Denmark: Navigant’s BTM Consult Releases New Offshore Wind Report

BTM Consult, a premier forecaster and data source for the international wind industry and part of Navigant’s Global Energy Practice, has announced that it has released Offshore Report 2013.

The 250+ page Offshore Report 2013 is BTM Consult’s most comprehensive overview of the offshore wind power market to date. The report highlights developments in the international offshore wind market over the past two years, as well as industry growth trends as projected in the report’s near-term forecast to 2016 and medium-term prediction to 2021. Offshore Report 2013 provides an assessment of all major offshore wind markets and incentives across the world, as well as detailed analysis of both the demand and supply sides of the offshore wind market in 2012.

Key findings are included from the latest update of the “balance of plant” supply situation and from BTM’s analyses of offshore wind financing, including future CAPEX and OPEX requirements. The report includes a special focus on the current shipping and logistics situation for offshore wind farm construction. The analyses in the report are based on data collected from more than 350 suppliers.

The report delivers several key data points on the growing offshore wind market, including:

• Offshore wind capacity contributed 470 MW (1.6 percent) to worldwide installations of wind power in 2011
• Offshore wind farms totaled nearly 4 GW of operating capacity at the end of 2011
• The UK continues to lead the market, with more than 2 GW of capacity installed, followed by Denmark with more than 830 MW, and the Netherlands with almost 250 MW
• Germany and China both began installing offshore wind turbines in 2009 and continue to expand their portfolios
• 20 offshore wind test sites have been identified
• Total installed capacity of offshore wind power from January 2012 to October 2012 was 1,314 MW
• Offshore wind projects are currently under construction in Belgium, Denmark, Germany, the UK, China, South Korea and Japan—with a total expected capacity upon completion of nearly 100 GW
• Offshore wind is on track for increased contribution to wind power in Europe
• The average growth rate for annual new installations up to 2016 is expected to be 81.8 percent
• The average annual growth rate for new installations in the projection period (2017-2021) is expected to be 15.6 percent

Demand

The report concludes that, by October 2012, more than 95 GW of offshore wind capacity had been recorded in the project pipeline, of which 86 percent is in Europe, followed by China with five percent, the U.S. and South Korea with four percent each, and Japan with two percent. Taking into account China’s offshore wind target of 30 GW by 2020 and project proposals made at the provincial level, however, it is expected that China’s offshore development portfolio will soon reach at least 25 percent of the global total.

Currently, the Chinese and U.S. markets are dominated by domestic market developers. And, due to the slow pace of progress in the U.S. and protectionism in Chinese waters, this situation is not expected to change in the foreseeable future. The report also identifies leading developers in South Korea and Japan, most of which are utilities or industrial conglomerates.

Supply

2011 saw the continued dominance of Siemens in the European market, but with several new players appearing in both Europe and China. With many years’ experience, Siemens and Vestas remain the market leaders in offshore turbines, supplying turbines to most of the latest developments. According to the report, it’s likely that companies such as REpower, Areva Wind, Bard and Sinovel will see more turbines installed in the coming years, and that new entrants from the Far East, notably China, Japan and South Korea, will soon enter the offshore wind market.

Looking Forward

The large capital requirement of offshore wind projects has relied upon cash-rich utilities, a trend that is expected to continue. However, the report finds that although utilities with historically deep pockets and established offshore wind experience will lead the sector in the future, utilities are seeing depleted cash resources and are seeking alternative unconventional sources of funding.

The report, however, notes that Independent Power Producers and clean energy companies are beginning to show more confidence in offshore wind investment. Both types of companies will account for 11 percent of global development if all projected wind farms are installed according to plan. In addition, with the maturation of the offshore wind sector, industrial conglomerates, private equity groups, pension funds, and privately owned companies are entering the market, helping to increase market investment.

In Europe, in particular, offshore wind has emerged as a leading source of renewable energy and will help member states meet the EU’s political and environmental targets. The report predicts that by the end of 2021, Europe will account for 63.4 percent of total global offshore wind installation and maintain its position as global market leader. Offshore wind development in Asia in the forecast period to 2016 is moderate, but rapid growth is expected in the following five year period. Offshore wind power will account for 7.7 percent of global wind power installation by the end of the prediction period.

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Press release, November 20, 2012; Image: Vestas