Offshore wind to skyrocket to $170 billion by 2020

Europe is at the forefront of this growth, with its countries having set themselves ambitious targets to ensure the continent’s electricity needs are to be provided by renewable energy sources by 2020.

The offshore wind market is posed for sweeping growth in the coming years, with global investment forecasted to reach 130 billion euro ($170.75 billion) between now and 2020, according to Roland Berger Consultancy.

Europe is at the forefront of this growth, with its countries having set themselves ambitious targets to ensure the continent’s electricity needs are to be provided by renewable energy sources by 2020.

According to the Munich-based consultant firm, offshore wind energy will play a key role in Europe’s energy mix with 40 gigawatts of capacity to be installed over the next seven years.

Currently, about 7 billion euro annually is invested by European countries to develop offshore wind projects and this figure will increase twofold to more than 14 billion euro by 2020.

For the same period, it is predicted investments in offshore in the Asian region will rise from 1.6 billion euro per year to up to 5 billion euro a year.

“Yet this global growth in offshore wind power will be accompanied by major challenges,” said Marcus M. Weber, Partner at Roland Berger Strategy Consultants.

Predominantly, Mr. Weber noted that offshore wind farms are growing in size and are moving further and further away from the coast, with new installations anchored at even greater depths.

To put things in perspective, an average distance from shore of 60 kilometers is expanding to as much as 100 km, at which point the water can be as deep as 45 meters.

These factors are driving up the cost of investment and making projects more complex, said Mr. Weber.

Compared with onshore wind, offshore wind entails much higher costs. The wind turbines account for about one fourth of the total cost of an offshore farm, while maintenance and repairs form the largest share at 28 percent on the average.

The offshore wind industry has to sharply cut the cost of energy generation if it is to compete with other forms of energy.

A kilowatt hour of electricity generated from offshore wind power currently costs around 14 euro cents. If the industry manages to bring down the cost of producing offshore wind power to around 30 percent between now and 2020, this would allow such clean electricity to be sold at an average price of 9 euro cents per kWh.

Mr. Weber noted making this happen will require technological innovation, new financing models and a stable political framework. He cited larger wind turbines, new kinds of foundations, more efficient small production runs for the turbines and special jack-up vessels having a vital part to play to this end.

“The offshore wind industry will become increasingly important in the years ahead, because transforming the energy system without this one central pillar would be difficult to imagine,” said Mr. Weber. “That makes it all the more important for the industry to quickly achieve cost-cutting industrialization effects, and for the government to stake out a reliable framework.” – C. Dominguez

ECOticias.com – EcoSeed

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