EUR 3.9 billion are expected to be spent on major component replacement (MCR) on offshore wind farms in Europe throughout the 2020s, with EUR 1.6 billion of the MCR pot to be poured into using jack-up vessels, according to projections from Wood Mackenzie .
As the global offshore wind turbine fleet ages, almost 10,000 units will require an MCR intervention until 2030 and this activity will be largely concentrated in Europe, which currently accounts for 85 per cent of the global MCR market share with market value set to reach EUR 518 million by the end of this decade.
With the expansion of offshore wind over the past several years, the total installed capacity of wind turbines operating for more than ten years is expected to increase from around 1.8 GW we have now to over 20 GW by 2030.
MCR cost per unit, which dropped significantly last year, will increase 72 per cent by 2030 with bigger wind turbines and cost recovery in the jack-up vessel industry, where MCR day rates have fallen due to multiple factors, including focus on cost, growing fleet, and lower demand in the offshore oil and gas and wind sectors, according to Wood Mackenzie.
As the installation activities in offshore wind rise over the coming period, the supply of jack-up vessels for major component replacement on operational wind farms will contract – and that of vessels handling large next-generation turbines in particular – resulting in increase in investments in this area, within which Wood Mackenzie also sees new players entering the market.
Earlier this year, Wood Mackenzie reported that the global offshore wind operations and maintenance (O&M) market was expected to grow 16 per cent annually and reach EUR 10 billion by 2029, with Europe remaining the biggest O&M market by region and European countries together creating a EUR 5.5 billion O&M market by 2029.
The O&M market will grow as manufacturers dedicate more resources to O&M services for newer and larger turbines, but also create significant opportunity for independent service providers with the ageing turbine fleet, according to Wood Mackenzie’s report from March.
Operations and maintenance will not be the only segment in the offshore wind sector looking for more (and newer) vessels over the coming years, as the construction activities are already starting to demand more vessels capable of handling giant wind turbine components in this rapidly expanding energy sector with rapid technology progress.
Namely, earlier this year, a report from the Clean Energy Technology service at IHS Markit warned that advances in offshore wind turbine technology were outpacing the infrastructure capacity needed to install them, with the installation vessel fleet on disposal starting to lag behind .
The report said the industry needed to rapidly develop and invest in new infrastructure to achieve the ambitious plans for offshore wind globally and to meet the demand to be created by the expected sixfold growth of the offshore wind annual gross capacity additions by 2030.