GLOBALWINDENERGYCOUNCILGWECGLOBALOFFSHOREWINDREPORT2022GWEC.NETAssociateSponsorsSupportingSponsorLeadingSponsor1GWECGLOBALOFFSHOREWINDREPORT2022Foreword2ExecutiveSummary6PartOne:SupplyChain12PartTwo:Policy21PartThree:SustainabilityoftheIndustry28PartFour:Technology39MarketStatus202155MarketstoWatch57MarketOutlook2022-203183Appendix98GlobalLeaders102SponsorsandContacts104TableofContentsGlobalWindEnergyCouncilRuedeCommerce311000Brussels,Belgiuminfo@gwec.netwww.gwec.netLeadAuthorsRebeccaWilliams,FengZhao,JoyceLeeContributorsandeditingbyBenBackwell,EmersonClarke,WanliangLiang,AnjaliLathigara,EstherFang,ReshmiLadwa,MarcelaRuas,LimingQiao,MarkHutchinson,ThangVinhBui,MafSmith,NadiaWeekes,AlastairDutton,MarthaSelwynPublished29June2022Designlemonboxwww.lemonbox.co.ukGLOBALWINDENERGYCOUNCILFOREWORD23GWECGLOBALOFFSHOREWINDREPORT2022ForewordWelcometotheGlobalOffshoreWindReport2022-“OffshoreWind-theNextHorizon”.Itfeelsliketheworldhaschangedsubstantiallysinceour2021edition.Italsoseemsevidentthatweareworkingtowardsanewhorizonforoffshorewindtechnology,wherewindwillplayanincreasinglycriticalroleinenergysystemsacrosstheworld.Countriesgloballyarenowgrapplingwiththeunprecedentedtwinchallengeofensuringsecureenergysuppliesandmeetingclimatetargetstostemtheworsteffectsofglobalheating.2022sofar,hasseenconsumersgloballybearthebruntofspiralingfuelandpowerpricesaswellasassociatedinflation,creatingacostoflivingcrisisbeingfeltineverycorneroftheworld.Ithasalsoseenrecordemissionsandtemperatureincreases,andevergraverwarningsfrominternationalclimatebodies,asencapsulatedinthelatestIPCCCreport.AswesetoutintheGlobalWindReport2022earlierthisyear,GWECbelievesthattheonlypermanentwaytosolvethechallengesofenergysecurity,climatechangeandaffordabilityisanacceleratedtransitionawayfromvolatilefossilfuelstowardsrenewables.Offshorewindrepresentsakeyopportunityforcountriestopushtheenergytransitionforwardsatscale,creatingsignificantnationalandlocaljobsandeconomicgrowthandjobs,andloweringenergyprices,whilesupportingenergysecurity.Iam,therefore,pleasedtosharewithyouthat21.1GWofoffshorewindwasconnectedtothegridlastyear,making2021thebesteveryearfortheoffshorewindindustry.2022islikewisesettobearecord-breakingyearforoffshorewindgrowthglobally.Policymakersarenowfullywakinguptotheopportunitiesthatoffshorewindcanprovide.ThelastfewmonthsfollowingCOP26haveseenarapidexpansionofambitionforoffshorewindaroundtheworld.Wehaveseenmanygovernmentseithersettingoffshorewindtargetsforthefirsttimeorincreasingtargetsinresponsetotheenergycrisis.Forexample,theEuropeanCommissionrecentlyreleasedtheREPowerEUplan,aimingtoachieveindependenceforEuropefromRussianfossilfuelswellbefore2030.TheEsbjergDeclarationfromtheNorthSeanationsofDenmark,theNetherlands,BelgiumandGermanysetoutanewtargetof150GWofoffshorewindby2050.WehavealsoseentheUKGovernmentraiseitsoffshorewindtargetbyanother10GW,to50GWby2030;andVietnamistargetingahugeoffshorewindincreaseinitsPDP8(PowerDevelopmentPlan8).IntheUnitedStates,thetotalannouncedoffshorewindprocurementtargetsatthestatelevelincreasedby28.6%tonearly50GWwithinayear.InAustralia,theVictoriaStateGovernmenthassetatargetof9GWofoffshorewindby2030.Cruciallygovernmentsarealsostartingtoputinplacetherightpolicyframeworkstoachievetheirgoals.WehavealsoseenthepublicationoftheDecree10,946/2022inBrazilwhichlaystheregulatorygroundforoffshorewind,andinColumbia,thegovernmentismovingforwardstowardsaseabedleasingframework.WelcometotheGlobalOffshoreWindReport2022RebeccaWilliamsGlobalHeadofOffshoreWind,GlobalWindEnergyCouncilGWEC.NETCollectivelythisincreaseinambitionistakingheadlinetargetsforoffshorewindclosetothe380GWby2030whichGWECandIRENAproposedintheirUNEnergyCompactin2021.However,policymakersandindustrywillnowneedtomakeagargantuanefforttomakesurethesetargetsaremet,asthiswillrequirearound70GWofinstallationsperyear,comparedtothecurrentlevelofaround20GW.Sofar,onlyChinahasshownitselfcapableofconstructingatclosetotherequiredlevelstomeetitstargets.Manycountries,suchasSouthKorea,Vietnam,India,andBrazil,haveimpressiveambitionsbutarerelativelynewtooffshorewind.Thesenewermarketswill,therefore,needtobesupportedbyindustrybodiessuchasGWEC,experiencednationalgovernmentsandotherinstitutionstoquicklykickstarttheirsectorsandgetsteelinthewaterintherighttimeframestomeettheirtargets.Redesigningregulatoryframeworkstomorerapidlyleaseseabedandpermitsiteswillbeofcrucialimportanceifoffshorewindistofulfillitsroleinreplacingfossilfuels.Thisyear’sGlobalOffshoreWindReportsetsoutdetailsofhowthiscanbeachieved.Newpolicysolutionswillalsohavetobeadoptedtoensurethattheglobalsupplychaincanmeeteverincreasingdemandagainstabackdropofrisingcommoditypricesandshrinkingmargins.Continuedoffshorewindgrowthcannotbeachievedwithoutabuoyantsupplychainabletosupplyagrowingpipelineofprojectsacrosstheworld.Asthesizeoftheindustryincreases,asustainableapproachtoexpansionwillbekey.Thisyear’sreportexploresthedifferentchallengesthatarebeingfacedbytheindustryasitscalesupanddiscusseshowoffshorewindcanbedeployedinharmonywithnature,communitiesandsharedusersofthemarineenvironment.Offshorewindisreadytoplayitspartinmitigatingclimatechangeandtacklingtheenergycrisis.Nowisthetimetoredoubleourefforts,workingcollaborativelywithpolicymakers,communitiesandwiderstakeholders,toacceleratethetransitiontowardsarenewablefuture.Foreword45GWECGLOBALOFFSHOREWINDREPORT2022Alothaschangedintheenergysectoroverthepastyear.ThereboundintheworldeconomyfromCOVID-19hasledtoincreaseddemandforenergyandothercommodities,withsharplyrisingpricesasaconsequence.Globalsupplychainshavebeendisrupted,challengingtheabilityofindustriestodeliverontimeandwithinbudget.TheenergyandsupplychaincrisishasbeenfurtherexacerbatedbyRussia’sunwarrantedinvasionofUkraine.Facingthesegravechallenges,ithasbecomeclearthatthetransitionawayfromafossil-dependentenergysystemmustbeaccelerated.Today,theoffshorewindindustryfindsitselfatanewinflectionpoint.Afteradecadeofindustrialisationandcostreductions,offshorewindhasbecomeawell-establishedandmatureindustry.Despiterecentcostinflation,offshorewindisfirmlycost-competitivewithfossil-poweredalternatives,andevenmoresoinlightofthecurrenthighpriceenvironmentforfossilfuels.Thereisnolongeranydoubtthatlarge-scaleoffshorewindwillbeanimportantpartofthefuturedecarbonisedelectricitysystem.GovernmentsinEurope,theAsia-Pacific,theUSandbeyondarelookingtooffshorewindasameanstodiversifyanddecarbonisetheirenergysupply.2021wasaremarkableyearfornewoffshorewindcapacitywitharecord21GWbeinginstalledglobally,morethantriplethecapacitydeployedin2020.Europehadanotherstrongyear,installingaround3GW.ThebigchangehappenedinmainlandChina,wherenearly17GWwasinstalled,bringingitstotalinstalledcapacityalmostuptoparwithEurope.Meanwhile,theindustryisseeingnewbuild-outtargetsannouncedthatwouldbealmostunfathomablejustafewyearsago.Thesetargetsholdpromisethattherecordinstallationsseenin2021willnotbeaone-offevent.Theoffshorewindindustry,however,cannotrestonitslaurelsandmustcontinuetoevolveandinnovate.Thecarbonfootprintoftheindustryneedstobeminimisedthroughthedecarbonisationofsupplychains,includingthesteelthatgoesintoproducingwindturbinesandtowers.Offshorewindneedstobebuiltinbalancewithnature,carefullymanagingitsimpactontheenvironmentandbiodiversity.Whileclimatechangeisthesinglelargestthreattoglobalbiodiversity,includingintheocean,theindustryalsohasaresponsibilitytoavoid,mitigateandaddresspotentialenvironmentalimpactsasoffshorewindexpandsoffourcoasts.Thereareexcitingopportunitiesforinnovationbyintegratingoffshorewindatscalewithenergyislands,interconnectorlinksandthroughPower-to-X.Deliveringontheambitionsforoffshorewindcapacitydeploymentwillrequireamassiveexpansionofthesupplychain.InEurope,supplychaincapacitywillneedtomorethantripletowards2030,andotherregionswillhavetobuildupsupplychainsalmostfromscratch.Amainchallengewillbetoattractthenecessaryinvestmentswhileensuringahealthyandeconomicallysoundsupplychainindustry.Atthesametime,theindustryneedstocontinuetodemonstratethesustainabilityofoffshorewind,includingtolocalcommunitiesandbiodiversity.Ørstedappreciatesthegoodworkingrelationshipsinthesector,notleastasexpressedbyGWEC.Welookforwardtocontinuingtoworkwiththeseimportantagendasin2022andbeyond,includingatCOP27inEgypt.UlrikStridbækVicePresident,GroupRegulatoryAffairs,ØrstedForewordEXECUTIVESUMMARY67GWECGLOBALOFFSHOREWINDREPORT2022ExecutiveSummaryMarketstatus2021saw21.1GWoffshorewindreachgridconnectionworldwide,threetimesmorethanin2020,settinganewrecordintheoffshorewindindustry.The21.1GWofnewinstallationsbringsglobalcumulativeoffshorewindpowercapacityto56GW,showingyear-over-year(YoY)growthof58%andrepresenting7%oftotalglobalcumulativewindinstallations.Ofthe21.1GWinnewoffshoreinstallations,80%wascontributedbyChina.Thismakes2021thefourthyearthatChinahasledtheworldinnewoffshorewindinstallations.ThisastoundinggrowthinChinawaschieflydrivenbytheFiTcut-offforoffshorewindstartingfrom1January2022.AsimilarsituationalsooccurredinVietnam,whichcommissioned779MWofintertidal(nearshore)projectslastyear,makingitthethird-largestmarketinnewinstallationsin2021.Taiwanonlycommissionedthe109MWChanghuademonstrationprojectin2021,duetoCOVID-19-relateddisruptions.InadditiontothenewcapacityfromAsia,Europeistheonlyregionwhichreportednewoffshorewindinstallationslastyear.TheUKhadarecordyearin2021withmorethan2.3GWreachinggridconnection;however,itlostitstitleastheworld’slargestoffshorewindmarketintotalinstallationstoChina.CominginsecondfornewinstallationsinEuropeisDenmarkwith605MWcommissionedlastyear,followedbyNetherlands(392MW)andNorway(3.6MW).Intotalinstallations,Europeremainsthelargestoffshorewindregionalmarketasoftheendof2021.Theregionwasresponsiblefor50.4%oftotalcumulativeglobaloffshorewindinstallations,followedbyAsiawith49.5%marketshare.OutsideEuropeandAsia,NorthAmericahas42MWoffshorewindinoperationasoftheendoflastyear,contributingonly0.1%oftotaloffshorewindinstallations.Lastyearalsosaw57MWofnewfloatingwindinstalledworldwide,ofwhich48MWwasintheUK,5.5MWinChinaand3.6MWinNorway.Asof2021,atotalof121.4MWoffloatingwindisinstalledglobally,ofwhich110.9MW(91.4%)isinEuropeandtheremaining10.5MW(8.6%)inAsia.MarketOutlookPoliticalcommitmenttonetzerogatheredglobalmomentumatCOP26inGlasgow.Offshorewindpowerispoisedtoplayavitalroleonachievingcarbonneutrality.CoupledwithrenewedpolicyurgencyforachievingenergyindependencefromRussianoilandgas,andvolatilityinfossilfuelmarketsingeneral,theglobaloffshorewindmarketoutlookinthemediumandlong-termlooksextremelypromising.Withanexpectedcompoundaverageannualgrowthrate(CAGR)of6.3%until2026and13.9%uptothebeginningofnextdecade,newannualinstallationsareexpectedtosailpastthemilestonesof30GWin2027and50GWin2030.GWECMarketIntelligenceexpectsthatover315GWofnewoffshorewindcapacitywillbeaddedoverthenextdecade(2022-2031),bringingtotalglobaloffshorewindcapacityto370GWbytheendof2031.Ofthisnewvolume,29%willbeconnectedFengZhaoHeadofStrategyandMarketIntelligence,GlobalWindEnergyCouncilTheData:2021-ThebestyearfortheoffshorewindindustryGWEC.NETinthefirsthalfofthedecade(2022-2026).Thisstillfallsshortofthe380GWoffshorewindinstallationtargetby2030setbyGWECandIRENAinitsUNEnergyCompactin2021.Asthevolumeofannualoffshorewindinstallationsisexpectedtomorethandoublefrom21.1GWin2021to54.9GWin2031,offshore’sshareofnewglobalwindinstallationsissettogrowfrom23%in2021toatleast30%by2031.ConsideringtheincreasedfloatingwindtargetintheUKandtheacceleratedfloatingprojectdevelopmentactivitiesinEurope,AsiaandNorthAmerica,whichbringthecurrentglobalfloatingprojectpipelineto120GW,GWECMarketIntelligencehasupgradeditsglobalfloatingwindforecastandpredictsthat18.9GWislikelytobebuiltgloballyby2030,ofwhich11GWwillbeinEurope,5.5GWinAsiaandtherestinNorthAmerica.Itisimportanttoemphasisethatournear-termoutlookisprimarilybasedontheexistingglobaloffshoreprojectpipeline,butourmedium-termoutlook(2027-2031)reflectscurrentdeclarednationalandregionaltargets.GiventheenergysystemreformpackagesstillunderwayinEuropeandotherregionsinresponsetoRussia’sinvasionofUkraineandfossilfuelpricevolatility,itishighlylikelythatthesetargetswillincreasefurtherandGWECMarketIntelligence’s10-yearforecastcouldbesignificantlyrevisedupwardthisyear.Ontheotherhand,thereiscurrentlyanimplementationgapbetweendeclaredtargetsandtherateofannualinstallations.Enablinganaccelerationinoffshorewindenergydeploymentrequiresmeasurestoacceleratepermittingproceduresforwindprojectsinthenear-term,policiestoinitiatestructuralpolicyframeworkchangesinthemid-termandcommitmentsthatcanjustifyearlyandsustainedinvestmentinsupplychainandinfrastructure.Offshore’sshareofnewglobalwindinstallationsissettogrowfrom23%in2021toatleast30%by2031.ExecutiveSummary8GWECGLOBALOFFSHOREWINDREPORT20222021wasarecordyearfortheoffshorewindindustry.With21.1GWconnected,wesawmoreinstallationsthaneverbefore,andcumulativeinstallationsreached56GW,contributing7%oftotalglobalwindpowerinstallations.Countriesaroundtheworldarenowfocussingonoffshorewind,aspolicymakersrecognisethesector’scapacitytotransformenergysystems,displacefossilfuelsandprovidejobsandeconomicgrowth.SinceCOP26,wehaveseena“racetothetop”fromgovernmentsintermsofsettingoffshorewindtargets.Ontargetsalone,theworldisedgingclosertothelevelsofoffshorewindsetoutintheGWEC-IRENAUNEnergyCompact,inalignmentwithanetzeropathway:380GWby2030and2,000GWby2050.Ourmarketoutlookshowsthatby2031cumulativeglobalinstallationswillreach370GW.Lookingintothecomingdecade,AsiawillreplaceEuropeastheworld’slargestregionaloffshorewindmarketbycumulativeinstallationsbytheendof2022,althoughEuropeisexpectedtorecapturethistitlefrom2031.Wealsoseemanynewoffshorewindmarketsnowemergingasseriouscontenders;theUS,Vietnam,BrazilandAustraliaarepoisedtoaccelerateoffshorewindrapidlyinthecomingyears.However,thereisagrowinggapbetweeninstallationsandtargets.Tomeetnetzeroglobally,accordingtotheIEA,theworldneedstoinstall80GWofoffshorewindannuallyby2030andthen70GWby2050.Globalgovernmentsurgentlyneedtoputinplacethepolicyandregulatoryframeworkstodeliveragainsttheirpromises.Thisyear’sreportoutlinesthesignificantchallengesthatindustrygovernmentsandotherstakeholdersfaceintherapidscale-upofoffshoreTheStory:ThenexthorizonGlobalgovernmentsurgentlyneedtoputinplacethepolicyandregulatoryframeworkstodeliveragainsttheirpromises.ExecutiveSummary9GWEC.NETwind.InPartOne,wefocusontheglobaloffshorewindsupplychain.Thereportaskswhethertheglobaloffshorewindsupplychainwillbeabletoscaleuptomeetrapidlygrowingglobaldemand.Thechapteralsodelvesintothesignificantissuesarisingfromincreasingcommodityprices,shrinkingmarginsandgrowinggeopoliticalconsiderationsinthesector.InPartTwo,wefocusonthepolicyactionsthatgovernmentsneedtoenactforarapidincreaseinoffshorewind.Thereportsetsouttheroleofefficientleasingprocesses,andarguesthattheamountofseabedbeingleasedneedstoincreaseinalignmentwithgreateroffshorewindambitionsandtargets.Atpresent,asthelimitedreleaseofseabediscausingthemarkettooverheat,GWECiscallingongovernmentstoincreaseandspeedupthereleaseofseabedleasingoverthenextdecadetomeetclimategoals,andcreateamoresustainablepipelinefortheAtpresent,thelimitedreleaseofseabediscausingthemarkettooverheat.ExecutiveSummary10GWECGLOBALOFFSHOREWINDREPORT2022industry.Thechapteralsoexploresglobalpermittingregimes,andoutlinesarangeofbestpracticemeasuresthatwouldrapidlylowerglobalpermittingtimes.InPartThreewelookatindustrysustainabilityacrossthevaluechain,examiningthefuturechallengestheindustrywillfacewithregardtocriticalmineralsandthedecarbonisedsupplychain.Thechapterfocusesparticularlyontheneedforoffshorewindtobedeployedinharmonywithnature,andhighlightstherolethatmarinespatialplanningcanplayinbalancingtheinterestsofdifferentmarineusers.PartFourlooksatnewtechnologydevelopmentintheindustry,includingoffshorewindturbinetechnologyinnovationandtrendsofturbinedrivetrain.Wesetoutdevelopmentsingreenhydrogenandpower-to-X,andhighlightourrecentreportontheroleoffloatingwind.Ourever-popular“MarketstoWatch”sectiontakesadeepdiveintoemergingandmaturingoffshorewindmarkets.In“ExploringNewMarkets”wefocusonfournewoffshorewindmarketsthataresettoquicklyrisethroughtheranks.Ourdetailedmarketoutlookcanbefoundattheendofthereport.ExecutiveSummary11PARTONE:SUPPLYCHAIN12ChapterSponsor13GWECGLOBALOFFSHOREWINDREPORT2022GWECMarketIntelligence’sGlobalWindSupplySideData2021reportshowsthat10windturbinemanufacturersinstalled3,340unitsofoffshorewindturbinesin2021,makingitarecordyearinoffshorewindturbinedelivery.Ofthe10suppliers,sevenarebasedinChina,twoinEuropeandoneinJapan.ThankstoanastoundinglevelofoffshorewindgrowthinChinadrivenbythefeed-intariffcut-off,ChinesesuppliersdominatedtheoffshorewindrankingslastyearwithSiemensGamesaandVestasdroppingoutofthetopthreefortheveryfirsttime.However,theglobaloffshorewindmarketexcludingChinahasbeendominatedbySiemensGamesa,VestasandmostrecentlyGERenewableEnergy,anduntil2021,noChineseoffshorewindturbineshadbeeninstalledoutsideChina.Globally,16windturbinesuppliersarestillactiveintheoffshoresector,ofwhich10OEMsarebasedinChina.ThismakesChinatheworld’slargestoffshoreturbinemanufacturingbase,followedbyEurope(includingDenmark,Germany,FranceandtheUK),Taiwan,SouthKoreaandJapan.BasedonGWECMarketIntelligence’sthelatestoffshorewindmarketoutlook(seepage84),webelievethatChinahasthecapacitytodelivertheexpecteddemandinthisdecade.InEurope,nobottlenecksareexpectedforoffshorewindturbinesupplyinthenear-term.However,expansionandnewinvestmentmayberequiredinpreparationforstronggrowthfrom2025onward.AstheoffshoremarketcontinuestoglobaliseandmovesintonewmarketsawayfromEuropeandChina,itisbecomingincreasinglyimperativefortoptiersupplychainproviderstoinvestinemergingmarketsreadytosupplygrowingdemand.Comparedwithonshorewind,theglobalsupplychainwhichsitsbehindoffshorewindismorediverse.ItincludesnotjusttheOEMsandkeycomponentsuppliersofnacelles,blades,generatorsandconverters,gearboxes,bearingsandcontrolequipment,butalsosuppliersofcabling,foundationsandsubstations,aswellassupplierstoengineering,procurementandconstruction(EPCs)andotherinstallationcontractors.Thegraphicbelowsetsoutthesplitinvalueforanoffshorewindfarm,highlightingthatalmosttwo-thirdsofthevaluefromoffshorewindcomesfromnon-turbineelements.Thatincludes40%ofvaluefromothercapitalelementssuchassubstructureandfoundations,electricalinfrastructure,andassemblyandinstallation.ForChineseprojects,thissupplychainisalsobasedalmostentirelywithinChina,mirroringthesituationwithOEMsupply.However,fortherestoftheworld,thesupplychainismorediverse.ThesupplychainforcriticalcomponentssuchascablingandfoundationsisdominatedbyEuropeansuppliers,butthereisalsodeepexperienceinAsiaandtheMiddleEast.InstallationcapabilityisfocusedincountriessuchasNorway,theNetherlands,BelgiumandDenmark,butthereisalsogrowthinexpertiseinotherEuropeancountriesaswellasSouthEastAsia.AsweseeongoinggrowthinimportantmarketslikeSoutheastAsiaandtheUS,wearealsoseeinggrowthinsupplychains,throughaGlobaloffshorewindturbinemanufacturingcapacity,2021Note:Windturbinemanufacturingcapacityreferstowindturbinenacelleassemblycapabilityanddoesnotrepresentactualnacelleproductionin2021Source:GWECMarketIntelligence,June2022Europe32.1%Japan1.1%Taiwan3.8%SouthKorea2.6%China60.4%26.5GWSecuringthesupplychainPartOne:SupplyChainGWEC.NET14combinationofinwardinvestment,partnershipsanddiversificationofdomesticplayers.HeadwindsfacingcurrentwindsupplychainContinuedgrowthofoffshorewindrequiresahealthysupplychainabletomeetthedemandsofagrowingpipelineofprojects,aswellassupplyintonewmarketsacrosstheworld.Yettheoffshorewindsector’ssupplychainremainsunderpressurefromrisingcommoditypricesandshrinkingmargins,whichisunderminingtheoffshorewindindustry’sabilitytogrowenoughtomeetrisingglobaldemandandaddressthechallengeofdecarbonisation.Thesepressureshavebeencreatedbyasuccessfulperiodofgrowth,wheretheoffshorewindsectorhasrapidlybroughtdowncostswhiledemonstratingtheabilityofoffshorewindtodeliveratscale.Turbinesizescontinuetoincreaserapidly:rotordiametershaveincreasedbynearly50%to163mby2020,whileturbinesizeshaveballoonedby138%toanaverage8MWoverthelastdecade.1Thegrowthinsizeandcapacityhasbeenastoryofsuccessfulinnovationandinvestmentacrossthewholesupplychain,notjustOEMs.Foundations,towers,cablesandinstallationvesselsuppliersareallworkinghardtokeepupthisrapidgrowth,whilealsolookingattherapidlyemergingfloatingoffshorewindsectoranditsowngrowthneeds.Overthelastfewyears,revenuepressure,pandemic-relatedchallengesinlogisticsandworkforceavailability,theongoingUS-Chinatradeconflictandariseinpricesforrawmaterialsandcommoditieshaveimpactedcostsandprofitabilityacrosstheoffshorewindsupplychain.Astherecentre-impositionofrestrictionsinChinahasalsoshown,thepotentialfordelaysandsupplychainbottlenecksduetonewandongoinglockdownsalsoremainsaconcern.Theglobalwindsupplychainrespondedtocostpressuresasthemarketgrewandasauctionsworkedtobringcostdownintwoways.Firstthroughinnovationandworkingtochangethecostbaseofprojectswithaparticularemphasisontheuseoflargerturbines.Second,withtheexceptionoftheChinesemarketwhereanumberofOEMshaverecentlymovedintooffshorewind,therehasbeenongoingconsolidationintherestoftheglobalmarket,withfewerOEMsactiveacrossthesupplychain.2Despitethis,thesectorremainsexposedtoheadwinds,fromcompetitionforcriticalmineralstolocalcontentrequirementstounexpectedgeopoliticalevents.Theneedforlong-termandadequatelyambitiouspolicyframeworks,aswellasremunerationmechanismsforstablecostreductions,willbeincreasinglyimportantformitigatingsupplychainrisks.Investingahead,scalingupandmovingintonewmarketsInthewidersupplychain,thereisaneedtobuildconfidencesothatinvestmentcontinuestosupporttheCAPEXfortypicalfixed-bottomoffshorewindfarm,2020Source:2020CostofWindEnergyReview,TylerStehlyandPatrickDuffy,NationalRenewableEnergyLaboratory,2021.Note:Thereferenceprojectrepresentsatypical600MWfixed-bottomoffshorewindprojectcomprising75windturbinesat8.0MWeach,operatingfor25yearswithnomajorO&Mevents.Turbine34.7%Development2.3%SubstructureandFoundation12.6%ElectricalInfrastructure17.6%Assemblyandinstallation10.4%LeasePrice4.5%PlantCommissioning0.9%Decommissioning3%Contingency9.3%ConstructionFinance3.9%InsuranceDuringConstruction0.9%BalanceofSystem47.5%SoftCosts17.9%Turbine34.7%1.Renewabletechnologyinnovationindicators:Mappingprogressincosts,patentsandstandards,IRENA,20222.GWEC(2022)GlobalWindMarketDevelopment–SupplySideData2021PartOne:SupplyChain15GWECGLOBALOFFSHOREWINDREPORT2022nextgenerationofprojectsbuiltusinglargerturbines.Installersneedtoinvestinnewvesselsandequipmenttosuccessfullyinstallthesebiggermachines,whileinfrastructurelikeportsmustalsoinvesttoaccommodatetheselargerturbinesandtheanticipatedgrowthinprojectvolume.3Thisistrueeveninmaturefixed-bottommarkets.Infloatingoffshorewindmarkets,therewillbenewchallenges:portrequirementsaresignificantlydifferent,withfloatingplatformsneedingadditionalspaceforfabricationandstorage,aswellasnewanchorandmooringfabricationandmarshallingrequirements.Theseadditionalcapacitydemandswillbeontopofgrowingdemandforlargersitesneededformanufactureoflargercomponents.Inaddition,bothfixed-bottomandfloatingsitesrequirespaceforprojectstagingandassembly.Thefloatingoffshorewindmarketisstillmaturing,however,ithasmultipleplayersandconceptsapproachingahighstateoftechnologyreadiness.Thiscreatesachallengeforportsinfloatingoffshorewindmarketsthatarelookingtoprepareforagrowingvolumeoffloatingoffshorewindactivity,butdonotyethaveclarityoverwhichconceptsorfabricatorstheyneedtobeworkingwith.NotonlydoestheindustryneedtoinvesttomaintaingrowthinmaturemarketslikeEuropeandChina,itisalsoseeingarapidscale-upintheUSandtherestofSoutheastAsia,aswellasemergingdemandinSouthAmericaandthePacific.Thisglobalisationofoffshorewindwilltestlogisticsandsupplychainsthatarealreadyunderpressure.Therewillneedtobeinvestmentinnewmanufacturingandinstallationcapacityinemergingoffshoremarkets,inparttomeetlocalcontentrequirements,butalsotoensuresufficientsectorcapacity.Mostobviously,theUSmarketiscontinuingtogrowwithamulti-GWpipelineinplaceacrossthelengthoftheEasternSeaboard,aswellasanemergingpipelineonthewestcoast.Marketscale,activiststatelegislaturesandsupplychainlawswillleadtonewinvestmentsbothinturbinemanufactureandassociatedindustries.IngrowingmarketslikeSouthKorea,Japan,TaiwanandVietnamtherearedifferingexpectationsonlocalcontent.MostchallengingfortheoffshorewindindustryhasbeenlocalcontentprovisionsinplaceinTaiwan,whichhaveslowedmarketgrowthduetothechallengeofoffshorewinddevelopersfindingsufficientlocalcapability.InothermarketsthepresenceofexistingmanufacturingconglomeratesmeanstherearepotentialpartnerslookingtoworkwithOEMsandothersuppliersasthesemarketsgrow.However,inallofthesenewmarkets,investmentinnewmanufacturingfacilitieswillbedifficulttojustifyifprojecteconomicsremainTurbineDvelopmentEngineeringManagmentSubstructureandFoundationSiteAccess,StagingandPortElectricalInfrastructureAssemblyandInstallationLeasePriceInsuranceDuringContractionDecommissioningBandConstructionFinancingContingencyPlantCommissioningOperationMaintenanceLCOE02040608077LCOE($/MWh)BalanceofSystemSoftCostsTurbineOperationandMaintenanceSource:2020CostofWindEnergyReview,TylerStehlyandPatrickDuffy,NationalRenewableEnergyLaboratory,2021.Note:Thereferenceprojectrepresentsatypical200MWonshorewindplantintheinteriorUS,comprising73windturbinesat2.8MWeach,operatingfor25yearswithnomajorO&Mevents.Component-levelLCOEbreakdownfortypicalfixed-bottomoffshorewindfarmoperatingfor25years,20203.SeeforexamplethisreactionfromleadingportEsbjergtothesigningoftheMayEsbjergdeclarationraisingoffshorewindambitionsinEurope.https://portesbjerg.dk/en/about/news/six-billion-danish-kroner-secure-ambitious-eu-offshore-wind-targetsPartOne:SupplyChainGWEC.NET16challenging.Itwillbehardformaturemarketplayerstojustifyinwardinvestmentdecisionsbasedonlowprices,butequallyhardforindigenouscompaniestomoveintonewmarkets,ifeconomicsremainchallengingincomparisontomarketslikeoilandgas.Theriskiseitherthatprojectsarestalledduetodelaysinmanufacturingcapacity,orthatlocalcontentaspirationscannotbedeliveredupon.Industryisincreasinglyconcernedthatwidercommodityandothercostpressureswillundermineeffortstoaccelerateoffshorewinddelivery.Suppresseddemandcomingoutoftheglobalpandemichascreatedglobalsupplychainpressuresacrosstheglobaleconomy,includingoffshorewind.Growingdemandacrosstheeconomyformaterialslikecopper,steelandrareearthelements(REEs),coupledwithsupplychainbottlenecksmeansthatdemandisoutstrippingsupply,leadingtolong-termsustainedpriceincreases.Lookingatamaterialsbreakdownforoffshorewindfarms,90%ofoffshorewind,intonnesperMWissteel.Butoverthelasttwoyears,steelpriceshaveincreasedby50%fromthestartof2020totheendof2021,andarebeingfurtherimpactedbecauseoftheinvasionofUkraine.Theoffshorewindindustryalsodependsoncopperforcablingandelectrics,yetishavingtomanagepriceincreasesof60%.Pricesforneodymiumanddysprosium,thetwokeyrareearthelements(REEs)fordirectdriveandhybriddrivewindturbines,havetripledinpriceoverthesameperiod.Aparticularchallengeforoffshorewindisthelong-termnatureofprojectplanninganddelivery.Turbinepricesforprojectsarenegotiatedyearsinadvanceofmanufacturinganddelivery,meaningthatpricesarealreadylockedin,leavingOEMsexposedtopricevolatilityandlogisticsrisksoutsideoftheircontrol.Ontopofcommoditypricerisks,logisticsbottlenecksandfreightcostincreasesarealsoimpactingtheglobaloffshorewindsupplychain.Bottleneckshavecauseddeliverytimescalesofsomekeycomponentstoincreasefromfiveweekstoasmanyas50weeks,whilefreightcostshavealsorisen:Bythemiddleoflastyear,spotratesfora40-footoceanfreightcontainerfromAsiatotheUSreachedarecord-high–10timeshigherthanratesjustafewyearsago,particularlyasfreightcontractratesroseaftertheSuezCanalcrisisinMarch2021.4Asaresult,turbinepricesforfutureprojectsareforecasttoriseby9%inthesecondhalfof2021,accordingtotheBloombergNEFturbinepricingindex.Thisincreasewillmakeitevenmorechallengingforwindenergytocontinuetocompeteforrazor-thinmarginsintendersandprocurementschemesaroundtheworld,aswellasimpactontheindustry’sabilitytoinvestinsupplychaingrowthandinnovation.Whiletheseheadwindsarenowwellunderstoodwithinthesector,therearedifferingviewsoverwhetherthesechallengesaretheresultofacommoditysuper-cycle,orjustashort-termblipastheworldadjuststonewbusinessrealitiespostpandemic.Whatisclear,however,isthatoffshorewindasasectorneedstogrowrapidly,bothtosupportthedeliveryofglobalclimateambitions,aswellasaidactiononglobalenergysecurity.Asthisreportsetsout,offshorewindneedstoaccelerateitsgrowthtoplayitspartinkeepingtheworldonatrajectorytonetzero.Butthesegrowthambitionsriskbeingheldbackduetosupplychainleadtimesandpricevolatility.SteelElectronicscrapGFRPCopperCFRPRareearthAluminiumLeadConcrete221t/MW90%5%4%Source:BloombergNEF.Note:GFRP=Glassfiberreinforcedplastic.CFRP-Carbonfiberreinforcedplastic.Materialsbreakdownforoffshorewindfarm4.https://www.bloomberg.com/news/articles/2021-07-15/container-rates-to-u-s-top-10-000-as-shipping-crunch-tightensPartOne:SupplyChain17GWECGLOBALOFFSHOREWINDREPORT2022ThesepressuresimpactnotjustOEMsbutthewholesupplychain.Thecomplexityofoffshorewindprojectscomparedtoonshore,meansthatturbinecostsarealowerproportionofcapitalcosts.Thismeansthatchangesinthecostbaseofcompaniesprovidingcriticalelementsofanoffshorewindfarm,includingthetowers,substations,cables,jackets,aswellascriticalcomponentssuchasgenerators,canalsohaveasignificantimpactonprojectcostsandeconomicviability.Thiswideroffshorewindsupplychain,ofcourse,facesthesamepressuresoncommoditypricingandsupplychainbottlenecks.Installersandshippingprovidersalsofacethesameissues.Thesecompaniesallneedtoinvestinnewequipmentbothtomeetgrowingdemand,andtoadapttobeabletodeliverbiggerprojectsusingbiggerturbines.Companiesmustplanforthelongtermandneedearlyinvestmenttoensuretheyarereadytomeetfuturedemand,butthismeansnegotiatingpricesyearsinadvancetosecurecontractsfromdevelopersorOEMs.Industryisusedtohedgingtohelpmanagedifferentrisks,butasastrategyhedgingisnotsustainableifproblemssuchascommoditypricevolatilityremainoverthelongterm.Ontopofthis,thesectorisnowbeginningtoplanoutanddeliverafirstgenerationofnewGW-scalefloatingoffshorewindprojectsinmarketsliketheUK,France,KoreaandJapan.Thesectorhasalotofconfidencethatcomesfromthevaluablelessonsofscalingupfixedbottomoffshorewind.However,floatingoffshorewindprojectswillneedtobeabletodemonstraterapidcostreduction,whichismademorechallenginginthefaceofwidercostpressuresinthemarket.ManagingsupplychainriskswithintheindustryDespitepressuresonsupplychain,thereisalotthesectorcandotoworktogetheraswellasalongsidepolicymakers.First,itneedstoberestatedthatoffshorewind,alongsideotherrenewables,isavitalcomponentofglobaleffortsfordecarbonisationandforincreasingenergysecurityforall.Thesectorhasdeliveredrapidcostreductionsandisnowabletodeliverpoweratapricecomparabletoorcheaperthanfossilalternatives.Therefore,theprimaryfocusneedstobecreatingmarketsthatprotectconsumerswhilehelpingfast-trackprojects.Asmanycountriesalsowanttoseelocalcontentsuccessfullygrowingashomemarketstakeoff,thisalsomeanspolicymakerstakingonboardtheneedtoensureasufficientpipelineofprojects,sothattheindustryisabletofocusondeliveringasustainablepipeline.Secondly,policymakersneedtounderstandthattheenergytransitionalsorequireseconomicsustainabilityintheoffshorewindsector.Public-privatecooperationonsupplychainrisksThesupplychaincanalsodomoretocooperate,notjustwithinthewindindustry,butwithothersectorscriticaltoourglobalenergytransition.AgoodexampleofthisworkistheagreementbetweenGMandGEtocooperateonREEsupply,linkinginwithrelatedEuropeanandUSeffortstomanagerisksoftheenergytransitionduetogeopolitics020406080100EstoniaMineralsFossilFuelsMalaysiaArgentinaBelgiumFinlandJapanIndonesiaChileAustraliaQatarRussiaChinaUnitedStatesRareearthsLithiumCobaltNickelCopperLNGexportOilrefiningSources:IEA(2020b),USGS(2021),WorldBureauofMetalStatistics(2020);AdamasIntelligence(2020)Shareoftopthreeproducingcountriesintotalprocessingofselectedmineralsandfossilfuels,2019(%)PartOne:SupplyChainGWEC.NETandsupplyconstraintsofcriticalminerals.5EuropeanandUSeffortstoensurethatthewholeenergytransitionisnotderailedbecauseoflackofaccesstosuppliesofthesemineralsmustcontinue.Atthesametime,effortsinsideChinatoensurethattheextractionandprocessingofmineralsisdoneinasustainablemanner,willhelpensurethatexternalitiesareproperlycostedintocommoditypricing,helpingtoensurealevel-playingfieldinthemarket.InthesamewaythatOEMsareleadingeffortstoensurebladesarerecyclable,lookingatnewmaterialsandmanufacturingprocesses,demonstratingsustainabilityandcirculareconomyprinciples,andformingalliancestobringforwardthecommercialisationofgreensteel,theycanalsocooperatewithtoptiersupplierstobuildsupplychainrelationships.Bydoingso,theycanensurewidersustainabilityandrobustsupplychainsforthenecessarycriticalmaterials.OEMscanalsoworkalongsidegovernmentstoinvestinnewmanufacturingprocessesoralternativeproductsthatwillresultinmoreefficientuseofthesematerialsorfindwaystobringalternativestomarket.Policymakerscanplayanimportantroleheretoo.Theyneedtobetterunderstandthechallengeofsupplychainpressuresandtheriskstheseposefortheirownaspirationstotransitiontheireconomytolowcarbonindustriesastheythemselvesshifttocleansourcesofpowerandwiderelectrification.Policymakersneedtobetterunderstandtheimpactofgeopoliticsonourenergytransition,andfollowthroughonpolicieswhichaimtoincreasediversityofsupplyincriticalminerals.Inmanyofthecriticalmineralsneededforoffshorewindmanufacturing,supplyisdominatedbytwoorthreecountries(seethegraphbelow).Thisconsolidationneedstobeaddressedbysupportingbothsustainableextractionandprocessingofcriticalmineralssothatdemandforthesematerialsisnotconstrainedinthefuture.Public-privatecooperationonpriceriskandeconomicsustainabilityAswellaslookingatthesupplyofcriticalmaterialswhichunderpinourenergytransition,governmentsalsoneedtothatensurethatpolicy,5.https://www.ge.com/news/press-releases/general-motors-signs-mou-with-ge-renewable-energy-to-develop-supply-chain-of-rare-earth-support-ev-renewable-energy-growth1819GWECGLOBALOFFSHOREWINDREPORT2022regulatoryandtariffframeworksaredrawnupinawaythatcanrespondeffectivelytofutureupwardpricepressures.ThewarinUkraine,andthesubsequentriseinenergypricesglobally,hasforcedgovernmentstoactivelyengageinandsupportenergymarkets.Thisactionisvitalforprotectingindustryandconsumers,andthereisanunderstandingthattheseareissuesbeyondtheabilityofindividualbusinessesorsectorstomanage.Aparallelchallengeexistsinourenergytransition,however.Asrenewableenergyhasmatured,ithasdeliveredrapidpricereductionsthathavebenefitedconsumers.Partofthecreditforthesecostreductionsmustgotogovernmentswhichhavemovedfromunilateraltariffsthattopupmarketpricestomechanismsthatgivepricestabilityandcreateaceilingoncost.Thisshifthasbeensuccessfulinprotectingconsumers,attractingfinanceandbringingdowncosts.Butwithrenewablesnowclearlylowcost,thereisnowaneedtolookathowtousethesemechanismsasawayofabsorbinginflationarypressure,sothatinvestmentinnewprojectsandassociatedsupplychaingrowtharenotheldback.Thedesignofsupportsystemscanbetterbefactoredinpriceriskintolongtermprojectmanagement,forexamplelinkingcontractpricingtodeliverydates,andensuringthattariffsupportprogrammesareabletoaccountforpricechangesovertime.Inthesamewaythatauctionprocessescurrentlytakeaccountofsupplychainandprojectreadiness,sotheyalsoneedtolookathowtheyhelpremovedeliveryrisksduetochangingcoststhatareoutsideofanindividualprojectoreventhesector’scontrol.Thereareimportantlessonsthatcanbedrawnfromhowgovernmentshavesupportedthegrowthofoffshorewindandotherindustriesseenascriticallyimportant.Forexample,withintheUK,betweentheclosureoftheRenewablesObligationandthecommencementoftheContractforDifferenceregime,theUKGovernmentawardedaseriesofFIDER(FinalInvestmentDecision–EnablingRenewables)contracts.6ThesecontractssuccessfullycreatedapipelineofoffshorewindprojectsandavoidedthechallengeintheshiftbetweensupportmechanismsleadingtoagapinordersatthetimetheUKwasseekingtocaptureandgrowinvestmentinblademanufacturing,cables,andotherinwardinvestments.Contractedtariffswereinflation-indexlinked,protectingcontractsandsuppliersintheeventofinflation.Thereisanopportunitytolearnfromthisexperienceandlookatthedesignoftariffstotakeaccountoffuturepricerisksandchangestocapitalcosts.7Similarlytaxationpolicyhasbeenusedinvariousmarketse.g.,theUS.Whatisclearthoughisthatwhilesupplychainandcostpressuresarecreatingheadwindsformanyintheoffshorewindindustry,thelonger-termoutlookremainsstrong,butwemustavoiddelaysinscalingupoffshorewindbecauseofcurrentandpotentialpersistentcostchallenges,thatareimpactingsectorprofitabilityandsupplychaincompetitiveness,thougharenottakingawayfromthecostcompetitivenessofoffshorewindasanenergytechnology.Thereisaneedtofocusonpracticalstepswithinindustryandgovernmentsothattheoffshorewindindustrycancontinuetogrowanddeliveronwiderambitionstodecarboniseanddelivernewemployment.Offshorewindhasshowninits30-yearlifetimehowitcaninnovateandscaleupeffectively,anditisworkinghardtoensurethatwidersustainabilitygoalsaremaintained.Economicsustainabilityneedstoremainpartofthisefforttoensurethelong-termhealthofthisvitalindustry.6.https://www.gov.uk/government/publications/final-investment-decision-fid-enabling-for-renewables-investment-contracts7.https://www.gov.uk/government/news/future-funding-for-nuclear-plantsPartOne:SupplyChainGWEC.NET20Withtheurgencytorapidlyincreaseinstalledoffshorewindcapacityby2030and2050,keyindustryleadersandnewmarketentrantsforfabricationareinvestingsignificantlyintheexpansionofthesupplychaincapacity.Asfoundationweightanddiametersincrease,capacityfromthepastdecadesisundersizedtomeetthepracticalrequirementsofnewwindtowersizesandinstallationschedule.Leadersinfixedfoundations(jacketsandmonopiles)andfuturefloatingconceptsareinvestingtobuildthefactoryofthefuturetoaccommodateincreasinglylargerturbinesizes.Thefactoryofthefutureisunderwaynow,withnewsitesunderconstructionatallcornersoftheworld.Newfactoriesareincorporatingthehighestlevelsofautomationformetalforming,weldingandmaterialhandlingtomanagethecomplexityofproducingsuchlargestructures,neverfabricatedbefore.Investmentinadditionalsupplychaincapacityandtechnicalcapabilitywillsolvemanyoftheconstraintsexistingwithinthecurrentglobalsupplychain.Thefactoryofthefuturedependsonanexpandingsupplychainofnewsteelmillcapacitiestoreducetheimpactacquisitionandtransportcost.Largerplatesizesaidtremendouslyintheprocessofplatelengtheningandrollingforsuchlargediameterfoundations.Forexample,recentimprovementsinweldingprocessesandplatepreparationisnowconsidered“industry-leadingtoworld-classperformance”whennarrowgroovesareused(photobelowrangingfrom8°to<16°).Atthesametime,lessonslearnedfromotheroperationscommontotheshipbuildingindustryalsoapplytonewfloatingfoundationsconcepts.Theadoptionofnewermanufacturingtechnologyforoffshorewindwilldrivetherequirementstodeliverconsistentquality,withreducedproduction,fabricationandinstallationcost.Theexpansionofhigherlevelsofautomationtechnologyisdrivenbyeconomicandresourcenecessity.Thisisonlypossiblethroughtheintegrationofadvancedadaptiveprocesscontrols,industrialrobotsandcustomizedhardautomationandmetalprocessingequipmentforthenewindustrysizeandweightrequirements.Thiskeyindustrydriveralsobackfillsoneofthelargestchallengestheentireglobalindustryfaces:adecliningbaseofhighlyskilledtradeworkersrelativetodemand.Concerningtheglobalworkforce,noticeableprogressisunderwaywithgrowingpartnershipsmadeupoflocaltradeunions,technologyandtradeschoolstoclosetheworkforcegap.Thesecooperativeindustrybuildingblocksarecriticaltoincreasingtheglobalsupplychaincapacitytosupporttheambitiousglobalproductionrequired.Thereisnodoubtthattheevolvingcomplexityoflarge-scaleoffshorewindprojectswillcontinuetestingglobalsupplychainresiliencyandtheindustrywillneedtorespondinkind.Akeytosuccesswillbeindustryleaders,tradegroupsandsuppliersadvocatingfortheexpansionoftechnology,whowillalsoleadthewaytobuildthefactoryofthefuturetogether.Findoutmorehere:https://www.lincolnelectric.com/enCaseStudy:BuildingtheoffshorewindfactoryofthefutureProvidedby:BryanO’Neil,DirectorGlobalOffshoreandPowerGeneration,TheLincolnElectricCompany100mmcrosssection(avg.steelthickness),Monopile:2200MTweight/99MlongPhotocourtesyofTheLincolnElectricCompanyPartOne:SupplyChainGWECGLOBALOFFSHOREWINDREPORT2022PARTTWO:POLICY21GWEC.NET22‘Leasing’isabroadtermtodescribehowseabedrightsforoffshorewinddevelopmentandoperationarecontracted.Equivalenttermsforleasingvaryfromcountrytocountry.InDenmarkitiscalleda‘concession’.IntheUSitisa‘lease’butwithtwostages,thefirstiscalleda‘SiteAssessment’(forfiveyears)andthesecond,‘Operations’(33years).IntheUKitisdividedintotwoseparatedocuments,thefirstcalled‘AgreementforLease’(upto10years)andthesecond,‘LeaseAgreement’(60years).Duemostlytohistoricalprecedents,thereareverydifferentorganisations,includinggovernmentdepartmentsandpublicbodies,thattenderandawardleasesforoffshorewindaroundtheworld.Forexample:lDenmark–DanishEnergyAgency(DEA)lUK–TheCrownEstate(TCE)andCrownEstateScotland(CES)lNetherlands–RijksdienstvoorOndernemend(RVO)lGermany–BundesamtfürSeeschifffahrtundHydrographie(BSH)lUS–BureauofOceanEnergyManagement(BOEM)lVietnam-MinistryofNaturalResourcesandEnvironment(MONRE)lJapan-MinistryofLand,Infrastructure,TransportandTourism(MLIT)Approachesalsovaryfromcountrytocountry.InDenmark,theNetherlandsandGermanyspecificprojectsitesareselectedanddetaileddataisprovidedaheadofsingle-stagebidding.IntheUK,USandTaiwansomedataissharedbuttheonusisondeveloperstocarryoutdetailedsurveysandgainconsentbeforeenteringthesecondstageofbiddingforapowerpurchaseagreement.Bothapproachesworkandsomedeveloperspreferthattherearediverseapproacheswhichcanhelptomitigateriskacrosstheirportfolios.Thefeesindifferentmarketsalsovary.InDenmarkthereisnofeeforleasing.However,inmostcountriestherearefeesandseabedrentalbutwithvaryingstructures.Generallyspeaking,operatingfeesequateto2%ofgrossrevenuethoughbydifferentmeans.Allleasingmethodsprovideexclusiverightsfor:a.Developmentwhichiscriticalfordeveloperstoinvestupto$100million,inenvironmental,geophysicalandgeophysicalsurveys,consentapplication,engineeringandprocurement,uptofinalinvestmentdecision.b.OperationandmaintenanceofthewindfarmforpowergenerationwhichiscriticaltoraisetypicallyUSD1-2billionofcapitalforequipmentandconstruction.Intwo-stagemarketsitiscommonfortheretobeawideprojectarea,withinwhichthefinalsitecanbeoptimised.Thesamewideareaistrueforcablecorridors,givingflexibilityongridconnectionpoints.Eachleaseagreementhassimilarbutdifferingterms.Itwouldhelptheindustryspeedupdevelopmentandrepeatabilityif,throughgoodLeasingseabedrightsCountryPublicagencyProjectphase/elementRentalUnitsEnglandandWalesTheCrownEstateOperation2%Ofgrossrevenue41NetherlandsTheCentralGovernmentRealEstateAgencyOperation€0.98(US$1.15)PerMWh42Construction€650(US$763)PerMWperyearArraycables€3.29(US$3.86)Perm2(single,one-offpayment)ScotlandCrownEstateScotlandOperation£1.07(US$1.48)PerMWh43UnitedStatesBureauofOceanEnergyManagementConstructionUS$3.00PeracreperyearOperation2%OfgrossrevenueExportcableUS$70.00PermileExamplesofrentalfees(notincludingotherfees)foroffshorewindleasesSource:WorldBankGroup.2021.KeyFactorsforSuccessfulDevelopmentofOffshoreWindinEmergingMarkets.ESMAP,WorldBank,Washington,DC.License:CreativeCommonsAttributionCCBY3.0IGOPartTwo:PolicyGWECGLOBALOFFSHOREWINDREPORT2022practicesharing,greatercommonalityofleasingagreementscouldbearrivedat.Somebestpracticeprincipleshaveemergedinoffshorewindleasing:lLeasingshouldcoverTerritorialWaters(outto12nauticalmiles)andtheExclusiveEconomicZone(outto200nauticalmiles)tomaximiseopportunitiesineachcountry.lMarinespatialplanning(MSP)shouldbeusedtoidentifylargeseaareaswithinwhichprojectscanbelocated.Apragmaticandproportionalapproachcanbeutilised.lLeasingprocessesshouldberobustandtransparent.Thisaidsdevelopersinunderstandingtheprocess.Italsoreducesthepossibilitiesoflegalchallenges.lTenderingshouldcommencewithaprequalificationquestionnaire(PQQ)stagetoensuretenderershavethecapabilitytodeliveronprojects.lLeasingshouldbekeptsimpleandencouragethepaceofdevelopmentwhilemaintainingflexibilityinthelightofunforeseenobstacles.AgoodexampleistheUKRound4AgreementsforLeasewhereonlytwomilestonesareused–materialevidenceofinitialsitedevelopmentandconsentapplication–withflexibilityforforcemajeureevents.lSharingofsurveydataintothepublicdomain,whichallowsotherseauserstobecomeinformed.Notewindresourcedataiscommerciallysensitiveandsoitsreleaseiscommonlydelayedfortwoyearsoruntilpowerpriceauctionsarecompleted.lDepositinghealthandsafety(H&S)dataintoanindustryacceptedsystemallowsimprovedH&Smanagementforthegoodofall.AgoodexampleofsuchassystemistheG+GlobalOffshoreWindHealthandSafetyOrganisation.lRegularreleaseofseabed,forexampleevery2-4years,togiveasteadyflowofprojects.Therenewablessectoriscommittedtosustainabledevelopmentandharmoniousco-existencewithlocalcommunitiesandoceanuserswherewindfarmsarebuilt,aswellasadheringtohighenvironmentalandsocialstandards.Theindustrytakesintoconsiderationtheimpactsofitsprojectsandstrivestodoeverythingitcantoprevent,manageandmitigatethem.Asthesectorgrowsglobally,andtheproportionofseaareathatisusedincreases,thecumulativeeffectsofsitesneedtobebetterunderstood.AleadinginitiativeistheNorthSeaNetGainstudy,ledbyTheCrownEstateinpartnershipwiththeDutch-ledRichNorthSeaprogramme,whichaimstoensurethatdecisionsaboutthenextgenerationofoffshorewindfarmsarebasedonthemostcomprehensiveinformationandwillbringaboutnetgainsforbiodiversity.Thelearningsfromthisworkwillhaverelevanceforothermarkets,thoughtheywillneedtobeadaptedforlocalandregionalcircumstances.Duringtheformativestagesoftheoffshorewindmarket,thecostofseabedrightsfordevelopmentwasnominal.However,in2018,theUSintroducedcompetitiveauctionsfordevelopmentrights.ThiswasfirstadoptedfortheMassachusettsawardofthreewindenergyareasandresultedinoptionfeesthattrebledincomparisontopreviousawards.UnderitsconstitutionBOEMisrequiredtoachieve“fairvalue”for23itslandtransactions.Similarly,TheCrownEstate(TCE),throughTheCrownEstateAct1961,isrequiredtoachieve“bestconsideration”foritsdealings.Therefore,theresultsofBOEM’sauctionssomewhatforcedthehandofTCEtousecompetitivebiddinginRound4.Unfortunately,theresultofRound4intheUK,assumingafive-yeardevelopmentcycle,wasoptionfeessixtimeshigherthanthoseofMassachusettsona$/MWbasis.ThesubsequentNewYorkBightauctionsin2022thendeliveredsimilaroptionfeelevels.Thesefeesequatetoapproximately20%oftotalprojectcapitalinvestment–raisingtheconcernthatthiswillsubsequentlyfinditswayintopricespaidbyconsumers,andalsosqueezeoutsmallerlocaldevelopersattheleasingstage.Thisoverheatingofthemarketappearstobearesultofnewentrantswithdeeppocketsandthelimitedreleaseofdevelopmentseabedintoahungrymarket.TheCarolinaLongBayauctionoftwowindenergyareasinMay2022resultedinoptionfeesalittleunderhalfthoseofRound4andNewYorkBight,likelyasaresultoflessattractivesitesandfewerbidders,buttheyarestillmaterial.Theoverridingchallengeforleasingisthatthecurrentpipelineofprojectsacrosstheworld,especiallyallowingforattritionanddelay,isinsufficienttomeetthelong-termneedsoftheoffshorewindsector.Currentlytherearesome700GWofprojectsindevelopment,1howevermorethanhalfoftheseareattheconceptualorveryearlystages.Thetotalamountwithapprovedconsentorinoperationisjust141GW.Theindustrytarget(inlinewithIEAandIRENA1.5oCscenarios)is380GWby2030andthen2,000GWby2050.GWECthereforecallsongovernmentstoincreaseandspeedupthereleaseofseabedleasingoverthenextdecadetomeetclimategoals,createamoresustainablepipelinefortheindustryandensuresteadydeliveryofoffshorewindbenefitstolocalcommunities.Source:RenewableUKEnergyPulsedatabasePartTwo:Policy24GWECGLOBALOFFSHOREWINDREPORT2022Astheworld’sappetiteforlarge-scaleoffshorewindhasgrowninlinewithincreasinglydemandingclimatetargets,thecomplexityofpermittingsystemscontinuestoconstraindevelopers’abilitytodeliverprojectsatpace.In2022,industryassociationWindEuropereportedthattheEUwasonlyon-tracktoinstallabouthalfofthenewwindcapacityneededtoachieveits40%targetofrenewableswithinthebloc’senergymixby2030.Thesectorcouldseeevenmoreofanuphillstruggleifthetargetisraisedto45%,asrecentlyproposedbytheEuropeanCommission.Globally,atargetof380GWofoffshorewindcapacityby2030hasbeensetundertheUNEnergyCompactsignedin2021byGWECandtheInternationalRenewableEnergyAgency(IRENA).ThisisthevolumerequiredbytheendofthedecadetomeetIRENA’s1.5Candnetzero-compliantenergysystemroadmap.Butdespitegovernments’statedintentiontoprioritiserenewableenergygeneration,thereiswidespreadconcernthatpermittingdelaysarehinderingprogresstowardsthesetargets.Theburdenofcomplexpermittingproceduresisgreaterforoffshorewindprojectsthanmanyotherrenewableenergyinstallations.Theytendtobemuchlargerthanonshorewindfarms,straddledifferentjurisdictionsorusagezonesandrequiretheuseofextensiveareasbothonlandandatsea.TheimpactsofcomplexpermittingproceduresSlow,complicatedandunpredictablepermittingproceduresaffectboththemorematureoffshorewindcountriesofnorthernEuropeandemergingmarketssuchastheUS,JapanandSouthKorea.Everywhere,thetoxicmixofcomplexityanduncertaintydamagestheinvestmentcaseforoffshorewindpowerdevelopmentandultimatelyhampersprogressforthesector.Normally,adeveloperwillneedaninitialpermittoconductsiteinvestigationsanddecidewhethertheprojectisworthpursuing.Severalroundsofconsultationswillusuallyfollow,includingwithoften-oppositionalstakeholderssuchasfishingorganisations,conservationsocietiesandlocalresidents.Inmostjurisdictions,developersneedtosecurepermitsfromseverallayersofgovernment,rangingfromlocaltofederal.IntheUSstateofNewJersey,forexample,aminimumof7permits–5atstateleveland2federal–arerequiredforoffshorewindprojectsplannedwithin3geographicmilesofshoreinstatewaters.Asimilarnumberofpermitsisneededforprojectstobesitedfurtherawayfromshore,infederalwaters.Evenwhenallconsentsaregrantedandconstructionstarts,theroadtoprojectcompletionisnotnecessarilyclear.Constructionofthefirstcommercial-scaleoffshorewindfarminUSwaters,VineyardWindI,startedinNovember2021afteramulti-yeargestationprocess.AlawsuitwasfiledinFebruary2022challengingtheUSDepartmentoftheInterior’s(DOI’s)approvalofthe800MWprojectoffMartha’sVineyard,Massachusetts.ThecasebroughtbytheResponsibleOffshoreDevelopmentAlliance(RODA),whichdescribesitselfasacoalitionoffishingindustryassociationsandfishingcompanies,hingesonanallegedbreachofseveralenvironmentalprotectionlawsbythegovernmentagenciesthatPermittingforoffshorewindParttwo:Policy25GWEC.NET26authorisedtheproject.AttheheartofthelawsuitistheallegationthattheDOI’sBureauofEnergyManagement(BOEM)failedtoadequately“balanceoceanresourceconservationandmanagement”whenauthorisingVineyardWindI.Thissetsadangerousprecedentforthe“enormouspipelineofprojectsthegovernmentplanstofacilitate”,thecomplainantclaims.Thecasehighlightsthelackofsharedrecognitiononthebalanceofinterestsbetweenconservationandrenewablesdevelopment.AlsointheUS,thetrailblazingCapeWindproject,whichwastoinstall468MWofcapacityintheshallowwatersoffMassachusetts,was“litigatedtodeath”after16yearsand$100millioninprivatecapital.Despitepassingstiffenvironmentalscrutinyfromthefederalgovernment,developerEnergyManagementInc(EMI)pulledtheplugin2017aftermorethan20lawsuits.MatureoffshorewindmarketssuchastheUKhavenotbeensparedsimilardifficulties.InMay2022thenaturecampaigninggroupSuffolkEnergyActionSolutions(SEAS)filedanapplicationforajudicialreviewoftheUKgovernment’sdecisiontoapprovetheremaining1.7GWoftheEastAngliaHuboffshorewindclusterofprojects.Whilethetwowindfarmswillbesitedmorethan30kmfromthecoast,SEASallegesthatconstructionworksandonshoresubstationswouldhaveadetrimentalimpactonthelocalfarmland.Approvalofthe1.7GWtranchewasalreadydelayedtoallowformoreextensiveconsultation,includingonwildlifeprotection,causingthedevelopertomissthedeadlineforRound4oftheUK’sContractsforDifference(CfD)auction.AnotherUKoffshorewindproject,Vattenfall’s1.8GWNorfolkVanguard,haditsinitialdevelopmentconsentquashedfollowingajudicialreview,butwasfinallyauthorisednearlytwoyearslater.ItalsomissedthedeadlineforbiddinginRound4oftheCfDauction.TacklingthebottlenecksTheDanishEnergyAgencyintroduceda“one-stopshop”conceptin2020byleadinganintergovernmentalexploratoryphaseduringwhichanypotentialhurdlestodevelopmentareclearedbeforeanapplicationisprocessed.Onceanareaisapprovedfordevelopment,theapplicantisautomaticallyallowedtocarryoutpreliminaryinvestigations,includinganenvironmentalimpactassessment(EIA).Initsfirstoffshorewindenergyroadmap,datingbackto2018,theNetherlandscommittedto11.5GWby2030andidentifiedspecificareasforprojectdevelopment.Italsosetoutconditionsforwindfarmconstruction,includingonlocation,natureprotectionmeasuresandthenecessarypermits.1Byresearchingthestructureofthesite,theseabed,windspeedsandwaterdatainadvanceofbidding,developershaveup-frontaccesstoinformationrequiredfordevelopmentandfinancing.TheNetherlandshassinceraiseditstargetto21GWby2030.AtasummitinMay2022,theNetherlandswasoneoffourNorthSeacountries,alongsideGermany,BelgiumandDenmark,tocommittoacceleratingthebuildoutofoffshorewindtoachieve65GWofinstalledcapacityby2030and150GWby2050.ThepledgewaspromptedinpartbytheenergysecuritycrisisarisingfromthemilitaryconflictinUkraine.Acrucialfactorofthiscommitment,andoftherecentREPowerEUActionPlan,istotacklethepermittingbottlenecksthatareholdingbacktheexpansionofwindandsolarenergy.Thisincludesenshriningaprinciplethatrenewablesareinthe“overridingpublicinterest”,whichwouldstrengthenthehandofdevelopersbyprioritisingthebuildoutofprojectsonacase-by-casebasiswithintheoverarchingaimofachievingclimateneutrality.MeasurestosupportprojectdeploymentStreamlinedandsensiblepermittingschemesforoffshorewindprojectsareneededtoacceleratedeploymentandminimiseprojectattrition.Thefollowingmeasuresshouldbeconsidered,amongothers:lMandatedmaximumleadtimestopermitwindenergyplants,suchas3yearsforoffshorewindprojects,withadditionaldiscretionarytimeallowanceunderextraordinarycircumstances.lDigitised,searchableandup-to-datedatabasesforsitingofhttps://www.government.nl/topics/renewable-energy/offshore-wind-energyPartTwo:Policyprojects,includinganinventoryoflocalordinancesandrecordsofwhereenergyprojectshavemetcommunityresistance,whichcansupportlocalauthoritieswithzoningforprojects.lDedicatedcentralisedauthoritiesandsinglefocalpointswhocanworkwithoffshorewinddeveloperstostreamlinethesitingandpermittingprocess.lMorestaffanddigitalresourcesforthevariousauthoritieswhichmakedecisionsduringthepermittingprocessofanoffshorewindproject.lTransparentlandandoceanuseguidance,alignedatthenationalandsub-nationallevels,whichprioritisesDNSH,greeneconomyandnature-positiveinitiatives,andevenidentifiesareassuitableforwindprojectswhereplanningcouldbefast-tracked.lActivedialoguebetweencommunitiesandindustrythroughoutthelifecycleofawindproject,particularlyindevelopingeconomieswhereenergyjusticeandenergysovereigntyareemergingnarratives.lWherelocaloppositionandNIMBYismisparticularlychallenging,policymakerscanconsiderencouragingcommunitybenefitschemesattachedtorenewablesprojectstoimprovepublicsupport.lAclearinghousemechanismforlegaldisputestopreventextendeddelaystocriticalinfrastructureprojects,andastructuredandtime-limitedprocessfordeveloperstoprovideevidence.MakingoffshorewindtheoptionofchoiceWhileinvestorshaveshownaninsatiableappetiteforoffshorewind,thegapbetweenambitionandrealityappearstobewidening.Withoutstreamlinedproceduresthatgrantpermitsthroughcentralisedsystemsandhelpdevelopersnavigateapprovalprocedures,offshorewindprojectsrisklosingouttootherinvestmentopportunitiesthatarelessexposedtothevagariesofmulti-layereddecisionsbydifferentinstitutions.Excessivelylengthypermittingprocessescanalsoresultinoutdatedequipmentbeingusedonaproject,giventhefastpaceoftechnologicaladvancesandtheriskoffurtherdelayingconstructionbyapplyingforamodificationtotheoriginalprojectdesign.Theincreasinglylargeamountsofenergythatoffshorewindprojectsgeneratewillneedtobedeliveredtorobusttransmissionnetworks.Gridupgradesarealsoburdenedbyslowbureaucraticprocedures,dependentastheyareonsignificantcapitalinvestmentandcommunityconsent.Eveninmarketswhereprojectdevelopmenthasbeenfast-tracked,forexampleinChina,gridconstraintshavecausedconnectiondelays.Planningforamassiveincreaseinoffshorewindinstallationsrequiresseveralcrucialandefficientsteps,fromlandallocationtobuildingpermitstogridconnections.Whiledifferentmarketswillchoosedifferentapproaches,itisclearthatamorecoordinatedpermittingstrategyisessentialtoensurethesuccessofoffshorewinddeploymenteverywhere.PartTwo:Policy27PARTTHREE:SUSTAINABILITYOFTHEINDUSTRYChapterSponsor2829GWECGLOBALOFFSHOREWINDREPORT2022Theoffshorewindindustryispoisedtobecomeoneofthemostimportantcustodiansofouroceansintheyearstocome.Staggeringprojectedgrowthfortheindustryisnowbringingoverallindustrysustainabilityconsiderationstothefore,asstakeholdersinsideandoutsidetheindustrybegintoimaginethevolumeofwindturbinesexpectedoutatsea,andtheimpactthiswillhaveontheenvironmentandeconomy,bothlocallyandglobally.Itisnolongerenoughforoffshorewindtosimplyproducecleanelectrons.Asapillarofourworld’sfutureenergymix,agreatdealofresponsibilityisnowattachedtotheanticipatedgrowthtrajectoryexpectedforoffshorewindtechnologyontheroadtonetzeroby2050.Theoffshorewindindustry’s‘licensetooperate’isbeingheldtoanincreasinglyhighstandardbygovernments,widerindustryandcivilsociety.Theindustryisproactivelyansweringthiscall,respondingtocriticismandembracingtheresponsibilitythatcomeswithbeingakeypillaroftheworld’sfutureenergymix.Thewide-rangingissueof‘sustainability’inoffshorewindwillbeaddressedacrosstwodimensions.Thefirstbeingsustainabilitychallengesassociatedwiththeexpectedgrowthandexpansionofoffshorewind,inlinewithglobalclimategoals.Thesustainabilityofoffshorewindgrowthcomesdowntotheindustry’ssupplychainandthematerialsrequired,andhowbothofthesearemanagedandsourced.Theseconddimensionisaboutoffshorewind’scoexistencewiththenaturalworld,wherechallengesrelatedtotheocean’sbiodiversitymustbeconsidered.Asaresponsiblecustodianoftheocean,itisincumbentontheindustrytoensurethehealthoftheenvironmentisbothprotectedandevenenhancedwherepossible.MakingoffshorewindatrulysustainableenergyOffshorewindhasthelowestgreenhousegasemissions(GHG)footprintofallenergytechnologies.FulllifecycleGHGemissionsassessmentsprovideanimportantbenchmarkingexercisetounderstandtheemissionsattachedtovariouselectricitygenerationtechnologies.TheIPCC’sAR5report,representingtheglobalscientificconsensusonenergysystemsandclimatechangeshowsthatarangeoftechnologiescanprovideelectricitywithlessthan5%ofthelifecycleGHGemissionsofcoalpower–withoffshorewindhavingthelowestemissionsofthemall.Forwindandotherrenewableenergytechnologies,emissionsaremainlyassociatedwithmanufacturingandinstallationactivities.FurtherreductionsoflifecycleGHGsinthesesegmentsSustainabilityofoffshorewindindustrygrowth0CoalGasBiomassGeothermalHydropowerNuclearSolarPV-UtilityWindOnshoreWindoffshore(gCO2eq/kWh)500100015002000LifecycleEmissionsasestimatedinAR5MethaneInfrastructureandsupplyChainEmissionsDirectEmissionsComparativelifecycleGHGemissionsbyelectricitytechnologySources:AR5-IPCCWGIIIFifthAssessmentReport,(Caduffetal.,2012;DaleandBenson,2013),(ArvesenandHertwich,2011),Wind(ArvesenandHertwich,2012),PV(Kimetal.,2012;Hsuetal.,2012),geothermalpower(Sathayeetal.,2011),hydropower(Sathayeetal.,2011;Hertwich,2013),nuclearpower(WarnerandHeath,2012),bioenergy(Cherubinietal.,2012).AnnexII,AnnexII.6.3andSectionA.II.9.3formethodologicalissuesandcoreliterature.Note:Lifecycleemissionsfrombiomassarefordedicatedenergycropsandcropresidues.PartThree:SustainabilityoftheIndustryGWEC.NETcouldbeattainedthroughcleanerproduction,rawmaterialsalternativesandimprovementsinperformanceandefficiency.Despiteoffshorewindenergy’slowfulllifecycleemissions,sustainabilitychallengesarebeingacteduponwithnewinnovationstoreachnetzeroand“wastezero”throughacirculareconomyapproachwithinthisdecade.Theamountofsteelusedinoneturbineisintherangeof107-132kt/GW,accountingfor24%ofthetotalmaterialsinanonshoreturbineand90%ofthetotalmaterialsinanoffshoreturbine.1Thesteelandconcreteneededforwindturbinesarelargelyproducedfromcarbon-intensiveprocesses,whichhasledtothecreationofnewinitiativessuchasTheClimateGroup’sSteelZero–apartnershipwithResponsibleSteeltoaddressdecarbonisation.LeadingoffshorewinddeveloperssuchasØrsted,IberdrolaandVattenfallandturbinemanufacturerssuchasSiemensGamesahaveannouncedtheircommitmentto100%netzerosteel.Offshorewindcompaniesthathavejoinedtheinitiativehavesetinterimtargetsofusing50%lowemissionsteelby2030,settingaclearpathwaytobeingnetzeroby2050.Enhancedcollaborationbetweenthesekeyupstreammaterialssectorssuchassteelandtheoffshorewindindustrysendsastrongdemandsignaltosteelandconcreteproducers.However,aclearpathwaytodecarbonisingsteelproductionisstillneeded,wherethereisaclearroleforwindenergytopowerthedecarbonisationoftheseupstreamproductionprocesses.BuildingasustainablesupplychainforcriticalmineralsThesustainabilityofthesourcingandprocessingofrareearthelements(REEs)isaparticularlykeyissueforoffshorewind.AccordingtoGWECMarketIntelligence,nearly30%ofthewindturbinesinstalledin2020useddirectandhybriddrivegeneratorswhichrequiredneodymiumanddysprosium,primaryREEs,forpermanentmagnets.Thatshareisexpectedtoincreasetomorethan45%by2025,giventhatmostoffshorewindturbinemodelsusepermanentmagnetgenerators.Amegawattofdirectdrivewindturbinecapacitymayrequirearound500kgofpermanentmagnets,athirdofwhicharemade1.Ina221t/MWoffshorewindand640t/MWonshorewindfarm,accordingtoBloombergNEF.PartThree:SustainabilityoftheIndustry3031GWECGLOBALOFFSHOREWINDREPORT2022PartThree:SustainabilityoftheIndustryRapidgrowthinoffshorewindcapacityoffersastrongdemandopportunityformetalsproducers.Butitalsopresentslargechallengesforthewholeindustrysupplychain.Herewehighlight3ofthem:decarbonisation,materialsavailability,andpricevolatility.RenewablesneeddecarbonisedmaterialssupplySwitchingtheworldtorenewableenergyisapowerfulmethodofdecarbonisation.Supplychainstobuildthatrenewablescapacitythemselvesneedtobedecarbonisedtoachieveatrueenergytransition.Offshorewindissteel-intensivebutproducingsteelisCO2-intensive.CRUdatashowsthatmakingplatesteel-typicallyusedformonopileconstruction-usingablastfurnacetodayemitsaglobalmedianof2.4tCO2/tsteel.CompaniesdevelopingoffshorewindprojectsaretargetingnetzeroScope3emissions.Low-CO2steelmustbesourcedtoachievethis.Butdecarbonisingsteelproductionisahugetask,requiringmassivecapitalexpenditure,processflowsheetchangeandsufficientsupplyofenergyandrawmaterials.Themarketopportunityexistsbutcanitincentiviseallofthesetooccur?Areenoughmaterialsavailable?Thequestionofmaterialssupplytooffshorewindhasparticularresonanceinwireandcable.Includinginstallationcosts,itcanaccountforalmost17%ofthetotalprojectcostofanoffshorewindfarm.Thisisduetotheextensiveusageofhigh-valuesubseaexportandarraycablesandthesophisticatedcable-layingworksrequiredbyspecialistvessels.CRUforecastsglobalsubseacabledemandinoffshorewindapplicationswillgrowbyatleast17%CAGRbetween2022-2027.However,weforeseeaclearchallengeforsubseacableproducerstomeetsuchexceptionaldemand.Outofthousandsofcablefactoriesworldwide,only30sitescancurrentlyproducesubseacableduetorelativelyhightechnicalandcapitalentrybarriers.Consequently,aEuropeanoffshorewindorinterconnectorprojectownermayneedtowaitforuptofiveyearsforcabledeliveryifplacinganordertoday.Theissueisfurthercomplicatedbyanaversiontonon-domesticcablemanufacturers.Large,long-lifeprojectsneedtomanagetheirpriceriskAssumingtheabovechallengescanberesolvedthereremainsanimportantquestionofhowtomanagematerialspricevolatility.Thiscanbeextreme:therewasadifferenceofmorethan3timesbetweentheminimumandmaximumsteelplatepriceinGermanysinceJanuary2021.A100,000torderplacedatthehighestpricewouldhavecost€125Mmorethanifitwasplacedatthelowestprice.Purchasingteamsinoffshorewindthereforeeitherhaveahugechallengeofmarkettiming,ortheyneedtobeequippedwithriskmanagementtools.Indexingtheirpurchasestosteelprices,likethosediscoveredbyCRU,offersapowerfulsuchtool.Itremovesmarkettimingrisk,createsafairdistributionofvaluebetweensellerandbuyer,andallowscommercialdiscussionstofocusawayfromthefraughtareaofpriceandinsteadonothervalue-addingareasofthesupplypartnership.Findoutmorehere:https://www.crugroup.com/CaseStudy:ThreekeymaterialschallengesasoffshorewindgrowsProvidedby:CRUMV/HV/EHVsubseacableconsumptioninoffshorewindapplicationsLockinginallprojecttonnesatonepointinthepricecyclecangiveveryvolatileresultsCumulative‘000core-kmandCAGR2022-2027NorthAmerica2278CorelengthcableCAGR(2022-2027)1548ChinaEuropeNorthEastAsia52.120.815.19.2Morethan3xchangeinspotpriceGermansteelplatebaseprice,€/t01,0002,00006/01/2106/02/2106/03/2106/04/2106/05/2106/06/2106/07/2106/08/2106/09/2106/10/2106/11/2106/12/2106/01/2206/02/2206/03/2206/04/2206/05/22GWEC.NETPartThree:SustainabilityupofREEsfordirectdriveoffshoreturbines.2By2030,demandforREEsinthewindindustryislikelytodoublefromtoday’snumber.Thishigherdemandleadstotwokeyconsiderations:addressingthesustainabilityoftheminingandprocessingofREEsthroughinternationalcooperation,policyandregulation,andhowinnovationcanreduceoffshorewindenergy’srelianceonREEs.Governmentsrepresentingleadingoffshorewindmarkets,suchastheEuropeanUnion,theUnitedStates,ChinaandJapanaretakingproactivestepstoaddressthesustainabilityoftheglobalsupplyanddemandforREEs.EuropehasestablishedtheEuropeanRawMaterialsAlliance(ERMA),whichhasinitiallyfocusedonREEs.IntheUnitedStates,inthecontextofPresidentBiden’ssweeping$2trillioninfrastructurelegislation,anexecutiveorderwassignedinFebruary2022designedtoreviewgapsinthedomesticsupplychainsforREEs,medicaldevices,chipsandotherkeyresources.Furthermore,theDepartmentofEnergyannouncedaUSD30millioninitiativethatwilltapintoresearchingandsecuringtheUSdomesticsupplychainforREEsandotherimportantmineralsinbattery-makingsuchascobaltandlithium.Japan,acountrywithoneoftheworld’smostambitiousoffshorewindtargets,wasforcedtotakemeasurestosecureitsownsupplyofREEsfollowinganembargofromChina.TheJapanesegovernment’sapproachtoregulatingtheirownREEdepositsalongwithbilateralofftakeagreementswithAustralianproducersisnowseenasavaluablemodelfortheUSandothercountries,asawayofcreatingamorebalancedapproachtoproduction,supplyanddemandforREEs.Aboveall,internationalcooperationmustleadtoafair,sustainablemarketwithlongtermpricevisibilityforbuyersanddemandcertaintyforproducers,givenREEs’keyroleintheenergytransition.What’smore,publicandprivatesectorstakeholdersacrosstheglobaloffshorewindindustrymustworktogethertoensureenvironmentalandsocialconcernsthroughtheproductionandprocessingofREEsareaddressedinparallel.InnovationalsoholdssignificantpotentialinaddressingthesustainabilityissuesassociatedwiththeprojecteddemandofREEs.Inthefuture,asrareearthelementsbecomescarcer,high-temperaturesuperconductorscouldbeusedinoffshorewinddirect-driveturbines.ThisnewtechnologicaldevelopmentwouldnotonlycutrelianceonREEsbutwouldalsoenhanceperformanceduetoanoveralldecreaseinweight.However,furthercostreductionsandtechnologicalprogresswillbenecessarybeforethistechnologycanbedeployed.CoexistingwithbiodiversityTheimpactonbiodiversityfromoffshorewinddevelopmenthasemergedasacrucialissueforprojectdevelopers,astheindustrypositionsitselfasaresponsiblecustodianoftheocean.Itisincumbentontheoffshorewindindustrytoensurethehealthoftheenvironmentisbothprotectedandevenenhancedwherepossible.Inordertomitigatenegativebiodiversityimpacts,projectdevelopersareinvestinginnewsolutionsandapproachestobetterunderstandmarinebiodiversityandhowoffshorewindcanharmoniouslycoexistwithitsnaturalenvironment.Asevidencedbytheinitiativesalreadyinplace,achievinganacceptablelevelofcoexistencePartThree:SustainabilityoftheIndustry2.Criticalmaterialsfortheenergytransition:Rareearthelements,Technicalpaper2/2022,IRENA32GWECGLOBALOFFSHOREWINDREPORT2022betweenoffshorewindandmarinelifewillrequireunprecedentedcooperationbetweenindustry,government,NGOsandacademia.SignificantworkisunderwayincurrentoffshorewindmarketsintheNorthSeatoassesstheimpactsofexistingoffshorewindfarms,andtobetterplanforfutureones.AcrosstheNorthSea,whereoffshoredevelopmentismostadvanced,newinitiativessuchastheNorthSeaGainstudyledbytheUnitedKingdom’sCrownEstateinpartnershipwiththeDutch-ledRichNorthSeaprogramme,hascreatedanewinternationaldatacollationexercisebringingtogetherseabedbiodiversitydatafromacrosstheNorthSeaintoacentraldataset.Thestudyaimstorespondtoanurgentneedtoimproveunderstandingofthebiodiversityoftheseabedonalargerscaleandensurethatdecisionsonthenextgenerationofoffshorewindfarmswillbebasedonthemostcomprehensiveinformationandwillbringbiodiversitynetgain.GWECisalsoworkingcloselywithUNGlobalCompact,whichisleadinganinitiativeonmarinespatialplanning(MSP).ThefocusofthisworkstreamistoestablishbestpracticetoolsandguidanceonMSP,aswellascollaboratingonresearchinitiatives.Newinnovativetechnologiesarenowavailabletominimisetheimpactofoffshorewindonmarinelife,tobetterunderstandmarinelifeactivityandtoreduceimpactssuchasunderwaternoisethroughtheconstructionphase.IntheUS,wheresignificantoffshorewindiscurrentlyindevelopment,leadingprojectdeveloper,Ørsted,haspartneredwithRutgersUniversity,WoodsHoleOceanographicInstitutionandtheUniversityofRhodeIslandontheEcosystemandPassiveAcousticMonitoring(ECO-PAM).Thegoalofthisinitiativeistobetterunderstandthehabitataswellasthepresence,distributionandseasonalityoftheendangeredNorthAtlanticrightwhalewithinØrstedleaseareas.AcrossdesignatedoffshorewindareasfromtheNorthSea,theUSandevenTaiwan,technologiessuchasthe‘bubblecurtain’arebeingemployedtoreduceunderwaterdisturbancestomarinemammalsandothermarinewildlife.Leadingindustryplayersarealsoanticipatingandmitigatingtheimpactsofnewtechnologicaldevelopmentssuchasthenextgenerationoflarge-scaleturbinesandfloatingoffshorewindinstallations.Ørsted,OceanWinds,andVattenfallhaverecentlyjoinedtheSustainableInstallationofXXLPartThree:SustainabilityoftheIndustry33GWEC.NETMonopiles(SIMOX)projectthatfocusesondevelopingseveralinnovativetechnologiesthatcouldbesuitablefortheinstallationofXXLmonopiles,asanalternativetoconventionalimpacthammering.TheprojectaimstohaveinnovativetechnologiesfortheinstallationoflargewindturbinescommerciallyavailablewithinfiveyearsfromthelaunchbytestingmultipletechniquestoenabletheinstallationanddecommissioningofXXLmonopilesinasustainable,cost-effective,andsociallyandenvironmentallyresponsiblemanner.Intermsoffloatingoffshorewind,Equinor’sHywindScotlandprojectteamisanalysingtheenvironmentalDNAfromwatersamplestomapanypotentialeffectsfromfloatingoffshorewindfarmsonmarinelife,insteadofemployingthetraditionalmethodofusingdedicatedvesselstotrawlareasovertimetoperformstudies.Asevidencedbytheseinnovativeinitiatives,theoffshorewindindustryisleadingthewaybybringinginpartnersacrossgovernmentandacademiatocollaboratewithcompanies’growingin-housecapacitytoaddressandminimisebiodiversityimpacts.However,whatisbecomingincreasinglyclearisthatthereisnotemplateor‘onesizefitsall’approachtoaddressingbiodiversity,asconditionsvarybetweenregionsandeachrequiresitsownspecificin-depthunderstanding.Despitethegrowingconsensusonoffshorewindasakeyclimatesolution,andthemanyofproactiveactivitiesunderwaytoaddresstheoverallsustainabilityoftheoffshorewindindustry,challengesandcriticismsarestillbeingvoiced.Whatisclearhoweveristhattheindustryhasalreadymadesignificantprogressthroughopencollaborationwithawiderangeofstakeholders,bothonlocal,nationalandinternationallevels,toaddressitskeysustainabilityissues–fromdecarbonisingitssupplychainandsustainablysourcingitscriticalmaterials,totakinginnovativestepstoensureaharmoniousco-existencewithbiodiversity.Astheoffshorewindindustryemergesasoneofthemostprominentcustodiansofouroceans,itremainscommittedtolearninglessonsfromotherindustriesandstakeholdersoccupyingoceanareastoensurethedevelopmentandgeographicexpansionoftheindustryisgroundedinsustainableeconomicgrowthandcoexistencewiththenaturalworld.PartThree:SustainabilityoftheIndustry3435GWECGLOBALOFFSHOREWINDREPORT2022PartThree:SustainabilityoftheIndustryHarnessingnaturalresourcesforrenewableenergygenerationisthemostsustainablewayofmitigatingthedangerouseffectsofclimatechange.Butasthesetechnologiesrolloutatscaleoverthenextdecades,thereisariskthat,withoutcarefulmanagement,thetransitiontonetzerocouldcomeattheexpenseofthesurroundingecosystemclosetotheseassets.That’swhySSERenewables,whichiscurrentlyconstructingmorethan4GWofoffshorewind,haveteamedupwithtechnologyleadersMicrosoftandAvanadeonaseriesofdigitalinnovationprojectswhichcouldchangethewayrenewableenergyisdeveloped,constructedandoperated.Throughthepartnership,thecompanieshaveimplementedaspeciesmonitoringtechniqueusingartificialintelligence(AI).AspartofaplanningconditionforitsoperationalBeatriceoffshorewindfarmoffthenortheastcoastofScotland,SSERenewablesisrequiredtomonitorlocalpuffincolonies.FourcameraswereinstalledontheIsleofMaytopilottheuseofAIforspeciesmonitoring,gatheringfootageandautomaticallydetectingandcountingthebirdsduringtheirbreedingseason.TheAItechnologylearnednottocountthesamepuffintwiceinthefieldofview,meaningthemethodproducedhighlyaccurateresults.ThepuffinmonitoringprojectrepresentedthemostsophisticatedspeciesmonitoringSSERenewableshadeverundertaken.Coretoitssuccesswasdevelopmentoftheprojectwithenvironmentalandnaturalheritagestakeholders,NatureScot.SSERenewableshasnowgoneontousethetechnologyforcountingsalmonatitshydrostations,withplanstousethetechnologyatmoresites.SSERenewables,MicrosoftandAvanadehavegoneontoworktogethertoestablishwhatcouldbetheworld’slargestdigitalresearchprojectofitskind:SSERenewables’tenderapplicationfortheHollandseKust(West)projectincludesafocusonhowinnovationcanassisttherolloutofoffshorewindfarmstomeettheDutchGovernment’sambitioustargets.Theconsortiumplanstounderstandtheimpactsofthewindfarmonthesurroundingecosystemthroughthecreationofa‘digitaltwin’ofthesite.UsingLIDAR,Sonar,hydrophonesandAI,amongstothertechnologies,thedigitaltwinwillshowinreal-timewhatisgoingonbelowthesurfaceofthewater,enablingcauseandeffecttobemodelledinaverytransparentway.ArequirementoftheDutchGovernmentisthatthisdatamustalsobeopensource,meaningthatunprecedentedamountsofdatawillalsobecollectedandsharedwiththepublic.Byconductinglarge-scaleresearchintotheeffectsofwindfarmsonthesurroundingecosystems,SSERenewablesbelievestheseground-breakingprojectswithMicrosoftandAvanadewillfacilitateresearchandcollaboration.Theseinnovationsenablelearninginreal-timeonhowtolimitandavoidnegativeimpacts,whilepromotingthepositiveonesandofferingincredibleopportunitiestosupporttheprotectionandenhancementofnaturalhabitats.Findoutmorehere:https://www.sse.com/news-and-views/2021/09/bird-s-eye-view-sse-partners-with-microsoft-avanade-and-naturescot-for-cutting-edge-puffin-monitoring-pilot/CaseStudy:InnovationtoprotectandenhancenaturalhabitatsaroundoffshorewindfarmsProvidedby:SSERenewablesGWEC.NET36PartThree:SustainabilityoftheIndustryOuroceansholdvitalsolutionsformeetingtheUN’sSustainableDevelopmentGoals(SDGs)andforsupportingclimatechangemitigation,byrestoringrichbluecarbonecosystemssuchasmangrovesandseagrasses,andthroughsustainable,low