Is Offshore Wind Poised for Growth?

PAVEL MOLCHANOV, Raymond James (07/06/2010)
"Much like offshore oil and gas drilling in the mid-20th century, offshore wind is currently of marginal significance within the overall wind market. The first offshore wind farms were built in the late-1990s; and, between 2000 and 2009, installations grew at an annualized rate of 70%. This was more than double the 27% growth rate of the overall global wind market. But because offshore wind has been growing from such a minuscule base, it remains an extremely small component of total wind generation capacity. As of year-end 2009, just over 2 gigawatts (GW) of offshore wind were installed globally, which compares to total capacity of 159 GW. Thus, offshore wind's marketshare currently stands at merely 1.3%. Given that wind overall provides about 2% of the world's electricity, the analogous figure for offshore wind is well below 0.1%—more or less a rounding error.

. . .we can make one readily apparent geographic point. Currently, all of the offshore wind installed is in Europe; and the UK and Denmark comprise nearly 75% of the total. Why is this a problem? Because over half of the world's total wind installations between 2005 and 2009 came from the 'big two' markets—the U.S. and China. In other words, the U.S. and Chinese wind boom has not yet manifested itself in the offshore wind arena —thus far, it's been entirely onshore. For offshore wind to gain meaningful scale, it cannot simply be a niche market in a handful of European countries. How do we see offshore wind progressing? It seems certain that it will continue to grow much faster than the overall industry. For the 2009–2015 timeframe, we project 51% annualized growth in offshore installations, again more than double the 21% rate onshore. This yields global offshore wind capacity of 23 GW in 2015, up roughly tenfold from current levels, though still only 4.4% of total wind capacity. Beyond 2015, 50+% growth is unlikely, but it should remain well above the industry average. For some perspective: The European Wind Energy Association projects that Europe will have 40–55 GW of offshore wind by 2020, and the UK government targets 25 GW by 2020. Not surprisingly, the growth curve should be highly back-end loaded toward 2020."

Global Wind Power Installations

Global Installed Offshore Wind Capacity 2009

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