Record year in global offshore wind

FIDs were made by eight European projects in 2023, totalling 9.3 GW, with Hornsea closing just in time for Christmas. In Asia-Pacific, 2.3 GW closed across Taiwan and South Korea, and 704 MW in the US at Revolution Wind.

The US is currently experiencing record offtake activity, with five auctions in process. Candidates include new and existing projects, vying for more favourable terms. Overall, offtake needs to make up ground, according to the report, which states that offtake contracts are down almost 2 GW to 9.5 GW in 2023, primarily driven by a no-show in the UK's Contracts for Difference (CfD) auction.

However, of those offtake contracts that were awarded, the price is markedly higher than in previous years – an average of €105/MWh in 2023 – reflecting recent inflation, supply chain constraints, and interest rates on the cost of energy. The experts behind the report expect offtake contracts to remain an area of focus over the next two years.

Richard Aukland, Director of Research at TGS – 4C Offshore, commented: “Despite ongoing project delays and cancellations, 2023 has still managed to produce record progress in offshore wind. With high activity and a significant year of offtake auctioning expected in 2024 as countries work to hit their 2030 installation targets, a positive scene is being set for the next 12 months, and this will translate into record construction activity later in the decade.”

The offtake auction schedule continues to look healthy, with 47.5 GW slated for 2024 (40 GW in Europe), and it is a similar story for lease rounds with 33.5 GW of leases under the hammer, including in Australia, Belgium, Colombia, Denmark, Estonia, Finland, France, India, Japan, Lithuania, the Netherlands, Norway, Portugal, Spain, the UK, Uruguay, and the US. The rate of lease activity has ramped up in the last two years, with 43.8 GW-worth of sites awarded in 2023, one-third of which was for floating wind.

The report includes several other industry insights, including market indicators, which examine global additions, permitting, offtake, and timelines since 2010. These are used to identify trends to estimate for the year ahead. The latest market indicators show that with 879 GW accounted for by existing projects and national targets, a further 1121 GW would still be needed to meet IRENA/IEA's estimated net-zero requirement of 2000 GW by 2050.

The report also includes an exclusive deep dive into floating wind as part of a unique market attractiveness index, which considers the most attractive floating wind markets. Once again, the UK comes out on top overall, followed by Norway. Other markets scoring highly include South Korea, which currently has the greatest perceived potential, and the US, which has the greatest ambition. However, 4C Offshore's forecast for floating wind underway by 2030 has been reduced for the sixth quarter in a row to 10 GW of capacity underway.

For more news and technical articles from the global renewable industry, read the latest issue of Energy Global magazine.

Energy Global's Winter 2023 issue

The Winter 2023 issue of Energy Global hosts an array of technical articles weather analysis, geothermal solutions, energy storage technology, and more. This issue also features a regional report looking at the future of renewables in North America, and a report from Théodore Reed-Martin, Editorial Assistant, Energy Global, on how Iceland utilises its unique geology for renewable energy.

Read the article online at: https://www.energyglobal.com/wind/03012024/record-year-in-global-offshore-wind/