-carbonaquaculture.4However,atpresent,offshorewindrepresentsthechiefocean-basedclimatemitigationsolution.5ThecontinuedadvancementofoffshorewindshouldbeastrategicpriorityforcountriesstrivingtomeettheGlasgowClimatePactandcreateasustainablefuture.However,thesignificantnumberofoffshorewindprojectsthatareeitherinthepipelineoralreadydevelopedisleadingtorisingtensionsandpressuresontheamountofavailableoceanspace.6Whilethedemandforoceanspaceissofaronlyrisingamongstindustrystakeholders,theamountofspaceassignedtospatialconservationmeasuressuchasmarineprotectedareas(MPAs)isalsosettoincrease.7MSPhasemergedasanimportantprocesstodrivethefairandsustainableintegrationofoffshorewindintothecontextoftraditionalmarineuses.MSPhasbeenrecognisedbybothindustryandgovernmentsasatoolthatcanimprovethelevelofcertaintyandpredictabilityofoffshorewinddevelopment.Ifdonewell,MSP,accompaniedbyaStrategicEnvironmentalAssessment(SEA),caninformsiteselection,lowergovernmentregulatorycosts,streamlinedevelopmentsbymitigatingrisksoflitigation,speedupdeliveryandinvestmentandeasepermittingprocesses.8TheprocessofMSPisanimportantwayofbringingstakeholderstogethertoexploresynergisticco-existencewitheachother,ourenvironmentandwithcommunities.Multi-stakeholderplanningcancreatemanagementactionsthatareacceptedandsustainedovertimebyengagingacomplexsetofstakeholders,theirinterestsandexpectations.ButMSPneedstoadapttotheclimateemergency.WhilethereisalreadyconsiderableefforttodevelopandimplementMSPworldwide,thereisanurgentneedtoensurethatMSPis‘climate-smart’.Currently,onlyafewmarinespatialplansintegrateadaptationandmitigationtoclimatechangeintheirobjectivesandplanningframeworks.MSPisaforumforsocialandpublicdiscussion.Ifdoneright–usingaMarinespatialplanningforoffshorewind3.UnitedNationsGlobalCompact,TheOcean-climateNexus:ABlueprintforaClimate-SmartOceantoMeet1.5°C,p.13(2021),availableathttps://ungc-communications-assets.s3.amazonaws.com/docs/publications/_Blueprint%20for%20a%20Climate-Smart%20Ocean%20to%20Meet%201.5%C2%B0C.pdf.4.HighLevelPanel,OceanasaSolutiontoClimateChange5.ForanexampleinFrance,see“France’soffshorerenewablestrategyfacespushbackfromfishermen”;andinSouthKorea,see“FishermenthreatenSouthKoreaclimateplans”.6.BlueAcceleration,SRC7.IntheEuropeanUnion,theNorthSeaPlancutthecostofoffshorewindpermitsintheNetherlandsbytwo-thirdsTheBlueAccelerationSource:“TheBlueAcceleration:TheTrajectoryofHumanExpansionintotheOcean,”Jouffrayetal.,Perspective,January2020.37GWECGLOBALOFFSHOREWINDREPORT2022climate-smartapproach,itcanbeanopportunitytobuildclimateliteracyandensureajusttransitionthroughbuildingsocialandcommunityacceptancefornetzeropolicies.Inaddition,decisionsupporttoolsarealreadybeingusedbyplannerstoassessthesocioeconomicimpactsofplanningmeasures,includingsitingofoffshorewindfarms,therebyseekingtomaximisesocietalbenefitsforall,inparticulardisadvantagedcommunities.9WhileMSPiscriticaltoensuringthattheplacementofoffshorewinddoesnoharmtooceanecosystems,bringingtogetherprojectplanners,industryandconservationorganisationshasalsoprovenbeneficialforidentifyingimportantareasforfutureresearch,aswellasopportunitiesforsynergieswithnature.Forexample,nature-inclusivedesignsuchassmartoffshorewindfoundationsandscourprotectionservingasanartificialreef,canboostlocalbiodiversityandsupportlocalfishstocks.10Intheseexamples,informalengagementopportunitiesoutsideofanMSPprocess,facilitatedbyauthorities,haveprovensuccessful.11Thesameappliesforoceanusers.WhileMSPhasbeenpraisedasaprocesstoreduceandresolveconflictsandbuildtrust,12itcanalsobeanopportunityforactivesynergyexploration,forexamplethroughoceanmulti-use.Offshorewindcanforeseeablybeco-locatedwithothermarineindustries,suchastourism(e.g.,boattours),low-trophicaquacultureorcertaintypesofpassivefisheries.13Alongsidetheroleofgovernmentsinmitigatingrisk,cross-industrialcollaborationhasalsobeenidentifiedasakeyenablerformulti-use.14Theoffshorewindindustrycanalsosupportmoreclimate-smartMSP.TheindustrycanprovideevidencetoenableMSPauthoritiestodevelopwell-informedplansbyprovidingnon-commerciallysensitivedataassets.High-quality,real-timedataiscollectedatoperationalsitesandisalreadybeingsharedthrough8.https://www.researchgate.net/publication/331683126_Spatial_Economic_Benefit_Analysis_Facing_integration_challenges_in_maritime_spatial_planning9.Orsted/Iberdrolacasestudies.10.Dutchcommunityofpractice11.Forexample,studieshaveshownthatfishersaresignificantlymorelikelytosupportaplaniftheybelievedtheconsultationoftheplanwasadequate(BlauandGreen(2015)12.AngelaSchultz-Zehdenandothers,OceanMulti-UseActionPlan(Edinburgh,2018),availableathttps://www.submariner-network.eu/images/news/MUSES_Multi-Use_Action_Plan.pdf.13.Stuvieretal(2020)StakeholderInvolvementinTechnologicalDesign:LessonsLearnedfromtheMERMAIDandTROPOSProjects.14.Stuvieretal(2020)StakeholderInvolvementinTechnologicalDesign:LessonsLearnedfromtheMERMAIDandTROPOSProjects.Source:UNGlobalCompact(2021)RoadmaptoIntegrateOffshoreRenewablesintoClimate-SmartMarineSpatialPlanning.WithinputsfromScottishPowerRenewablesandVattenfall.DataCollectedMethodsTypesofdataMSPusesMetoceanMeteorologicalmasts/LIDARWindspeedanddirectionHigh;coastalriskassessmentsAcousticWaveandCurrentMetresWaveandcurrentdataDirectionalWaveriderBuoysWaveheightanddirectionAcousticDopplerCurrentProfilersTidalspeedanddirectionGeophysicalBathymetrySeabedbathymetryandtexture;morphologicalfeatures;shallowgeology;seabedhabitats;archaeology;potentialunexplodedordnanceHigh;suitablegroundconditionsSide-scansonarMagnetometerSeismicGeotechnicalBoreholesSitegeology;archaeologyLow:notneededConePenetrationTestsSeabedCommunitiesGrabsamplesordrop-downvideoorcameraInfaunalandepifaunalspeciescomposition;fishspeciescompositionTrawlsamplesMarineMammalsAerialsurveysand/oracousticmonitoringMarinemammalspeciesdensitiesHigh;biodiversitytargets;generatingsensitivitymapsBoat-basedsurveysBirdsAerialsurveysBirdspeciesdensitiesShippingandFishingAISInformationShippingandfishingtypesanddensitiesSite-specificradarsurveysLivemonitoringduringconstructionPartThree:SustainabilityoftheIndustryGWEC.NETcertainplatformsandpartnerships.15UndertheauspicesoftheUNGlobalCompactOceanStewardshipCoalition,industrypartnersandplannersarecomingtogether,todiscusshowtoacceleratedata-sharingacrossregionsandfurtherunderstandtheapplicabilityandusesofoffshorewinddatainMSP.Thiswillhelptosupportmoreresilientoceananddata-drivenplanningwhichcanrespondtochangesinourclimate.UndertheUNGlobalCompactSustainableOceanPrinciples,responsibleocean-goingcompaniesareencouragedtosharerelevantdatawithacademiaandauthoritiestostrengthenoceanscienceandscience-baseddecisionmaking.WhileaholisticMSPprocesshasbeencriticisedbysomefordelayingtherapidscale-upofoffshorewind,thisdoesnotnecessarilyhavetobethecase.Inadditiontoavoidinglitigationorconflictfurtherdowntheline,dependingonthelocalconditionsandspecificneeds,acombinationofplanningmechanismscouldevenbeused.Forexample,havingasectoralrenewableenergyplannestedwithinMSPcanensuremoredetailedsitingandelaborationofsector-specificpolicies(e.g.,mitigationmeasures,co-locationandmulti-useguidelines)andthusenablerobustsector-basedplanningwhilestillaccommodatingplansformultipleobjectives.16Takenagainstthebackdropofourincreasinglybusyoceans,whichinfact,needtogetbusiertomeettheSDGsandclimatetargets,nowmorethanever,weneedastrategic,sustainableandinclusivevisionofouroceans.Wecannotoperateinsiloesandsolveonechallenge,withoutconsideringhowitispartofandconnectedtoourwiderplanetaryandsocialcrises.Fortheoffshorewindindustry,theUNGlobalCompactSustainableOceanPrinciplesofferaholisticframeworktoincorporateoceansustainabilityintobusinessoperationsandtoconsiderindividualcompanieswithinawidercontext.Andwhilecertainlynotperfect,MSPoffersaframeworktobalanceobjectives,andespeciallywhenusingaclimate-smartapproach,offerswin-winsfornature,peopleandtheclimate.Withinputfrom:MarthaSelwyn,UNGlobalCompact15.Forexamples,seeOceanDataPlatform(https://www.oceandata.earth/)andOrstedandNOAAdata-sharingMoU(https://www.noaa.gov/media-release/noaa-signs-data-share-agreement-with-offshore-wind-energy-company).16.GovernmentofIrelandPartThree:SustainabilityoftheIndustry38GWECGLOBALOFFSHOREWINDREPORT2022PARTFOUR:TECHNOLOGY39GWEC.NET40Technologyinnovationhasbeenaprimarydriverinthedramaticcostreductionsofrenewables,allowingwindpower,especiallyoffshorewind,tomovefromthemarginsoftheenergysectortothemainstream.RotorsizeandpowerratingcontinuetoincreaseSincetheworld’sfirstoffshorewindturbine,theBonusB35-450kW,wasinstalledattheVindebysiteinDenmarkin1991,thepowerratingofoffshorewindturbinehasgrownsignificantly.Theglobalaverageoffshorewindturbinesizehaspassedthemilestoneof1.5MWin2000,2.5MWin2005and6.0MWin2020.ExcludingChinaandVietnamwheremoreofthesmalleroffshoreturbinemodelshavebeeninstalled,theaverageturbineratingfornewinstallationsreached8.1MWin2021andexpectedtopassthe12MWmarkin2025.DriversofoffshorewindturbinetechnologyinnovationTheincreaseofthepowerratingandrotordiameterforoffshorewindturbineshasbeendrivenmainlybythefollowingfactors:lPressuretoreducethelevelisedcostofenergy(LCOE)tomakeoffshorewindacompetitiveenergysource.ToreduceLCOE,sizematters.Abiggerturbinehasahigherpowerrating,longerblade,andahighertower,increasedtechnicalcapacityincreasestheannualenergyproduction(AEP).Forexample,SiemensGamesa’snewestoffshoremodel,theSG14-236DD,canincreaseAEPbymorethan30%comparedtoitspredecessor,theSG11-200DD.AccordingtoBloombergNEF,theglobaloffshoreaverageLCOEhasdroppedbymorethan65%inthepasttenyears,akeycontributortothishasbeenthescalethatthedeploymentofthenewsupersizedoffshorewindturbinescanachieve.Nextgenerationofoffshorewindturbinetechnology200199120003.656.281011-1315-1720.46200320082012201720212024/2025e2022/2023e604010080140120160200180240Rotordiameter(m)Powerrating(MW)220RotorsizeandpowerratingcontinuetoincreaseBasedoncommercialoffshorewindturbineinstallationSource:GWECMarketIntelligence,June2022PartFour:TechnologyGWECGLOBALOFFSHOREWINDREPORT2022lCAPEXsavingforfoundations,inter-arraycablesandinstallation.Althoughalargerturbineperunitismorecostlythanasmallerone,recentresearchfromRystadEnergyestimatedthatinstallingthe14MWturbineforanew1GWoffshorewindfarmwouldcreatecostsavingsofnearly$100millioncomparedtothecurrentlyavailable10MWmachine.lOPEXsavingduetofewerturbineunits.O&Mcostsaccountforapproximately25-30%oftotalprojectlife-cyclecosts.Fewerunitsmeansfewercomponents,aswellastheneedforfewervesselsandfewertechnicians.lAchievingthelarge-scaleintegrationofoffshorewindthroughscale,reducedtransmissionexpenditure,lowerbalancingcostsandimprovedoutputcertainty.DirectdriveandmediumspeeddrivetraincontinuetogainpopularityFourdifferentdrivetraintechnologieshavebeenusedintheoffshorewindindustryinthelastthreedecades.Asoftoday,however,thedirectdriveturbinewithapermanentmagnetsynchronousgenerator(DDPMSG)andthemediumspeedturbinewithPartFour:Technology41GWEC.NET42PartFour:TechnologyWithover30yearsofexperiencewiththeworld’smajorwindturbineOEMs,Bonfigliolicreates,designsandproducesadvancedsolutionstodelivertailor-madeYawandPitchdrivesbothforonshoreandoffshorewindapplications.ThisincludesanimportantdesignoftheYaw&PitchElectricMotorforoffshorewind,drawingonpermanentmagnet(PM)motortechnology.Today,PMmotortechnology(bothinteriorpermanentmagnet,orIPM,andsurfacepermanentmagnet,orSPM)representsakeyfactorforthecurrentandnextgenerationofwindturbines.TheclearadvantagesbroughtbyPMtomanufacturersandtopowerproducersinclude:easeofinstallation,energyefficiency,improvedenergyharvestingandlowermaintenance.Morespecifically,theobviousadvantagecomesfromthetorquedensityofelectricmotors,thusreducingproblemsofspaceandinstallationconstraints.Suchmotorshaveverylowrotorinertia,whichcombinedwithaveryhighstartingtorque,enableanextremelyfastandcontinuousmicro-adjustmentofbladepitchingandnacelleyawing.Thisfeature,alongwiththemulti-turnencoderorresolverthemotorisequippedwith,allowsforhighpositioningprecisionwhichcanoptimisewindenergyharvesting.Bynature,PMmotorshavehigherefficiencyifcomparedtotraditionalACinductionorDCmotors.Theyfurtheravoidenergywasteduringthebrakinganddecelerationphasesofpitchandespeciallyyawdrive.Infact,suchregenerativeenergycanberecoveredinenergy-storingdevices(i.e.batteriesorsupercaps)andthenreutilisedtosupporthighenergydemand,auxiliarydevicesoremergencycases.Thankstofourquadrantcontrolmodesandthecapabilityofbeingcontrolledwithfulltorqueatzerospeed,normaldynamicbrakingisexclusivelyelectric(thenpotentiallyregenerated).ThisrelegatesthemechanicalbraketothefunctionofStaticHoldingBrakeorEmergencyBrake,andpotentiallyremovesthehasslesrelatedtomechanicalbrakemaintenance.Finally,Bonfiglioli’sPMtechnology,bothinSPMandIPMconfigurations,coversallpossiblewindturbinemodelscurrentlyoperatinginthemarket.Findoutmorehere:https://www.bonfiglioli.com/international/enCaseStudy:AdvantagesofanoffshoreyawandpitchmotorwithpermanentmagnettechnologyProvidedby:BonfiglioliGWECGLOBALOFFSHOREWINDREPORT2022apermanentmagnetsynchronousgenerator(MSPMSG)arethetwoprimarydrivetraintechnologiesinEurope,eachwithalmostequalmarketsharein2021.InChina,inadditiontothesetwotechnologies,theconventionalhighspeedwindturbineswithDouble-FedInductionGenerator(DFIG),SquirrelCageInductionGenerator(SCIG)andHighSpeedPMSG(HSPMSG)arestillcommerciallyavailablewiththeconventionalSCIGsolutionhavingthehighestmarketshareinChinauntil2021.TheDDPMSGtechnologystartedgainingmarketshareintheChineseoffshoremarketfrom2017andbecamethemostpopulartechnologyin2021asmorelargeDDPMSGturbineswereinstalledbylocalsupplierssuchasGoldwind,ShanghaiElectric,DongfangandHarbinElectric(XEMC).Nevertheless,theseverecompetitionbasedonperMWcostaswellasincreasingcommoditypricesforkeymaterialsincludingrareearthelements(REEs)haveputalotofpressureondirectdriveproducersin2021.Inordertostayontopofthecompetition,Chinesedirectdriveturbineproducers,includingGoldwind,theworld’slargestDDPMSGproducer,haverecentlyswitchedtoMSPMSGturbinetechnologyfortheirnextgenerationofoffshoreturbines.AmongtheChineseturbineOEMs,MingyangisthefirstsuppliertointroducetheMSPMSGoffshoreturbinetothelocalmarket.Thecompanyisalsotheworld’slargestMSPMSGoffshoreturbinesupplier,asof2021.AccordingtotheChineseoffshorewindturbinetechnologyroadmapforthenextfiveyears(seepage45),GWECMarketIntelligencepredictsthatthemediumspeeddrivetrainsolutionislikelytoovertaketheDDPMSGsolutionasthemostpopulartechnologyinChinabefore2025.ContinuousinnovationConsideringtheincreasingpressureforoffshorewindtoreachgridparity,GWECMarketIntelligencebelievesthatthesizeofoffshorewindturbineswillcontinuetogrow.AcostreductionsurveyconductedbyNRELandBerkeleyLABin2021PartFour:Technology020406080100ConventionalHSPMSGConventionalDFIGConventionalSCIGMediumSpeedPMSGDirectDrivePMSG2021China2021Europe2016China2016EuropeTrendofoffshorewindturbinedrivetraintechnologySource:GWECMarketIntelligence,June202243GWEC.NET44PartFour:Technology019911992199319941995199619971998199920002001200220032004200520062007200820092010201120122013201420152016201720182019202020211234567MW89101112131415TraditionalFastSpeedDirectDriveMediumSpeedFloatingTurbineSolidline:theinstallationhasbeencompletedDashedline:newproductwasreleasedbuttheprototypeisnotinstalledyetOffshoreWindTurbineTechnologyRoadMap(excludingChina)Source:GWECMarketIntelligence,June202245GWECGLOBALOFFSHOREWINDREPORT2022PartFour:TechnologyOffshoreWindTurbineTechnologyRoadMap(Chinaonly)02007200820092010201120122013TraditionalFastSpeedDirectDriveMediumSpeedFloatingTurbineSolidline:theinstallationhasbeencompletedDashedline:newproductwasreleasedbuttheprototypeisnotinstalledyet20142015201620172018201920202021202212345678910111213141516MWSource:GWECMarketIntelligence,June2022GWEC.NETPartFour:Technologyshowsthata17MWoffshoreturbinewitharotorsizeof250mispredictedforinstalmentin2035.GWEC’soffshorewindambassadorandpioneerinoffshorewind,HenrikStiesdalhasalsopredictedthatthenextgenerationoffshoreturbinetechnologycouldreach20MWwitha275mrotordiameterby2030.However,itmustbenotedthatthepossibilitiesandlimitsforfutureoffshoreturbinedesignwillbedeterminedbyfactorssuchastheexistingsupplychainandinfrastructure,drivetrainoptimisation,foundationdesign,materialsconstraints,thelogisticalconstraintsforbothtransportationandinstallationaswellaspermitting.Tofurtherunlockthepotentialofoffshorewind,technologyinnovationwillremainkeyandadvancesinthisareaareexpectedtocontinue.Consideringtheincreasingpressureforoffshorewindtoreachgridparity,GWECMarketIntelligencebelievesthatthesizeofoffshorewindturbineswillcontinuetogrow.PartFour:Technology4647GWECGLOBALOFFSHOREWINDREPORT2022Offshorewindturbinesareexposedtoharshenvironmentalconditionssuchashighhumidityandcorrosivesaltthroughouttheirlifetime.Althoughtherearenostatisticsavailablefortheoffshorewindindustry,theeconomiclossesduetocorrosioninindustrialisedcountriescanrepresentupto6%ofthegrossnationalproduct1.Therefore,acompletecorrosionprotectionoftheturbines’metallicsurfacesmustfunctionoptimallyovertheirplannedoperationallifeof25yearsormoretokeeptheLevelisedCostofEnergy(LCOE)fromoffshorewindundercontrol.Manycorrosionprotectionmethodshavebeenadoptedfortheoffshorewindindustry.Fortheexternalsurfacesofthefoundationsunderandnearseawater,thecorrosionprotectionisprescribedincurrentindustryguidelinesbasedonexperiencesfromtheoilandgasindustry.Cathodicprotection(CP)ofoffshorestructureswithgalvanicanodesisawell-establishedcorrosionpreventiontechnique2.Insidethenacelleandtower,theactivedesalteranddehumidifiercreatearelativelyconstantoverpressurewithdryairtoblockthesaltcorrosionprocessonthemetallicsurfaces.Additionally,thesurfacecoatingiswidelyappliedforthemetallicsubsystemsandcomponents,suchasgenerators,converters,motorsandcabinets.Connectorshavebecomeanindispensableelementofthemodernwindindustry.Theyspeeduptheassemblyanddisassemblyofindividualcomponents,encouragemodulardesigns,andthussignificantlyreducecostsovertheentireservicelife.ThemetallicconnectorhoodsandhousingsfromHARTINGandmanyothersuppliersaregenerallymadeofaluminiumusingadie-castingprocesstoensureaverydemandingelectromagneticcasting(EMC)functionalityandtoproviderobustmechanicalstrength.However,preciseguidelinesforcorrosionprotectionofconnectorsinthewindturbinearenotprovidedincurrentindustrystandards.HARTINGrecentlyissuedawhitepaperthattakesacloserlookattheuseofconnectorsandtheissueofcorrosion.Possibletypesofcorrosionandtheresultingproblemsandrequirementsforconnectorsarealsoconsidered.Finally,differentstrategiesarediscussedforminimisingtherisksofcorrosionandensuringcorrosionprotectionthatlastsfortheentireservicelifeoftheconnector.Findoutmore:https://www.harting.com/UK/en-gb/markets/wind-energyCasestudy:Howdoyouavoidconnectorcorrosioninoffshorewindturbines?Providedby:HARTING1.Corrosion:achallengeformaterialsscience,Crespy,Daniel;Landfester,Katharina,YearlyBookofMax-Planck-Gesellschaft2014/2015.2.CorrosionRisksandMitigationStrategiesforOffshoreWindTurbineFoundations,KathyRiggsLarsen,MaterialsPerformance,05.04.2021PartFour:TechnologyGWEC.NETGeneratingelectricityfromrenewablesandreducingenergydemandaretwokeyplanksofthetransitiontonetzero.Inthehard-to-abatesectorswheredirectelectrificationischallenging,additionaltechnologieswillberequiredtoachievedecarbonisation.Asoffshorewindpowergenerationincreases,aproportionoftheenergygeneratedmaynotreachthepowergridduetocostortechnicalconstraints.Locatingelectrolysersnearoffshorewindfarmswouldenabletheproductionofgreenhydrogen–anattractivepropositionespeciallyforfar-from-shoreprojectsindeepwaters.Asaclean-burninggasthatemitsonlywateratthepointofcombustion,greenhydrogencanbecomeanimportantpieceinthejigsawpuzzleofanetzeroenergysystem.Today’sprevalent“greyhydrogen”isproducedfromfossilfuelssuchasmethaneandcoal,emittinglargeamountsofCO2.