The offshore wind industry witnessed a threefold increase in grid connections worldwide between 2020 and 2021, led by 21.1 GW of new installations, recording one of its best year-on-year growth to date, according to the Global Offshore Wind Energy Report published by the Belgium-based Global Wind Energy Council (GWEC).
Offshore wind now accounts for 7% of total global cumulative installations with a current global cumulative capacity of 56 GW. This is good news for the rapidly evolving renewables sector, which is most critical to the fight against climate change and the looming energy crisis.
The global report also acknowledges India’s ambitious target of achieving 30 GW offshore wind capacity by 2030, despite being relatively new to offshore wind. The target was announced by Prime Minister Narendra Modi at COP26 in Glasgow, where he pledged to install 500 GW of non-fossil fuel-based power generation capacity by 2030.
Putting the plan into action, the Ministry of New and Renewable Energy (MNRE) has recently shared its latest 37 GW offshore wind trajectory, according to which the government intends to launch offshore wind tenders of 4 GW of capacity per year over a three-year period. off the coast of Tamil Nadu and Gujarat from 2022-23. For the next five years, an annual supply volume of 5 GW is planned through fiscal 2029-2030.
The report lists India as a market to watch along with Vietnam, Taiwan, Brazil, the United States, Japan, South Korea, and China.
“India’s offshore wind potential and government enthusiasm must be juxtaposed with standards, regulatory frameworks, and innovative financial instruments to safeguard investments, mitigate potential project risks, and thereby drive industry leaders’ participation in project bidding and implementation,” said Martand Shardul. Policy Director, Global Wind Energy Council India – GWEC India.
“With the likelihood of the first tender notification in the coming months, Tamil Nadu and Gujarat must gear up to implement the necessary financial and non-financial incentives to drive investments and thereby ensure timely availability of port, logistics, and supply chain. resources to project developers.”
The report recommends that India should consider regulatory and policy clarity on how it plans to achieve the targets. It also suggests considering the approval of financial incentives to help build confidence and drive stakeholder engagement, timely permit approvals, and allocation of clearances, a production-linked incentive scheme for domestic offshore wind manufacturing could support a thriving offshore wind industry.
“These newer markets will need to be supported by industry bodies, experienced national governments, and other institutions to quickly drive their sectors forward and get steel in the water in the right timeframes to meet their targets,” said Rebecca Williams, global head of Offshore. Wind, World Wind Energy Council.
The report also forecasts that Asia, with a 49.5% share, is likely to replace Europe (50.4%) as the largest regional offshore wind market by the end of 2022. Growth could be led by China, which continues to lead the world in new installations for the fourth consecutive year, contributing 80% of new offshore installations last year.
China was followed by the UK, the Netherlands, Taiwan, France, and Germany in terms of new grid connections last year.
NEW ERA OF GROWTH
Signaling good times for the industry, the report says 2022 will be a record year for global offshore wind growth, with 23 GW of offshore wind project capacity under construction. A total of 315 GW of new offshore wind capacity will be added during this decade, bringing total capacity to 370 GW, close to the 380 GW 2030 target set by the International Renewable Energy Agency for a net-zero pathway, it added.
As governments appear to become more ambitious about offshore wind, GWEC Market Intelligence has also revised its 2030 outlook by 45.3 GW and believes 260 GW of new offshore wind capacity could be added in 2022-2030, bringing the global total of offshore wind installations to 316 GW. by the end of this decade. However, it also highlights concerns about the rising costs and disrupted supply chains facing the industry, which could jeopardize its long-term ability to meet these targets.
However, Ben Backwell, executive director of GWEC, remains optimistic. “Governments around the world are now recognizing the once-in-a-lifetime opportunity that offshore wind represents to provide secure, affordable, and clean energy while fostering industrial development and job creation. We now need to work to quickly implement targets and ambitions while building a healthy, ‘fit-for-growth’ global supply chain,” he said.