Offshore wind power refers to installing wind turbines in ocean or sea areas to generate electricity. It provides advantages over onshore wind with stronger and more consistent winds that allows generation of power even at lower wind speeds. Countries in Europe are leading the market with installations in shallow waters close to shore. Projects are now being developed further offshore to access stronger winds at greater distances. Advances in technology have made deep water installations feasible bringing larger swaths of ocean areas within reach for power generation.

The Global Offshore Wind Market Size is estimated to be valued at US$ 40 Billion in 2023 and is expected to exhibit a CAGR of 5.0% over the forecast period 2023-2028, as highlighted in a new report published by Coherent Market Insights.

Market Dynamics:

Strong government support in the form of subsidies, incentives and favorable policies is a key driver for growth of offshore wind market. Governments across Europe and Asia are framing climate change goals and renewable energy targets to drive adoption of clean power. For instance, the European Union has set a target of generating at least 32% electricity from renewable sources by 2030 under its clean energy package. Similarly, countries like UK, Germany, Netherlands, Belgium have outlined phased targets for offshore wind capacity additions over the next decade.

In addition, technological innovations are improving cost competitiveness of offshore wind power. Developments in turbine size allowing generation at lower wind speeds, use of taller towers to access higher wind speeds further offshore, and multi-MW turbines are helping reduce levelized costs. Governments see offshore wind as a viable clean alternative to fossil fuels for power generation over the long-run. Strong policy push and cost reductions through scale and technology are fueling demand for offshore wind installations globally.

SWOT Analysis
Strength: The offshore wind market has high growth potential due to increasing offshore wind installations globally. Governments across Europe and Asia are offering various incentives and subsidies to boost investments in offshore wind projects. Technological advancements have increased the efficiency of offshore wind turbines, reducing the cost of energy generation.

Weakness: High upfront investment costs associated with establishing offshore wind farms make the technology less competitive compared to onshore wind and other renewable sources. Harsh environmental conditions and corrosion at sea level increase maintenance costs of offshore wind installations. Complex underwater cable connections also add to project costs.

Opportunity: Many countries are setting ambitious targets to increase the share of renewable energy in their overall power generation mix. This will drive significant investments in offshore wind projects worldwide. New markets in Asia, Americas, and Africa are emerging for offshore wind energy development due to supportive policies and declining costs. Advanced technologies like floating offshore wind farms can unlock potential in deep waters.

Threats: Unpredictable weather events like hurricanes and typhoons can damage offshore turbine components, impacting project revenues. Supply chain disruptions and trade barriers can increase overall project costs. Stiff competition from other renewable technologies and extension of onshore wind to offshore regions pose challenges to market growth. Grid integration challenges and local opposition delays some large offshore wind projects.

Key Takeaways

The global offshore wind market is expected to witness high growth over the forecast period led by capacity additions across European and Asian markets.

In Asia, China dominates offshore wind installations and aims to achieve over 50 GW capacity by 2025. Other high potential markets include Japan, South Korea and Vietnam where governments have set ambitious renewable energy targets. North America is opening up opportunities for offshore wind with major projects being planned along the Eastern coast of the USA. Supportive state level policies and tender programs will boost investments in the coming years.

Some of the major players in the offshore wind market are Siemens Gamesa, Vestas, General Electric, Goldwind, Shanghai Electric, Envision Group, Mingyang Smart Energy, and Sinovel Wind Group. These companies have established global supply chain networks and capabilities to undertake large offshore wind farm projects. Goldwind, Shanghai Electric and Envision Group have emerged as leading domestic turbine suppliers in China, the largest market. Ongoing technology innovations, cost reductions and supportive policies will drive continued growth of the global offshore wind industry.

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