May 24, 2024
Offshore Wind Market

Offshore Wind Market Is Driven By The Increasing Focus On Renewable Energy Sources

The offshore wind market comprises of wind turbines and associated towers, substations and other components located in water bodies, either close to the shoreline or farther offshore in deep waters. Offshore wind energy is a form of offshore renewable energy that utilizes wind farms constructed in bodies of water, usually in the ocean on the continental shelf, to generate electricity from wind. Offshore wind projects are typically located in deeper waters farther from the shore and use larger multi-megawatt turbines mounted on fixed or floating structures. These plants have several advantages over land-based wind farms including stronger and more consistent winds, access to major load centers located near coasts, and minimal land usage. Apart from power generation, offshore wind projects provide environmental benefits by lowering greenhouse gas emissions and reducing dependence on fossil fuels.

The global Offshore Wind Market is estimated to be valued at US$ 63.79 Bn in 2023 and is expected to exhibit a CAGR of 7.9% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market key trends:

One of the key trends in the offshore wind market is the growing investments in floating offshore wind farms. Unlike traditional fixed bottom offshore wind turbines, floating turbines can be installed in deeper waters further from the shore. This allows tapping into stronger and more consistent wind resources. Major players are investing heavily in developing floating wind turbine technologies to expand offshore wind energy production into deeper waters. For instance, TotalEnergies has invested over $500 million to develop floating offshore wind projects in South Korea. The growing investments are expected to significantly boost the adoption of floating offshore wind technology in the coming years.

Porter’s Analysis

Threat of new entrants: High initial investments required for setting up offshore wind farms pose barriers for new players. The industry is currently dominated by large utilities and project developers with established supply chains and financing capabilities.

Bargaining power of buyers: Buyers including utility companies and large corporate off-takers have moderate bargaining power due to the oligopolistic nature of the supplier market. However, the growing demand for renewable energy provides leverage to buyers.

Bargaining power of suppliers: Major suppliers like turbine manufacturers and project developers hold significant power due to the specialized nature of components and services. Switching costs for buyers are also relatively high.

Threat of new substitutes: Alternatives like onshore wind and solar PV pose competition. However, offshore wind has advantages over location constraints and available potential. Hybrid projects combining various renewable technologies also act as substitutes.

Competitive rivalry: Competition is high among major developers and utilities to gain leadership in fast-growing offshore wind markets. Players differentiate based on technology advancements, project pipeline, supply chain management and financing strength.

Key Takeaways

The Global Offshore Wind Market Demand  is expected to witness high growth over the forecast period supported by ongoingcapacity additions and strong momentum in key regional markets. The global Offshore Wind Market is estimated to be valued at US$ 63.79 Bn in 2023 and is expected to exhibit a CAGR of 7.9% over the forecast period 2023 to 2030.

Regional analysis: Europe accounted for over 80% of installed offshore wind capacity globally led by the UK, Germany, Belgium and the Netherlands historically. However, the market is shifting towards Asia Pacific led by China which has set ambitious targets. Other emerging Asian markets include South Korea, Taiwan, Japan and Vietnam. North America is also gaining momentum led by the US which is investing heavily to develop domestic supply chains and projects.

Key players: Key players operating in the offshore wind market are Groupe Danone, Fonterra Co-operative Group Ltd., Proliant Inc., Koninklijke DSM N.V., E.I. DuPont De Nemours and Company, Arla Foods amba, Cargill Inc., Groupe Lactalis S.A., APS BioGroup, and Nestle S.A. Players are focused on expanding to new high potential markets through both organic and inorganic routes while investing in innovative solutions to maximize efficiency and reduce costs.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it