“Bluehydrogen”reliesonthesameproductionprocessbutpairsitwithcarboncaptureandstorage(CCS)technologies,addingsignificantcostandadegreeofinefficiencyregardingcapturerates.Greenhydrogenisproducedviaelectrolysis,fedbyrenewableenergysourcedfromanadjacentassetorthegrid.Wind-to-greenhydrogencanbecompressedandstoredinatanksystemforoffloadingwhenneeded.Throughanoffshorehydrogenationplatform,liquidhydrogen(LH2)canbeconvertedtosyntheticnaturalgas(SNG),betterknownasmethane,beforebeingshippedtoend-usersformultiplepurposes.ApplicationsofPower-to-XOffshorewindenergycanalsopowerelectrolyserslocatedonoilandgasplatformstoproducegreenhydrogenusingseawater.Thegreenhydrogenisblendedintothegasandtransportedtolandviatheexistinginfrastructure.Itisestimatedthatupto20%ofhydrogenbyvolumecanbemixedintoexistinggaspipelineflows.1StoredelectricitycanalsobecombinedwithcapturedCO2tomakecarbon-neutralliquidfuelsortogenerateheatthroughheatpumpsorelectricboilers(Power-to-Heat),orcontainedinundergroundformationssuchassaltdomesandfedbacktothegridwhenneeded(Power-to-Power).Eachsectorwillrequiretargetedapproaches,especiallygiventhevaryingcostsandconversionefficiencyratesattachedtoeachapplication.Power-to-Xisparticularlycapableofprovidingsolutions,feedstockandgreenfuelsforhard-to-electrifysectorssuchasheavyroadtransport,shippingandaviation,aswellassteelandcementproductionandchemicalsmanufacturing.Whiledifferenttypesofhydrogencanbolsterenergysecuritybyreducingimportdependence,mitigatingexposuretofossilfuelpricesandboostingsystemflexibility,greenhydrogenisnaturallybestsuitedtosupportthejourneytonetzero.Severalcountrieshaveambitioushydrogenroadmapsinplace,withIRENAidentifyingChina,theEU,India,Japan,KoreaandtheUSasearlyadopters.Forinstance,withannualconsumptionofmorethan24milliontonnes,Chinaistheworld’slargestuserandproducerofhydrogen.AlthoughChina’sGreenhydrogenandPower-to-X1.GWEC,GlobalOffshoreWindReport2021.PartFour:Technology48GWECGLOBALOFFSHOREWINDREPORT2022hydrogenproductionispredominantlycoal-based,Chinahasmorethan30greenhydrogenprojectsintheworks.ThecurrentFive-YearPlan(2021-2025)listshydrogenasoneofChina’ssixindustriesofthefuture,andanumberofprovincesandcitieshavelaunchedhydrogenstrategies.IndialauncheditsNationalHydrogenMissioninAugust2021,withtheambitionofbecoming“aglobalhubforgreenhydrogenproductionandexport”.Thegovernmentisconsideringmakingitmandatoryforrefineriesandfertiliserplantstousesomegreenhydrogen.Indiaisalsotheworld’slargestammoniaimporter,akeyinputforfertiliserproduction.AssessingthecompetitivenessofgreenhydrogenSomeexpertsarguethatgeneratinggreenhydrogenfromsurplusrenewableenergydoesnotmakesenseinahighlyconnected,continent-scaleenergysystem.Whileoffshorewindishighlycompatiblewithgreenhydrogenproduction,itmaybeunabletocompeteoncostwithproductionbasedonacombinationofcheapersolarandonshorewind–especiallyinthegeographieswherethesetwoenergysourcesarewidelyavailable.Atanestimatedcostofaround$1/kgby2050,greenhydrogenisonthepathtobecomingcost-competitivewithgreyorbluehydrogen.2Thisisespeciallythecaseinlightofshiftingpricedynamicsaroundhigh-costgasgeneration.BloombergNEFhasfoundthat,intheaftermathofRussia’sinvasionofUkraine,thecostdifferentialbetweengreyandgreenhydrogenhasalreadyreachedthetippingpoint.Thelevelisedcostofgreyhydrogenfromfossilgasstandsat$6.71/kgintheEMEAregion,whilegreenhydrogenproducedusingEuropeanelectrolyserscosts$4.84-6.68/kg.InChina,greenhydrogenispricedat$3.22/kg,against$5.28/kgforgreyhydrogen.IRENAhascalculatedthat,drivenbyR&Dandeconomiesofscaleinmanufacturingfacilities,electrolyserscouldbecome40%cheaperby2030,makinggreenhydrogencost-competitivewithbluehydrogenbythesamedate.By2050,theIEA’sNetZero2050roadmapsuggeststhathydrogenproductionwillbealmostentirelybasedonlow-carbontechnologies,withgreenhydrogenaccountingfortwothirdsofglobalproduction.Butwhethergreenhydrogencanultimatelyplaythewide-rangingrolethatitsproponentsenvisageisstilluncertain,especiallyasrenewableelectrificationandstoragetechnologiescontinuetoadvance.Asrenewableelectricityandelectrolysercostsfallandavailabilityrises,greenhydrogencouldeasilyreplacegreyhydrogeninrefineriesandforproducingammoniaandmethanol.Itcouldalsobeusedtoproducechemicalsandmanufacturesteel,withpilotprojectsalreadyhappeninginGermany’sSaxony-Anhalt“chemicaltriangle”regionandinAustralia,wheresteelmakerBlueScopeaimstoworkwiththeCommonwealthScientificandIndustrialResearchOrganisation(CSIRO)toreplacecoalwithcokeovengas,whichcontains60%hydrogen,subsequentlyaddinggreenhydrogen.Thecaseforpoweringheatpumpsappearsweaker,consideringhowexpensivecarbonwouldhavetobeinordertomakegreenhydrogencompetitivewithnaturalgasorgreenelectricity.Inthetransportsector,theuseofhydrogeninpassengerroadvehiclesisunlikely,givencost-competitivenessandconvenience2.https://about.bnef.com/blog/hydrogen-economy-offers-promising-path-to-decarbonization/PartFour:Technology49GWEC.NETconsiderations,buttheprospectsarerosierforlong-distanceshippingandaviation,whereelectrificationisunlikelytoprovidealltheanswers.Atthepowersystemlevel,ithasbeenarguedthatgreenhydrogen,storedatstrategiclocationsandmovedaroundasneeded,couldprovideresiliencewhenupto90%ofgenerationcomesfromvariablerenewableenergysources.AccordingtotheIEA,globalelectrolysercapacitystoodat0.3GWin2020,mostlyusinggridelectricitytoproducehydrogen.Theagencyestimateselectrolysercapacitytoreachalmost17GWby2026,basedonanannouncedpipelineof260GWglobally.Almosthalfoftheplannedexpansionisexpectedtouseexistingrenewablecapacity,withmostannouncedprojectsrangingfrom1MWto10MWinsizeandbeinglocatedclosetoindustrialsitesandports.Largerprojectsof10-100MWareexpectedtorelyonsome18GWofadditionalrenewablecapacityduring2021-26,mostofwhichcouldcomefromChina,Chile,SpainandAustralia.Supplychainpressuresintherenewablessector(seePartOne:SupplyChain),however,coulddisruptatrendoffallingcostsandslowdowngrowthofgreenhydrogen.Lowelectricitypricesareessentialforproducingcompetitivegreenhydrogen.ScalinggreenhydrogenonthegloballevelCountrieswiththepotentialtogeneratelargeamountsoflow-costrenewableenergyareprimecandidatesforbecomingproducersofgreenhydrogen,especiallyiftheyalsohaveaccesstowaterandthecapabilitytoexporttolargedemandcentres.Severalcountrieswithwidelydifferinglocationsandconditionscouldbecomeleadersinthegreenhydrogenproductionrace.Scotland,forexample,withitsvastoffshorewindresourcesandexistingoilandgasinfrastructure,iswellplacedtoplayamajorrole.Ontheothersideoftheglobe,Australiahasimmensepotentialforcheapwindandsolargeneration.Withamorefavourablepoliticaloutlookfornetzeropoliciesthanithasenjoyedfordecades,itcouldgainaprimeposition.SeveralcountriesinAfricaandtheMiddleEast,suchasEgyptandtheUAE,areexploringopportunitiestobecomehydrogenexporters.Whateverthepaceofgreenhydrogenexpansion,offshorewindwillbeamajorsourceofpowerforit.Forinstance,followingtheNorthSeaSummitinMay,DanishdeveloperCopenhagenInfrastructurePartners(CIP)sharedplanstobuildanartificial“hydrogenisland”intheDanishNorthSea.Electricityfrom10GWofoffshorewindcapacitywouldpowerelectrolyserstoproducenearly1milliontonnesofgreenhydrogenannuallyforexporttoneighbouringnorthernEuropeancountriesvia275kilometresofpipelines.Itisnosurprisethatintenseinternationalcollaborationisongoingtobothadvancetechnologicaldevelopmentsandsupporthydrogenproductionincountrieswithsignificantrenewableenergygenerationopportunities.Morethan30countriesalreadyhavehydrogenstrategiesthatincludeimportorexportplans,accordingtoIRENA,andcross-borderhydrogentradelookssettogrowconsiderablyinthecomingyears.Butwhetherthetechnicalpotentialtoproducehydrogenatexportscalecanberealisedwillalsodependonfactorslikegovernmentsupport,theinvestmentclimateandpoliticalstability.PartFour:Technology50GWECGLOBALOFFSHOREWINDREPORT2022Floatingoffshorewindhasthepotentialtoexpandrapidlytodelivertherenewableenergycapacitytheworldneeds,and2021witnessedfurtherbreakthroughsinthesector.In2021theUK’sKincardinefloatingoffshorewindfarmcameonline,takingglobalfloatingoffshorewindcapacityto139MW,whileEquinorhasnowcommencedconstructionofitsHywindTampenfloatingproject.Developmentactivityhascontinuedtoaccelerateinanumberofdifferentmarkets,withleasingactivityinFrance,theUKandCalifornia,andearly-stagedevelopmentactivityinawidevarietyofcountries,includingSouthKorea,Ireland,Japan,Norway,ColombiaandItaly.AnimportantfeatureoffloatingoffshorewindisthesignificantpresenceofseverallargeEuropeanoilandgascompanies.Thesecompanieshaveunparalleledoffshoreengineeringskillsandfinancialstrengths.Theirdeep-waterexperience,combinedwithknowledgefromfixedoffshorewinddevelopers,willtakefloatingwindfromthecurrentdemonstrationstageintofullcommercialisationbythemiddleofthisdecade.MarketstatusandactivitiesInthepastdecade,MW-scalefloatingtechnologieshavebeentestedthroughdemonstrationandpilotprojectsinbothEuropeandAsia.TherearenowfloatingoffshorewindfarmsoperatingsuccessfullyintheUKandPortugal,aswellasasignificantpipelineofprojectsindifferentmarketsacrosstheglobe.ThesuccessoftheUK’sScotWindleasinground,where15GWoutof25GWofsitesawardedleasingcontractsareforfloatingprojects,highlightsthesector’sappetitetomoverapidlytothedeliveryoflargeGW-scaleprojects.However,overtheremainderofthisdecade,thesectorwillneedtoshiftfromapre-commercialtofullycommercialmodel,andtodothissuccessfullyitwillneedtograpplewithanumberofsupplychainandinstallationchallenges.Overthenextfiveyearsweexpecttoseethedeliveryofanumberofprojectsbetween100and500MW,andthislearningappliedtode-riskdeliveryofthefirstmulti-GWfloatingprojectsbytheendofthedecadeinbothEuropeandEastAsia.GWEC’sforecastisfortotalinstallationstoreach18.9GWby2030(seegraphonpage97).Rapidgrowthwillcomelateinthedecadehowever,with73%ofthiscapacitycomingin2028,2029and2030.Bytheendofthedecade,weexpectSouthKorea,theUK,theUS,SpainandIrelandtobethetopfiveglobalfloatingmarkets.ItisexpectedthatEuropewillretainitsdominantpositioninleadingfloatingoffshorewinddevelopmentwith59%globalmarketshare,closelyfollowedbyAsia(29%)andthenNorthAmerica(12%).Floatingwind’scurrentcontributiontototaloffshorewindinstallationsisonly0.2%,butitwillplayanincreasinglyimportantroletowardtheendofthisdecade,accountingfor6.0%oftotalinstalledoffshorewindcapacityin2030.Lookingahead,post-2030,itisexpectedthatthisproportionwillcontinuetorisefortworeasons.First,asmatureandmaturingmarketsliketheUKandUSstarttoexperienceconstraintsFloatingoffshorewind—aglobalopportunityPartFour:Technology51GWEC.NET52onfixedoffshorewindgrowth,floatingoffshorewindoffersaroutetodevelopmentofnewareas.Second,ascostscontinuetofall,newmarketswherefixedoffshorewindwasnotanoptionwillrapidlyopenup.Thismeansthatwhilefloatingoffshorewindgrowthacrossthecurrentdecadeisimpressive,theseearlycommercialschemesareessentiallypathfinders,withindustryusingthisexperiencetobringdowncosts,rampupsupplychaincapacityandcapabilityandshiftfrombespoketomassproductionofcriticalcomponentslikeplatforms,anchors,mooringsystemsanddynamiccables.Atthestartof2022,GWECpublishedareporttitled,FloatingOffshoreWind–aGlobalOpportunity.Thisreportlookedatwherewemightseethenextgenerationoffloatingoffshorewindgrowth,asothercountriesseektoemulatepioneerfloatingmarketsliketheUK,France,SouthKoreaandJapan.Weidentified30marketswiththerightconditionsandprofiledfivegeographiesindifferentglobalregionstolookatwhatconditionsneededtobeinplaceandwhatconstraintshadtobeovercome.DriversandconstraintsconsideredforthenextfloatingwindmarketsOurreporthighlightedopportunitiesinCalifornia,Ireland,Italy,MoroccoandthePhilippines.Forthesegeographiestobecomehubsoffloatingoffshorewindactivitydependsononecriticalfactor:policyambition.Governmentsneedtoactasthecatalystforkickstartingsuccessfulfloatingoffshorewinddeployment,whichcanbringeconomicadvantageandrapidactioninemissionsreduction.Policyandregulatoryactionareneededtosupportportinfrastructure,supplychain,gridaccessandaroutetomarket/revenue.Whilewehaveidentifiedfivegeographiesthatcouldbecomea“chasingpack”behindmorematuremarkets,thereisamuchlargergroupofcountrieswheretheconditionsarerightforsuccessfulfloatingoffshorewindgrowth.What’smore,asunderstandingofthistechnologyincreasesthroughcommercialdeployment,costswillfallandmakefloatingoffshorewindaclearoptionformanymorecountriesaroundtheglobe.Longtimeframesbetweeninceptionandenergisationmeanthattoseefloatingoffshorewindgrowthfromnowintothe2030s,weneedmarketframeworksoverthenextfewyears.OurexperienceofsupportingmarketgrowthincountrieslikeJapan,Vietnam,Brazil,ColombiaandthePhilippinesshowsthatthereisgrowingappetiteacrosstheglobe,aswellasanunderstandingofthereadinessoffloatingoffshorewindtosupportnationalgoalstodecarboniseandmeetgrowingelectricitydemand.SiteconditionsWindspeedsandbathymetryarekeyfactorstodeterminethetechnicalpotentialofamarketandgaugetheattractivenessofsites.PolicyenvironmentGovernmenttargetsanddependabilityoftheregulatoryframeworkforrenewableenergyinfluencemarketmaturityandattractiveness.SupportregimeAvailablesubsidiesandprecedencefrompreviousrenewableprojectsaffecteaseoffinancingforoffshorewindprojects.PermittingregimeGovernance,requirementsandclarityofpermittingprocessdetermineprojectdevelopmentlead-timeandcost.Supplychainandinfrastructure.(ports)Currentportcapacities,domesticindustrialcapabilitiesandpotentialsynergiesfromexistingindustriesinfluencecostofinstallation.TransmissiongridSubstationsclosetoconnectionpoint,currenttransmissiongridcapabilities,aswellasplannedbuildoutaffecttheofftakesituationDriversandconstraintsconsideredforthenextfloatingwindmarketsPartFour:TechnologyMARKETSTATUS202153GWEC.NET54Annualinstallations2021saw21.1GWoffshorewindbecomegridconnectedworldwide,settinganewrecordintheoffshorewindindustry.lChinaledtheworldinannualoffshorewindinstallationsforthefourthyearinarowwithnearly17GWofnewcapacityconnectedin2021.ThisastoundinglevelofgrowthwasdrivenbytheexpiryofFeed-in-Tariffs(FiTs)foroffshorewindattheendof2021-thesamepolicyshiftsthatcreatedahugerushinonshorewindinstallationsin2020.lWith3.3GWofoffshorewindcapacityaddedin2021,Europeaccountedforthemajorityoftheremainingnewinstalledcapacity.lWithprojectsawardedintheContractsforDifference(CfD)Round2in2017comingonline,theUKinstalled2.3GWofnewoffshorewindlastyear,makingitthelargestEuropeanoffshorewindmarketin2021,followedbyDenmark(608MW)andtheNetherlands(392MW).lNooffshorewindturbineswereinstalledinGermanyduring2021,althoughtherewasonesmall69015927EuropeChinaRestofworld90200620820074592008Ofsshareofnewinstallations1%3%23%5-10%622200910312010168420141002201113062012167420133382201522232016447220174296201862432019685220202110620218161172161114553018156431962661362729363317169009411313392436135926711611151600352493123384572889229CAGR+36%Newoffshoreinstallations2006-2021(MW)CompoundAnnualGrowthRate.Source:GWECMarketIntelligence,June2022MarketStatus202155GWECGLOBALOFFSHOREWINDREPORT2022offshorewindprojectunderconstruction.Theslow-downwasprimarilycausedbypreviouslyunfavourablemarketconditionsandalowlevelofready-to-buildoffshorewindprojectsinthepipeline.lIn2021Norwaycommissionedthe3.6MWTetraSparfloatingfoundationdemonstrationprojectattheMetcenterTestsite.Togetherwiththefiveunitsof9.5MWfloatingwindturbinesconnectedattheKincardinefloatingwindfarminScotlandandtheone5.5MWfloatingprototypeunitinstalledattheYangxiShapaIIIoffshorewindfarminChina,atotalof57MWoffloatingwindcapacitywascommissionedin2021.lOutsideofChinaandEurope,twoothercountriesrecordednewoffshorewindinstallationsin2021:Vietnam(779MW,intertidalonly)andTaiwan(109MW).lDrivenbythe1stofNovemberFiTdeadline,20intertidalprojectsinVietnamfullyorpartiallyreachedtheircommercialoperationdates(COD)lastyearaccordingtoEVN(VietnamElectricity),makingitthethirdlargestmarketinnewinstallationsin2021.lTaiwanwasduetocommissionmorethan1GWofoffshorewindcapacityfromthreeprojectslastyearbasedontheprojectCODplans,butonlythe109MWChanghuademonstrationprojectcameonline.ThedelaysareprimarilycausedbyCOVID-19relateddisruptions.lTheUnitedStatesistheonlymarketwithanoffshorewindprojectinoperationintheAmericas,butnooffshoreprojectswerebuiltin2021.CumulativeinstallationsTheglobaloffshoremarketgrewonaverageby36%peryearinthepastdecade,bringingtotalinstallationsto56GW,whichaccountedfornearly7%oftotalglobalwindcapacityastheendof2021.lIntotalinstallations,thetopspothasbeenheldbytheUKsince2009,butasGWECpredicted,Chinatookovertheleadingpositionbytheendof2021.Theothermarketsintheglobaltop-fiveare:Germany,theNetherlandsandDenmark.lEuroperemainsthelargestoffshorewindregionalmarketasoftheendof2021.Theregionwasresponsiblefor50.4%oftotalcumulativeglobaloffshorewindinstallations,18%lowerthanthepreviousyear.ThesharpdropofitsmarketshareisprimarilyduetotheremarkablegrowthoftheoffshoresectorsinChinaandVietnamin2021.lAstheworld’ssecondlargestregionalmarket,AsiaistrailingbehindEuropebylessthan1%incumulativeinstallations.Chinaisthelargestmarketintheregion,followedbyVietnam,Taiwan,SouthKoreaandJapan.lOutsideEuropeandAsia,NorthAmericahas42MWoffshorewindinoperationasoftheendoflastyearfromtheBlockIslandwindfarmlocatedintheUS.l57.1MWoffloatingwindwasinstalledin2021,ofwhich48MWwasintheUK,5.5MWinChinaand3.6MWinNorway.lTwofloatersweredecommissionedlastyear.Oneunit,of5MW,inJapanandanother,of2MW,intheUK.lAsof2021,atotalof121.4MWofnetfloatingwindisinstalledglobally,ofwhich78MWislocatedintheUK,25MWinPortugal,5.9inNorway,5.5MWinChina,5MWinJapanand2MWinFrance.MarketStatus2021FloatingwindGWEC.NET56China80%Vietnam4%UnitedKingdom11%Denmark3%Netherlands2%Taiwan1%Norway0.5%21.1GWAPAC84%Europe16%21.1GWChina47%Germany14%UnitedKingdom22%Denmark4%Netherlands5%Others7%55.9GWEurope50%APAC49.5%NorthAmerica0.1%55.9GWNewoffshorewindinstallationsbymarketNewoffshorewindinstallationsbyregionTotaloffshorewindinstallationsbymarketTotaloffshorewindinstallationsbyregionMarketStatus2021Source:GWECMarketIntelligence,June2022GWECGLOBALOFFSHOREWINDREPORT2022MARKETSTOWATCH57GWEC.NETThelong-awaitedPowerDevelopmentPlanVIII(PDP8)-whichoutlinesthestrategiesforthenextdecadeofrenewableenergydevelopmentinVietnamfrom2021-2030withavisionto2045-isexpectedtobeapprovedwithin2022.Thisplan,whichwaschangedsubstantiallyafterCOP26,isasignificantpieceoflegislationthatenablesthecountrytomovetowardsagreeneconomywithbettergridstabilityandalargershareofrenewableenergygeneration.Theoffshorewindtargetwasincreasedfrom2GWinthefirstdraftto7GWby2030inthemostrecentdraftreleasedinApril.ThisdraftplanwasapprovedbyanappraisalcommitteeandiswaitingforafinaldecisionfromthePrimeMinisteratthetimeofwritingthisreport.TheambitioustargetwillnotonlycementVietnamasaregionaloffshorewindleader,butalsomarksVietnamasaglobalenergyleader.Inordertomeetthisambitioustarget,aclearandtransparentlegalframeworkneedstobeissuednolaterthantheendof2023.PDP8developmenttodateAtCOP26,Vietnammadeastrongcommitmenttobecomenetzeroby2050.ThisledtoasignificantincreaseinthewindtargetinPDP8targetto7GWofoffshorewindby2030and16GWofONS,meaningwindwillreach15.8%ofthetotalinstalledcapacityby2030.Atthesametime,PDP8stillincludesthecoalprojectswhichwereinPDP7buthavenotbeenbuilt.Theseprojectsarelikelytobefurtherdelayedduetothechallengeofobtainingfinanceforcoalprojectsworldwide.Oncetheseprojectsarelate,thereabigchancethatthegovernmentwilllookatrenewableenergy,includingoffshorewind,toreplacethem.Thehigherambitionofwindandrenewableenergyisin-linewiththePolitburo’sResolutionNo.55-NQ/TWtodiversify1theenergymixandtoensurethecountryisreadyforenergytransition.ItisclearthatrenewableenergyisthekeytoVietnam’senergytransition.However,theincreasingpenetrationofrenewableenergyintothesystemalsobringsaneedforgridupgrades.AregionaltargetwasproposedinthePDP8drafttolowerthecostneededforgridupgrades.Recently,thenationalassemblyhaspassedalawtoallowprivatesectortomakeinvestmentinthenationalgridsystem.AllthesefactorspavethewayforVietnamtomeetitsnetzerotargetby2050.OffshorewindroutetomarketPriortotheannouncementofDraftPDP8,theWorldBankGroup(WBG)andDanishEnergyAgency(DEA)cooperatedtodevelopanOffshoreWindDevelopmentRoadmapforVietnamwhichoutlineswaystotapintothecountry’shugeoffshorewindpotential.TheWBGestimatedthattheoffshorewindtechnicalpotentialforVietnamis599GW(261GWforfixedfoundationand338GWforfloatingfoundation)2andDEA’sestimationindicatedthatafteraconstraintsanalysis,Vietnamwillbeleftwithahighlyrealisabletechnicalpotentialof160GW.3The7GWtargetofoffshorewindby2030setinPDP8isveryambitiousforanewmarketlikeVietnam,yetitisachievableiftheregulatoryVietnam1.https://www.bakermckenzie.com/en/insight/publications/2020/02/vietnam-national-energy-development-strategy2.https://documents1.worldbank.org/curated/en/340451572465613444/pdf/Technical-Potential-for-Offshore-Wind-in-Vietnam-Map.pdf3.https://ens.dk/sites/ens.dk/files/Globalcooperation/d5_-_input_to_roadmap_for_offshore_wind_development_in_vietnam_full_report_english_final_2020-09-21.pdfMarketstoWatch5859GWECGLOBALOFFSHOREWINDREPORT2022frameworkisputinplaceswiftly.Tomeetthattarget,aroutetomarketprocesstoenabletheinstallationof7+GWoffshorewindby2030needstobeissuedquickly.Currently,Vietnamdoesnothaveanytrueoffshorewindinstalled.Giventhetypicaldevelopmentandconstructiontimelineof5-7yearsforprojectsafterallthepermittinghurdlesarecleared,gettingthefirstgenerationofoffshorewindconnectedby2030willrequireconsultationandestablishmentofpolicyandregulatoryframeworkstobegintoday.Keycomponentsinclude:lAsimpleremunerationmechanismwhichisquicktoimplement:Givenhowlongittakestodevelopandrunaneffectiveauctionforoffshorewind(typically3-4years),thefirst4-5GWofprojectsshouldbedevelopedthroughatransitionalmechanismmadeavailableinthenext1-3years;lAcleartimelinefortheimplementationofanauctionbymiddleofthedecadewhichcanprovideaclearsignalofprocurementschedulesforlong-terminvestment4andsufficienttimetocreatesuitableguidance,regulations,evaluationcriteriaandotherelementsofauctiondesign.lAclear,coordinatedandstreamlinedpermittingprocesstoensureprojectscanbeimplementedontimeandsecureseabedexclusivityfordevelopmentwork;thisalsorequiresacentralizedandwell-organizeddevelopment/permittingofficewithinthegovernmentwhichcanoverseethenecessarylicensesandapprovalsfromvariouspublicbodies,withafocusonimplementing,collectingandcoordinatingconsultationsandcomments;lAmarinespatialplanning(MSP)approachwhichallowsforalightmechanismtoensureprojectscangetunderwayinthenextfewyears,whileamorerobustframeworkisdevelopedtoensuresmoothmid-termoffshorewindplanningandmitigationofconflictbetweenoceanusers;lImprovedPPAbankabilitytoattractinternationalfinance,whichwillberequiredtobringinthelargeinvestmentvolumesrequiredforoffshorewind.Domesticbanksandinstitutionsmaynotbeabletoprovidesufficientcapitaltoanewsectorsuchasoffshorewind,particularlygivencurrentlendinglimits.lGridplanningandoperationalupgradestofacilitatetheintegrationofoffshorewind,withconsiderationoflocation(theproximitytopowerloadcentre,e.g.northandsouth),well-managedtimelinestoensuredeliverabilityon-scheduleandconcreteguidanceontherequirementsforsuccessfuldevelopers;theGovernmentmayalsowishtoconsidermechanismsonencouragingprivate-sectorinvestmentintransmissiontosolveupcomingtransmissionchallenges.Besidestheseissues,theVietnamesegovernmentalsoneedsotherpolicytodevelopastronglocalsupplychainandinfrastructuretosupplyfortheoffshorewindindustryinVietnam.RobustmarinespatialplanningImprovedPPAbankabilitytoattractinternationalfinanceGridplanningandoperationalupgradesforOFWintegrationOthersupportingpoliciessuchassupplychaindevelopmentplanetcSimplerenumerationmechanismwhichisquicktoimplementCleartimelineforimplementationofAuctionClearstreamlinedpermittingprocessCentralised&well-organiseddevelopment/permittingofficewithinthegovernmentpEnabling7+GWofOFWInstallationby2030VIETNAMROUTETOMARKETPROCESS4.GWECelaboratesonthebestpracticestotransitionfromaninitialprocurementschemetoacompetitiveauctionforoffshorewindinthisreportonoffshorewindinVietnamfrom2021:https://gwec.net/vietnams-future-transition-to-offshore-wind-auctions-international-best-practices-and-lessons-learned/.MarketstoWatchGWEC.NETTaiwanisthethird-largestoffshorewindmarketintheAsia-Pacificregion,aftermainlandChinaandVietnam.Withambitioustargetsandasignificantandclearpipelinelaidout,themarkethasattractedeagerinterestfromleadingoffshorewinddevelopersandtechnologyproviders.Asoftoday,twooffshorewindprojectsundertheDemonstrationIncentiveProgramhavecomeonline:Formosa1,totalling128MW,andChanghuaDemonstrationproject,totalling109MW.ThiswillbefollowedbyaseriesofprojectsincludingGreaterChanghua1&2a(900MW),FormosaII(376MW),Yunlin(640MW)andChangfangPhase1(100MW).GreaterChanghua1&2adeliveredfirstpowerinApril2022andisexpectedtobecompletedbytheendof2022.FormosaIIandYunlinarebothunderconstructionandshouldmakesignificantprogressin2022.IncreasedRound3offshorewindtargetshowinggreenambitionOffshorewindisakeycomponentofTaiwan’sgreeneconomyvision,whichincludesascenariotoTaiwanProgressionofTaiwan’swindprocurementmechanismsSource:MOEA,May2022MarketstoWatchRound1(DemonstrationPhase)Twodemonstrationprojects(128MWand109MW)Round2(2020-2025)Selectionprocessallocated3,836MWCOD2020-2025Auctionprocessallocated1,664MWCOD2020-2025BothselectionandauctionprocessRound3Phase1(2026-2031)1.5GW/yearTotalling9GWtobeconnectedfrom2026-2031Auctiontakingplacein2022,2023and2024witheachauctionallocated3GW(coveringtwoyears)PrioritytoprojectswithEIAandat<50mwaterdepthRound3Phase2(2032-2035)Totalling6GWtobegridconnectedregulationstobereleasedbasedontheresultsfromRound3Phase1+5GW+9GW+6GW128MWPhoto:Orsted6061GWECGLOBALOFFSHOREWINDREPORT2022generate20%ofelectricitythroughrenewableenergyby2025(whichthegovernmentisnowsayingwilllikelyhappenin2026or2027).InMay2021thegovernmentannouncedthatitwouldincreaseitsoffshorewindambitionsto15GWoverthe2026-2035period.Whiletheoriginal5.7GWtranchewasprocuredacrossaselectionroundandauction,thenext15GW(termedRound3)willlikelybeconductedacrosstwophases;thefirstphase(2026-2031)willprioritiseprojectsatwaterdepthoflessthan50metres.FollowinggovernmentdelaysduetoCOVID-19,adraftversionoftheRound3framework,includinghowmuchvolumewillbeallocatedandwhen,waspublishedbyTheMinistryofEconomicAffairs(MOEA)inMay2022withthefinalrulesexpectedbymid-year.TheMOEAisaimingtoallocate1.5GWofoffshorewinddevelopmenteachyearfrom2026to2031foratotalof9GW.Round3Phase1capacitywillbeallocatedthroughthree(3)auctions.Theauctionof3GWfor2026-2027(“Phase1-1”)isscheduledtobeheldlaterin2022,theauctionfor2027-2028capacity(“Phase1-2”)willbeheldin2023andthatfor2030-2031(“Phase1-3”)in2024.Criticaltothesteadyprogressionofthemarketwillbethegovernment’slocalisationstrategy,whichaimstoconsolidatetheentiresupplychaininTaiwan,fromturbinecomponentstosubmarinecablestoshipbuilding.Theindustrymustbalancegrowthwithlocalcontentrequirements.IntheRound3documents,theIndustrialDevelopmentBureau(IDB)hasspecifiedatotalof26itemsas“keydevelopmentitems”.Abidderwillhavetocommittoprocurelocallyallthesekeydevelopmentitemsforatleast60%ofitsproposedcapacity.Therewillalsobeopportunitiestogobeyondthe60%andreceiveadditionalpointsinthescoringsystem.Despitethesechanges,therequirementsintheRound3rulesarestillverychallenging.ApartfromthestrictLocalContentRequirement(LCR),theGovernmentisalsointroducingtwofactors:apriceceilingandaprojectcap.TheGovernmentisintroducingapriceceilingintheauctionattheMarketoutlookforcumulativeinstalledoffshorewindcapacityinTaiwan(MW)1.AvoidancecostistheaveragepriceofcoalfiredpowerforTaipower.030006000900012000150002030e14,30812,80811,3089,8088,3085,3081,6101282,7023,3442372029e2028e2027e2026e2025e2024e2023e2022e20212020Source:GWECMarketIntelligence,June2022Marketstowatch2021MarketstoWatchGWEC.NETavoidancecost1ofTaipower.Thegovernmentwasinspiredbytheexampleofzero-subsidiesauctioninEurope,aswellastheburgeoningCorporatePPAmarket.ThepriceceilingisgivingdevelopersabigchallengeasmarketdemandintheCPPAisnotclearandthepriceceilingcanalsodeflatetheCPPApricesignificantly.ThelackofalongtermstablePPApricecanalsoleadtohighrisksforprojectfinancing.Theotherfactoristheprojectcap,whereprojectsarelimitedto500MW(withthepossibilitytoincrease100MW).ThegoaloftheGovernmentistoencouragecompetition.However,withsomanyfactors,LCRandprojectcapalltogether,theGovernment’scostreductiontargetcouldbeveryhardtoachieveatthesametime.DevelopmentofthesupplychainSignificantsupplychaininvestmentshavealreadybeenundertakeninTaiwanwithfurtherprogressmadeinthepast12months.FollowingtheinaugurationofSiemensGamesa’snacelleassemblyfacilityinTaichunginSeptember2021,theVestas-TienLiblademanufacturingfacilitylocatedatthesamecitybuilttheirfirstbladeforV174-9.5MWoffshoreturbineinApril2022.Inadditiontolocalproducednacellesandcomponentsthatalsoincludetransformers,switchgears,rotorhub,towers,foundationsandcables,CDWE,ajointventurebetweentheTaiwaneseshipbuilderCSBCandDEMEOffshore,andDongFangOffshoreareworkingonthefirstTaiwaneseflagoffshorewindinstallationvesselandcable-layingvesselrespectivelywiththedeliveryexpectedtotakeplacenextyear.Withinthenextdecade,Taiwanwillachievemorethan12GWofinstalledoffshorewindcapacity,becomingthesecondlargestoffshorewindmarketinAsiaaftermainlandChina,withanestablisheddomesticsupplychain.Thesectorwassupportedbyafeed-intariff,afour-yearwindpowerpromotionplanandarelativelyopeninvestmentenvironment.LimitedlandspaceandhighenergyinsecurityfurthercompelsTaiwantolooktocoastalzonesforpowerproduction.Powersectorreformisalsoonthehorizon,withamendmentsin2017totheElectricityBusinessActwhichmandatedtheunbundlingofutilityTaipower’sgeneration,transmissionanddistributionbusiness,andtheliberalisationoftheelectricitymarkettoenablemultiplebusinessmodelsfordirectprocurementofrenewableenergy.MarketstoWatch6263GWECGLOBALOFFSHOREWINDREPORT2022India’soffshorewindsectorhasgainedmomentumasaresultofthePrimeMinister’sannouncementofnetzerotargetsatCOP26andthecountry’sstrengthenedstrategictieswithbilateralinstitutionsforharnessinggreenenergy.Inamulti-prongedapproachtobolsterclimateactionatCOP26,Indiaalsoannounceditsincreasedambitionsofinstalling500GWofnon-fossilfuels-basedpowergenerationcapacityby2030,inclusiveof30GWoffshorewindcapacity.Auctionsto2030toincludeoffshorewindblocksInMarch2022,theMinistryofNewandRenewableEnergy(MNRE)heldanindustry-wideconsultationonitsdiscussionpaper“EstablishmentofOffshoreWindEnergyProjectstoachieveatargetof30GWby2030.Onbehalfoftheoffshorewindindustry,GWECpresentedandsubmittedinputstotheMNREoutliningenablingfeaturesandprospectivegaps.Afteradetailedreview,inJune2022,theMNREannouncedIndia’soffshorewindbidtrajectoryasperbelow:1lBeginningwithfinancialyear(FY)2022-2023,offshorewindbidsof4GWcapacityperyearforaperiodofthreeyearstoberolledoutoffthecoastofTamilNaduandGujaratforsaleofpowerthroughopenaccess/captive/bi-lateralthird-partysale/merchantsale.lForthesubsequentfiveyears,anannualbidvolumeof5GWplanneduntilFY2029-2030.lPowerfromalloffshorewindcapacitiesthatwillbebidoutuptoFY2029-2030shallbeevacuatedandtransmittedfromoffshorepoolingsubstationstoonshoretransmissionnetworksfreeofcost.lThefirst8GWofcapacitybidsshallbeeligibleforthebenefitsofgreenattributessuchascarboncredits.ThesefiguresconveythatIndiawouldawardbidstotalling37GWofcapacityfrom2022-2029,whichcanoffsettheimpactofunfulfilledtargetof5GWby2022.Itisnotyetclearhowmuchofthecapacityallocatedthroughbidswouldbeinstalledby2030,againstthetargetof30GWofinstallationsbytheendofthedecade.Whilethisdevelopmentinvitesenthusiasm,thefollowingmustbeprioritisedaheadofanycapacitybidding:lResultofFloatingLiDARbyNIWE:NIWEisyettoawardtheE-tenderforsupply,installation,andcommissioningofintegratedfloatingbuoysformountingLiDARsatthreelocationsinGulfofMannar,offtheTamilNaducoast.2TheE-tenderhasbeenopenedupthreetimes,withthelastoccasionnotingclosureinearlyMarch2022andanawardbyApril2022.lApprovalofViabilityGapFundingbytheMinistryofFinance:Viabilitygapfundingorotherfinancialincentivescanhelptobuildconfidenceanddrivestakeholderparticipation.lPolicyandregulatoryclarity:GWEC’sIndiaOffshoreWindWorkingGroupisworkingwithgovernmentandindustrystakeholderstoshareglobalexperienceandadvocateforIndiaPlannedBidTrajectory(GW)202220320242025375555444530702026202720282029TotalBidCapacityby20302030OshoreWindInstallationTargetOshoreWindTechnicalPotentialinGujaratandTamilNadu(NIWE)OffshorewindplannedbidtrajectoryvsinstallationtargetvsearmarkedpotentialCredit:MNRE,NIWE,GWECMarketIntelligence1.https://pib.gov.in/PressReleseDetailm.aspx?PRID=18327082.(ZoneB1,ZoneC1&ZoneE2)MarketstoWatchGWEC.NET64requiredpolicyclarity,costreductionstrategy,andoffshorewindroadmap.Importantaspectstooutlineinclude:socioeconomicawarenessamongindigenous/fishingcommunities;developingarobustMSPframework;buildingoutportandgridinfrastructure;ensuringvesselavailability;andoffshorewind-tailoredregulationandstandards.Timelyapprovalofpermitsandallocationofclearances,powerevacuationandtransmissioninfrastructurecommissioningandadherencetoPPAsigningtimelineswillalsoberequiredtoensureanexpedientinstallationtimeline.Throughstrategicalliancesandinstitutionalpartnerships,theGovernmenttofIndiaisalreadystrengtheningitsexistingexpertiseofoffshorewind:lRenewableEnergyCatapultandNIWEhaveannouncedaJointDeclarationofIntent(JDI)toestablisha5-yearcollaborationprogrammetosupporttheUKandIndia’soffshorewindindustry.3lUndertheMoUbetweenIndiaandDenmark,aknowledgehubcalledtheCentreofExcellenceforOffshoreWindandRenewableEnergy(CoE)waslaunchedinSeptember2021fortheadoptionofacomprehensiveandcoherentapproachleadingtocost-effectiveoffshorewindpower,withaviewtomobilisingsignificantinvestment.AninitialreportinMay2022estimatedthelowestpossibleLCOEby2025and2030couldbeintherangeof11.2-7.4INR/kWhand7.8-5.2INR/kWh,respectively.4TheIndianpublicsectorundertakings(PSUs)havealsobeenencouragedbythegovernmenttoscaleuptheirrenewableenergyportfoliobyparticipatingintheforthcomingoffshorewindbids.Thishasopenedadoorforwin-winpartnershipsbetweeninternationaloffshorewindplayersandPSUs.Inrecentyears,oilandgascompanyONGCandtheNationalThermalPowerCorporation(andlargestpowergeneratorutilityNTPC)haveenteredintoaMemorandumofUnderstanding(MoU)toexploreoffshorewindopportunities.Germany-basedRWERenewablesandutilityTataPowerRenewableEnergyhavesignedaMoUtojointlydevelopoffshorewindprojects.Offshorewindiscriticaltonetzeroby2070goalMeetingIndia’snetzerotargetrequiresamassivepushfordecarbonisationandrenewableenergycapacity.Thiswillsupportthetransitionfromfossilfuelstocleanenergyaswellasmeetevolvingpowerdemands.Whileutility-scalerenewableenergytechnologiessuchaswindandsolarfacelandallocationdelaysforprojectdevelopment,offshorewindhasanopportunitytomitigateorevenavoidthislegacychallenge.TheMNREcouldexploitIndia’smassiveoffshorewindpotentialinthemediumtolong-termtostrengtheneffortsforclimateresilienceandenergysecurity.LearningsfromcountriesinEuropeshowcasethepromisingroleofoffshorewindtowardssupportingIndia’sNationalGreenHydrogenmission,cleanpowerdemandfromthecommercialandindustrialsegmentandenergyexports.Enablingoffshorewindpolicieswillthusbepivotalfordrivinginvestorparticipationandprojectriskmitigation.Along-termnon-solarRPOtrajectoryspecifictooffshorewindandaproduction-linkedincentivesschemefordomesticoffshorewindmanufacturingcouldsupportathrivingoffshorewindindustryinthecountry.Alongsideotherrenewableenergytechnologies,offshorewindmustbeprovided“deemedgeneration”status.Furthermore,agrowingpoolofinnovativefinancingmechanismssuchasblendedfinanceandGreen/MasalaBondsfortheinitialphaseofoffshorewindmarketdevelopmentcouldbeleveragedtosupportearlyprojectfinancing.3.https://www.ukri.org/news/ukri-india-announces-new-initiatives-during-uk-pms-visit-to-india/4.Theserevisedestimatesarebasedonrecentmarketchangescomparedtothe2021FIMOIreportversion-1.See:https://coe-osw.org/first-indian-technology-catalogue-with-offshore-wind-data/.5.GlobalWindReport2022,GWECMarketstoWatchGWECGLOBALOFFSHOREWINDREPORT2022Brazilispositioningitselfasahighlypromisingoffshorewindmarketwithanopportunityforregionalandgloballeadership.Offshorewindisseenasoneofthemostpromisingnewrenewableenergytechnologiesinthecountry,contributingtoajustenergytransitionandbenefitingfromgreenrecoverypackages,inwhichmorethanR$250billion($49billion)hasbeenprovisionallyallocatedoverthenext10yearstoinvestinthegenerationandtransmissioninfrastructureofrenewableenergy.Thegrowthoftheoffshorewindsectorisassociatedwithhavingpositivesocioeconomicbenefits,suchasjobcreation,whichwillinturnreducethesocialincomegapthatexistsinBrazil.Jobcreationwillplayapositivepartinincreasingtheaverageincomeofthoseintheworkforcebyagreaterproportionthanthatofanyotherexistingrenewableenergytechnology.Criticalregulatorybreakthroughs2021wasadecisiveyearinBrazil’soffshorewindhistory.ABEEólica