The offshore wind industry witnessed a three-fold increase in grid connections worldwide from 2020 to 2021, led by 21.1 GW of new installations, recording one of its best year-on-year growth yet, according to the Global Offshore Wind Report released by the Belgium-based Global Wind Energy Council (GWEC).
The offshore wind now represents 7% of total global cumulative installations with the current global cumulative capacity of 56 GW. This is good news for the fast evolving renewable energy sector which is most critical for the fight against climate change, and looming energy crisis.
The global report also recognises India’s ambitious goal of achieving 30 GW offshore wind capacity by 2030, despite being relatively new to offshore wind. The target was announced by Prime Minister Narendra Modi at COP26 in Glasgow where he committed to installing 500 GW of non-fossil fuels-based power generation capacity by 2030.
Setting the plan in motion, the Ministry of New and Renewable Energy (MNRE) has recently shared its latest 37 GW offshore wind trajectory, under which the government aims to roll out offshore wind bids of 4 GW capacity per year for a period of three years off the coast of Tamil Nadu and Gujarat starting 2022-23. For the subsequent five years, an annual bid volume of 5 GW planned until FY 2029-2030.
The report enlists India as a market to watch out for along with Vietnam, Taiwan, Brazil, United States, Japan, South Korea, and China.
“India’s offshore wind potential and the government’s enthusiasm must be juxtaposed with relevant standards, regulatory frameworks, and innovative financial instruments to safeguard investments, mitigate any possible project risks and thereby drive the participation of industry leaders in tender and project implementation,” said Martand Shardul, Policy Director, Global Wind Energy Council India – GWEC India.
“With the likelihood of the first tender notification in the coming months, Tamil Nadu and Gujarat must gear up to put in place the necessary financial and non-financial incentives to drive investments and thereby ensure the timely availability of port, logistics, and supply chain resources to project developers.”
The report recommends that India must look at policy and regulatory clarity on how it plans to achieve the targets. It also suggests looking at approval of financial incentives to help build confidence and drive stakeholder participation, a timely approval of permits and allocation of clearances, a production-linked incentives scheme for domestic offshore wind manufacturing could support a thriving offshore wind industry.
“These newer markets will need to be supported by industry bodies, experienced national governments and other institutions to quickly kick start their sectors and get steel in the water in the right time frames to meet their targets,” said Rebecca Williams Global Head of Offshore Wind, Global Wind Energy Council.
The report also forecasts that Asia with 49.5% share is likely to replace Europe (50.4%) as the largest offshore wind regional market by 2022-end. The growth could be led by China which continues to lead the world in new installation for fourth consecutive year, contributing 80% of new offshore installations last year.
China was followed by the UK, Netherlands, Taiwan, France, and Germany in terms of new connections to the grid last year.
New Era of Growth
Signalling good times for the industry, the report says 2022 will be a record-breaking year for offshore wind growth globally, with 23 GW capacity of offshore wind projects under construction. Total 315 GW of new offshore wind capacity will be added during this decade, bringing the total capacity to 370 GW – close to the target of 380 GW by 2030 set by International Renewable Energy Agency for a net zero pathway, it added.
With governments seemingly getting more ambitious about offshore wind, GWEC Market Intelligence has also revised its outlook for 2030 by 45.3 GW and believes that 260 GW of new offshore wind capacity could be added in 2022-2030, bringing total global offshore wind installations to 316 GW by the end of this decade. However, it also highlights concerns regarding the increasing costs and disrupted supply chains faced by the industry which could jeopardise its long term ability to realise these targets.
Ben Backwell, GWEC CEO however remains optimistic. “Governments across the world are now recognising the once in a lifetime opportunity that offshore wind represents to deliver secure, affordable and clean energy while fostering industrial development and job creation. Now we need to work to rapidly implement targets and ambitions, while building a health and ‘fit for growth’ global supply chain,” he said.
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