global demand from 2026, outside of mainland China. This investment will increase the number of vessels from the current 50 which are not enough to meet the global demand.
Of the 50 vessels, almost two-thirds are located off mainland China and the majority of the others in northern Europe. This poses challenges for countries such as the US that have plans to invest heavily in offshore wind over the next decade after setting up a target to deploy 30GW of offshore wind by 2030 and create nearly 80,000 jobs. This means countries such as the US have to develop their own vessels since the majority of the vessels currently online, which are Chinese-owned, do not operate internationally. Also with the current trade and political tensions between China and the US, there is a high probability these vessels will not be allowed to operate in helping the US to expand its offshore wind energy market. The only US–built and flagged vessel is not set to enter service until 2023. In order to hit its target, the country must relax its maritime rules to permit foreign-built vessels to operate.
The Asia Pacific, which is also an emerging market for offshore wind energy, will require more vessels to be built.
While seven companies have announced the intention to build up to 16 new vessels, these are not firm contracts and final investments have yet to be secured. But conditions for investment are improving as turbine sizes stabilize and the technical capabilities for installing them become increasingly standardised.
Moreover, the rapid advances in offshore wind technology—making turbines bigger and more powerful—are currently outpacing the infrastructure capacity needed to install them. With technology companies such as Siemens and Vestas expanding the capacity and size of offshore wind turbines there is also a need to increase the size and capacity of vessels to be able to install the new turbines being introduced in the market. The current offshore wind turbine installation vessel fleet is unable to install the new larger 15+ MW turbines that will be hitting the market in the next three years, highlights IHS Markit.
Andrei Utkin, principal analyst, Clean Energy Technology at IHS Markit, said: “Offshore wind turbines are constantly getting bigger and more powerful, reducing costs, improving competitiveness and opening new markets. However, that presents a new challenge. As new developments are moving further offshore and into deeper waters, logistics, transit and installation become more complex and require larger specialised self-propelled jackup vessels with technical capabilities far beyond the existing fleet.”
The anticipated growth in the global offshore wind energy market is a result of dramatic cost reductions, advances in technology, favorable policies and ever-increasing national targets.
“One of the reasons for the lack of investment in newbuild turbine installation vessels in the past was concerns over the longevity of the vessels as turbine technology was developing rapidly,” adds Utkin. “Now that turbine sizes have somewhat stabilised, with more standardised technical capabilities required for vessels, you are finally seeing new builds being ordered. We expect that with the rise of the emerging offshore wind markets and first commercial projects coming online, investors and owners will be increasingly willing to finance and build new vessels.”