October 11, 2011
Although the deployment challenges of developing offshore wind power generation facilities are significantly greater than on land, developers, manufacturers, governments, and investors are now turning their attention to offshore wind farms as a means of further expanding wind power capacity. The reasons for this interest are several: Some of the world’s best wind resources are located offshore, and many of the best land-based wind resource sites located close to urban centers of demand have already been developed. Moreover, high-potential coastal areas are often found in shallow ocean waters relatively close to urban population centers. According to a recent report from Pike Research, investment in offshore wind power will surge in the next several years, resulting in a steep rise in power production revenues and translating into profits for project developers.
The cleantech market intelligence firm forecasts that revenue from offshore wind power production will reach $104 billion by 2017, representing a 53% compound annual growth rate (CAGR) over the next six years. Under a more aggressive scenario, offshore wind power revenues could reach $130.5 billion.
“The world’s best wind resources are largely untapped because they are located at marine sites that cannot be owned or controlled in the traditional way,” says senior analyst Peter Asmus. “At the same time, interest in freshwater offshore wind is also picking up, especially in the Great Lakes in the United States and Canadian Midwest.”
The largest markets for offshore wind through the remainder of this decade, though, will be in Western Europe, which as a region will account for fully 75% of global installed capacity in 2017.
To be sure, the challenges of developing offshore wind power are very different from those facing land-based projects. Roughly 70% of an offshore wind project’s cost is not the wind turbine, but other infrastructure, installation, and maintenance costs — the exact inverse of onshore wind projects. The cost of offshore wind generation is significantly higher than that for onshore wind, in some cases two to three times higher, driving the industry to deploy larger turbines in larger arrays. The long-term fate of the offshore wind industry likely hinges on driving down the cost of energy closer to 10 cents per kilowatt-hour over the next two decades.
Pike Research’s report, “Offshore Wind Power”, provides an in-depth analysis of global opportunities in the offshore wind power market, as well as an examination of key challenges facing the industry. It examines technology innovations that will influence the future direction of the market, and also features detailed profiles of key industry players, including a SWOT analysis for each. Market forecasts extend through 2017 and include projections for installed capacity, installation costs, and production revenue, segmented by region and country. An Executive Summary of the report is available for free download on the firm’s website.
Pike Research is a market research and consulting firm that provides in-depth analysis of global clean technology markets. The company’s research methodology combines supply-side industry analysis, end-user primary research and demand assessment, and deep examination of technology trends to provide a comprehensive view of the Smart Energy, Smart Grid, Smart Transportation, Smart Industry, and Smart Buildings sectors. For more information, visit www.navigantresearch.com or call +1.303.997.7609.