(AssociaçãoBrasileiradeEnergiaEólicaandNewTechnologies)ledthechargeforthecreationandestablishmentofaregulatoryframework,culminatinginahighlysuccessfulmeetingwiththen-MinisterofMinesandEnergyBentoAlbuquerqueandSenatorJeanPaulPratesinApril2021.Asaresultofthisengagement,inthefirstweeksof2022,thelong-awaitedDecreeNº10.946/2022waspublished,settingoutthemainguidelinesforoffshorewindprojectsinBrazil.Thedecreeprovidesaframeworkfortheassessmentofseabedforthedevelopmentofoffshorewindprojects,andshowsthatthestagesofplanningandpermittingarebeingdefinedtoensuretheeffectiverolloutofthistechnologyisbeingfacilitated.AnotherpositiveregulatorysignalisthePL576/2021.Thisbillisnotlimitedtothedevelopmentofoffshorewindsolely,butalsodetailsthescopetoproducerenewableenergyatsea,whichopensuppossibilitiesfornewtechnologiesinthefuture,suchasfloatingoffshorewind.PL576/2021createsaregulatoryframeworkfortheprocessofgrantingoffshorewindfarmswithauctions,andchargesthepaymentofspecialparticipationstotheUnion,statesandmunicipalities–resourcesthatarenotprovidedforinthepresidentialdecree.DiscussionsareongoingandtheprospectofapprovalisstillundeterminedanddependentonseveralSenateassessments.Whenaddressingthechallengesofoffshorewindinthecountry,itisimportanttohighlightBrazil’sproactiveregulatoryapproachtothisemergingindustry.Atanationallevel,environmentallegislationandregulationshavealreadybeendevelopedinlinewithincreasedmarketdemand.Thecountryalreadyhasmorethan100GWofoffshorewindenergyprojectsregisteredforenvironmentalimpactassessmentbyIBAMAandisstrivingtoestablishitsregulatoryapparatus,whichshouldbespecifiedlaterin2022,inthedetailsofDecreeNo.10,946/2022.BrazilThecountryalreadyhasmorethan100GWofoffshorewindenergyprojectsregisteredforenvironmentalimpactassessmentbyIBAMAandisstrivingtoestablishitsregulatoryapparatusMarketstoWatch65GWEC.NETDespitethispositivemomentum,theoffshorewindindustrywillstillfacesignificantchallenges,suchashowtodevelopadomesticsupplychain.Brazilwillalsoneedtoaccommodateandorganiseitsstructureofmaritimeroutesandports,incorporatingtheport-industryconcept.Therearealsochallengesregardingtransmissioninfrastructure,whichwillneedtobeovercome.LastlythereistheconsiderationofcostandvaluecompetitivenesswithintheBrazilianmarket,asoffshorewindwillneedtocompetewithothermorematureandhighlycompetitivesupplychains,suchasonshorewindandsolarprojects.What’snextonthehorizonAfirststephasalreadybeentakenwiththepublicationofthedecreeandtheregulationofthetransferofuseforseaareas,whichshouldbereleasedlaterin2022.Thisisthestartingpointfordefiningotherregulatoryissues.Oneofthemostrelevantaspectsforinvestorsaretherulesthatwillbeestablishedforenergyauctions.Aftertheregulationoftheassignmentofareas,thenextstepistoholdthefirstoffshorewindenergyauctioninthecountry.ABEEólicahascollaboratedwiththemaingovernmentalandregulatoryinstitutionstoobtaintheseguidelinesin2022,thusdirectingthepathforcarryingoutanenergyauctioninthecomingyears.Itisanticipatedthatbytheendofthisdecadethecountrywillhaveitsfirstwindturbinesoperatingatsea.Thiswouldallowforastrongmarketexpansionduetoitscapacitytosupplyotherrenewablegenerationchains,suchasgreenhydrogen.Thereisnodoubtthatoffshorewindisalreadyasourceofinvestmentopportunities,growthandmodernisationfortheBrazilianeconomy.ThereisanopportunityforthecountrytobeoneofLatinAmerica’shubsforinvestmentinrenewableenergytechnologyandoffshorewind.Forthisfuturetomaterialize,itisessentialthattheoffshorewindindustrybeviewedundertheconceptofnewindustrialplanningintegratedwithenergyplanning.MarketstoWatch66GWECGLOBALOFFSHOREWINDREPORT2022Sincetheambitious30GWby2023offshorewindtargetwasreleasedbytheBiden–HarrisAdministration,therehasbeenanoticeablypositiveattitudetowardspushingtherolloutofoffshorewindonthepoliticalagenda.AlthoughnonewoffshorewindturbineswereinstalledintheUSin2022,theUSoffshorewindmarketcontinuestogainstrongmomentuminbothstateandfederalwaters.RaisedactionatfederallevelTheBureauofOceanEnergyManagement(BOEM)istheUSorganisationthatmanagesandisresponsiblefortheoffshorewindmarketinfederalwaters.SincetheissueoftheOuterContinentalShelf(OCS)RenewableEnergyProgram,whichmadetheproductionandtransmissionofrenewableenergysourceslikeoffshorewindmucheasiertoprocure,BOEMhasissued25commercialand10competitiveoffshorewindenergyleasesintheAtlanticOcean,rangingfromMassachusettstoNorthCarolina.Topositionthedomesticoffshorewindindustrytomeetthe2030target,BOEMhasbeenextremelyactiveinthepast12months,workingtoidentifyareasofunexploredwindenergypotential.Thishasbeenpairedwithfastpacedleasingauctionsinabidtoalignoutputwithambition.ThecollaborativeeffortsbyBOEMandafloodofdevelopersintheNewYorkBightleasingroundledtothisbeingthelargesteveroffshorewindindustryauctioninUShistory.WiththeproposalbeingmadeinJanuary2022,andtheauctionbeingheldinFebruary2022,therewasashortenedtimelinewhichsawthisauctionclosedinQ1of2022.Thisleasingroundsawtheauctionofcirca448,000acresofseabedoffthecoastofNewYorkuptoNewJerseyallocating5.6GWofoffshorewindcapacitytosixbidders.WitharecordUSD4.37billionbeinggeneratedinrevenue,theauctionsetnewrecords.CominginsecondtothisauctionwastheannouncementofthewindenergyauctioninCarolinaLongBaywhichsawtheauctionoftwoleasingareasoffthecoastofNorthandSouthCarolina.Atfullcapacitythisregionhasthepotentialtoproduceanoutputof1.3GWofoffshorewindenergywhichcouldpower500,000homes.ThetwowinningdevelopersoftheauctionroundgeneratedarevenueofUSD315million.FollowingtheCarolinaLongBaylease,completedbyBOEMinMay,anowclearschedulefortheCalifornianoffshorewindmarketwillseetheleasingof373,268acresofseabedinfederalwatersoftheHumboldtCallandMorroBayCallareas.Thisboastsapotentialof4.5GWofinstalledwindpowergeneration.Thisauction,whichfollowstheCallforInformationandNominationsforoffshorewindareasinCaliforniain2018,isplannedtotakeplaceinQ4of2022andwillbethefirstUSprojecttoawardoffshorefloatingwind.BOEMisexpectedtopublishaProposedSaleNoticeinQ3of2022thatwillallowforapublicconsultation,welcomingcommentsonthedetailsaboutthetwoproposedleaseareas.2LookingaheadtowhatcanbeexpectedfromtheUSandtheeffortsofBOEM,thepathwayshowninfigure1indicatesthatthenextareaforoffshorewindgrowthisduetobetheGulfofMexico.BOEMhasissuedaCallforInformationandNominationstoassessthecommercialinterestandviabilityinthisregion.Inlightofthis,BOEMisscheduledtoissueadraftEnvironmentalAssessmentfortheUnitedStatesMarketstoWatch67GWEC.NET68USOffshoreWindLeasingPathForward2021-2025OffshoreWindLeasingPathForward2021–2025OregonNorthern&CentralCaliforniaGulfofMaineNYBightCentralAtlanticCarolinaLongBayGulfofMexicoLeaseSaleWindEnergyAreaDesignationEstimatedTimeRangeKEYExistingLeaseAreasPlanningandAnalysisLATE2021LATE2022MAY2022Q12022Present202220232024SEPT2022NOV2021MID2022Q22023202320242025Q32022Q32023BureauofOceanEnergyManagementAsofOctober2021COMPLETECarolinaLongBayNorthern&CentralCaliforniaGulfofMexicoCOMPLETENYBightCentralAtlanticGulfofMaineOregonOurpathforwardwillhelpachievethefirstevernationaloffshorewindgoaltodeploy30gigawattsofoffshorewindby2030,whichwouldcreatenearly80,000jobs.LeasingProcessMarketstoWatchGulfofNewMexicointhemiddleof2022.OtherareasofinterestwithplannedauctionsincludeCentralAtlanticandOregonin2023andtheGulfofMainein2024.InadditiontotheDepartmentofInterior’sapprovaloftheconstructionandoperationplanoftheVineyardWindproject-thefirstlarge-scaleoffshorewindfarmintheUnitedStates-inMay2021,BOEMhasalsostartedaseriesofenvironmentalreviewsofoffshorewindprojectsontheeastcoast.TheseincludeRevolutionWindproject,OceanWindproject,KittyHawkoffshorewindproject,DominionEnergy’sCoastalVirginiaOffshoreWindprojectandUSWind’swindprojectoffshoreMaryland.TheendoflastyearalsosawtheannouncementoftheRecordofDecision(ROD)byBOEMfortheSouthForkWindproject.SimilartotheVineyardwindproject,thisprojectisduetocomeonlinedeliveringpowertoNewYorkin2023.GrowingambitionincludingfloatingatstatelevelAtthestateleveltheUShasexperiencedariseindeclaredambition,withthisyear’sstandoutannouncementofanadditional3GWofoffshorefloatingwindinstallationsby2030bytheCaliforniaEnergySource:BOEM69GWECGLOBALOFFSHOREWINDREPORT2022Commission(CEC).Floatingwindisestablishingitsplaceintheoffshorewindindustryasasolutiontoexploitthevastwindpotentialbeingofferedbysiteswithdeeperwaters.Thisnewtechnologyisenablingevengreaterambitionthaneverbefore.InadditiontothetargetinCalifornia,anewbilloutliningaplantodevelop3GWoffloatingoffshorewindcapacityinOregonby2030hasbeenintroducedinthestate’sHouseofRepresentatives.Ifenacted,thebillwillenableplanningthedevelopmentof3GWofcommercialscalefloatingwindprojectswithinfederalwatersoffOregon’scoastby2030.Louisianaalsoannounceda5GWtargetofinstalledoffshorewindcapacitybytheyear2035,makingthisthestatesfirsteverpolicybasedClimateActionPlan.Thisplandetailsaroundeightyfouractionsthatmustbeconductedtoenablesocioeconomicgrowthinthestate.Massachusettsalsopassedanincreasedoffshorewindtargetof5.6GWby2027atstatelevelinlateQ1of2022,whichisthesecondtimethatthestateraiseditsoffshorewindtarget.Sofarthestatehasprocured3.2GWofinstalledoffshorewindcapacityandsothetrajectoryispositiveandwithinreach.Aftertakingintoconsiderationtheprogressmadeatstatelevel,thetotalannouncedoffshorewindprocurementtargetsarenow49.5GW.Thisisa28.6%increaseinstatelevelcommitmentsfromthepreviousyearwherethetargetwaspositionedat38.5GW.IfthesetargetsaremetthiswillpropeltheUStobeabletomakesignificantchangesinglobalemissioncontributions.Strongmarketgrowthexpectedfrom2025onwardsAccordingtotheGWECMarketIntelligenceglobaloffshorewinddatabaseasofJune2022,theUSoffshorewindpipelinetotalhasreached40GWforbothfederalandstatewaters.Thisincludes21offshorewindprojectswhichhavesecuredofftakeorwonstatesolicitationsandannouncedananticipatedyearofoperation.Developersexpectatotalof18GWofoffshorewindtobeonlinebetween2023and2029(seefigure3).Ofthe18GWofoffshorewindcapacity,23.4%islikelytobebuiltinNewYork,followedbyNewJersey(20.5%),Massachusetts(17.7%),Virginia(14.4%)andMaryland(11.2%),makingthesethetop5offshorewindstatesinexpectednewinstallations.Withregardstoprojectownership,thesituationisthesameaslastyearandthemajorityofassets,plannedtobebuiltin2023-2029,arecontrolledbyEuropeandevelopersincludingØrsted,AvangridRenewables(asubsidiaryofSpain’sIberdrola),EDPR,OceanWindandCIPaswellasoilandgascompanieslikeEquinor,BPandShell.ComparedtoGWEC’sUSoffshorewindoutlookinlastyear’sGlobalOffshoreWindReport,adjustmentshavebeenmadeforthecommissiondateforprojectsexpectedtocomeonlinein2024and2025.Theprimaryreasonforthisisthechangeofprojectcommissiondateforsomeprojects.Additionally,inGWEC’supdatedUSoffshoreoutlookweincludedtwoprojectsthatwonthesecondoffshorewindsolicitationsinMarylandandanothertwothatwonthethirdsolicitationsinMassachusettsattheendof2021.Asaresult,GWECMarketIntelligencebelievesthatthestrongoffshorewindgrowthislikelytotakeplacefrom2025insteadof2024.Note:Thisforecastissolelybasedonprojectswithcommissiondateannounced.Fortheentire10-yearforecast(2022-2031),pleaseseePage94inMarketOutlooksection.Source:GWECMarketintelligence,June2022Expectedannualoffshorewindinstallationbystate,2022-2029(MW)5000400030002000100002020MaineRhodeIslandMassachusettsNewYorkVirginiaConnecticutNorthCarolinaNewJerseyOhioDelawareMaryland202120222023202420252026202720292028MarketstoWatchGWEC.NETAsofJune2022,offshoredevelopershaveselectedorannouncedpreferredturbinesuppliersfortenoffshoreprojects.ThankstoDominionEnergy’s2,640MWprojectoffthecoastofVirginia,SiemensGamesaremainsasthelargestwinnerwitha4,354MWorderbacklogintheUS.VestastookoverGEasthesecondlargestsupplierafterEmpireOffshoreWind-ajointventurebetweenEquinorandBPnamedtheDanishturbinemanufacturerasthepreferredsupplierforthe2.1GWEmpireWind1andEmpireWind2offshorewindprojectsinNewYorklastOctober.Although,GERenewableEnergy’sorderbacklogintheUSisjust1%lowerthanVestas.Asoftoday,themostpopularmodelsselectedforUSoffshorewindprojectsareSGRE’sSG15-222DD,VestasV236-15.0MWturbinesandGE’sHaliadeX-13MWDD.OvercomingchallengesintheUSsupplychainFollowingthebreakthroughsmadeonthefederalandstatelevels,furtherprogresshasbeenmadetoaddressthefourchallengesthatweassessedlastyear.AuthoritiesaremakingampleefforttotakeadvantageoftheexpertiseofEuropeanscompaniesandmarketstoleveragewindpotentialinaproject-basedapproach.Localsupplychain–BalanceofplantTheUSembarkedontheconstructionofitsfirstoffshorewindtowermanufacturingplantasof2022,acontractawardedbythePortofAlbany.AUSbasedOEMwonaUSD42.7millioncontractaspartofajointventurewithaviewtomanufacturinghomegrownwindtowersbylate2023.AnothercomponentthatisdevelopingintheUSsupplychainisthatofcables.Attheendoflastyear,theUKbasedPrysmianGroupsecuredUSD880millioninoffshorewindcablingprojects,awardedbyVineyardWind.Asaresult,theywillbebuildingacableplantintheUStoaccommodatethecommissionofthethreecorecables(HVAC275kV)withXLPEinsulationandsinglewirearmouring.Localsupplychain–VesselsTheJonesActstillstandsasadominantbottleneckaddingtothelengthytimelinesofprojectrolloutsintheUSoffshorewindmarket.However,themarkethasadjustedtothistodeliverprojectswhichare,inmanycases,supportedbyEuropeanbasedcompanies.Themarketis,however,experiencingraisedprivatesectoreffortstoworkaroundtheserestrictionsincludingthejointventurebyEquinorandBPtosupporttheEmpireWindoffshorewindfarmproject.Togethertheyhaveawardedalong-termserviceoperationvessel(SOV)charteragreementtoEdisonChouestOffshore(ECO),aUS-basedcompany,inordertobecompliantwiththeJonesAct.ThisSOVwillbethefirstinUSwaterstobehybridwithcapabilitytooperatepartiallyonbatterypower.TheDanishsubsidiaryMaerskSupplyServicehasthisyearcharteredawindturbineinstallationvessel(WTIV),whichwillbeusedintheinstallationofthe15MWVestasmanufacturedturbinesinbothEmpireoneandtwo.Thisvesselisexpectedtocomeintooperationaround2025.MaerskmitigatedconcernsregardingabreachintheJonesActbycharteringthisvesselasitisconstructedwithbargesandtugssuppliedandmanagedbyKirbyOffshoreWind,aUS-basedcompany.Infrastructure–PortsInvestmentsinportinfrastructureisacriticalcomponentofenablingtheoffshorewindsectortoplayit’spartinreachingdecarbonisationtargets.MarketstoWatch7071GWECGLOBALOFFSHOREWINDREPORT2022Projectsinsupportofaccommodatingthedevelopmentofthenationsportsinclude:lThePortofHumboldtBayhasreceivedUSD10.5millionininvestmentfortheportsrenovationinordertosupporttheintended1.6GWofoffshorewinddevelopmentintheHumboldtcallarea.lTherearepositiveinvestmentsignalsinthegrowthofoffshorewindcomingfromregionslikeMassachusettswheretheBaker–PolitioAdministrationannouncedplanstoinvestUSD100milliontowardssupportingoffshorewindportsinthestate.lThePortofAlbanyhasreceivedUSD29.5milliontoinvestinthenecessarydevelopmentoftheportsinfrastructuretoallowittobetransformedintoanoffshorewindtowermanufacturingfacility.lInAugust2021thePortofVirginialeasedanareaofthePortsmouthMarineTerminaltoDominionEnergytoaidthedevelopmentofthecountry’slargestoffshorewindproject.lPortofDavisvilleandtheSouthQuayMarineTerminalinRhodeIslandhavealsobeenawardedUSD95millioninstatesupporttoallowforupgradestotheinfrastructureforupcomingprojectsalongtheEastCoast.Thisdormantsitewillbeupgradedtoenableoffshorewindrelatedfacilitiestobedevelopedinlinewithwindenergyrelatedbusinessactivitiesinthearea.Infrastructure–GridAStateAgreementApproach(SAA)hasbeenapprovedbytheFederalEnergyRegulatoryCommission(FERC)toimplementthewindtransmissiongridsolicitedinNewJersey.TheSAApermitstheNewJerseyBoardofPublicUtilities(NJBPU)andPJMInterconnectiontouseacompetitiveplanningprocessfortheselectionofaproviderofatransmissionsolution.ThejointSAAreceived80proposalsfromutilitycompaniesanddevelopersindicatinganappetiteforfindingtransmissionsolutionsonthesupplyside.Itisanticipatedthatadecisionontheoutcomeofanyrecommendationsordecisionswillbeconfirmedlaterthisyear.WorkforceDevelopmentDedicatedresourcesforthegrowthanddevelopmentofhumancapitalisessentialinenablingtheoffshorewindsectortoreachitreachitsfullcapacity.lTheBOEMCarolinaLongBayOffshorewindauctionsawanewframeworkbeingintroducedwherebybiddersareawardeda20%monetarycreditwhichmustbecommittedtothesupportofworkforcetrainingprogramstoenablethedevelopmentofthelocalsupplychain.ForthisauctionroundthetotalcreditawardedforinvestmentinworkforcedevelopmentisaroundUSD42million.lTheNorthAmericaBuildingTradeUnion(NABTU)andØrstedhavecollaboratedtoprovidetheannouncementofaProjectLabourAgreement(PLA)whichstrivestohelptheUSworkforcedeveloptoaccommodatetherequirementsoftheoffshorewindfarmsupplychain.MarketstoWatchGWEC.NETConsideringJapanasanarchipelagowithstrongwindspeeds–evenstrongerandsteadieroffshore–thedevelopmentofoffshorewindisindispensabletoincreasingrenewableenergysupplies.Japanhasapproximately128GWoffixed-bottomoffshorewindpotentialand424GWoffloatingoffshorewindpotential.1Despitethehugewindpotential,Japandoesnothaveanylarge-scalecommercialwindoperationsbuttimesarechanging.Withrisingfossilfuelcostsandagoaltoachievecarbonneutralityin2050,theGovernmentofJapanhasrecognisedoffshorewindasapowersourcethatcanbeintroducedinlargescalewithoutputtingsignificantburdenontheeconomyandwithsignificantcostreductionpotential.Boththepublicandprivatesectorsarenowlookingtoutilisethecountry’sabundantoffshorewindresourceandtostayself-reliant.InNovember2021,Japan’sbiggestrefiner,EneosHoldings,announceditsdecisiontobuyJapanRenewableEnergy(JRE)foraboutJPY200billion($1.8billion),joiningthelistofmajorglobalcompaniesmovingawayfromfossilfuelsandexpandtheirlow-carbonbusiness.2ThiswillmarkthefirstbigpurchaseofarenewablesfirmbyatopJapaneseoilcompany.LastDecember,thefirstcommercial-scalewindfarm,locatedatNoshiro,Akita,startedtakingshapeasitreceiveditsturbinecomponentswithagoalofcommencingcommercialoperationin2022.3MakingoffshorewindthemainrenewablepowersourceinJapanSincethereleaseofthe“ActonPromotingtheUtilizationofSeaAreasfortheDevelopmentofMarineRenewableEnergyPowerGenerationFacilities”(hereinafterreferredtoasthe“ActonPromotingUtilizationofSeaAreasforRenewableEnergyGeneration”)inApril2019,Japanhasbeensteadilyworkingtoexpandoffshorewindpowergenerationbycreatingacertificationsystemandlicenseduseofdesignatedpromotionalseaareaswhilemaintainingharmonisationwithlocalcommunities.BuildingontheAct,otherkeypolicydocumentsandregulationssuchastheVisionforOffshoreWindPowerIndustry(releasedinDec2020),theGreenGrowthStrategyThroughAchievingCarbonNeutralityin2050(updatedandannouncedinJune2021)andtheSixthStrategicEnergyJapanComparisonofFifth&SixthStrategicEnergyPlanEnergyMixby2030SixthStrategicEnergyPlan(ApprovedinOctober,2021)FormerFifthBasicEnergyPlan(preparedin2015)Photovoltaic103.5~117.6GW(129~146GWh)64GWWind(onshore)17.9GW9.2GWWind(offshore)5.7GW0.8GWGeothermal1.5GW1.4~1.6GWHydropower50.7GW48.5~49.3GWBiomass8.0GW6~7GWElectricPowertobegenerated336.0~353.0GWh236.6~251.5GWh1.NEDOOffshoreWindConditionMap2.https://www.reuters.com/business/energy/eneos-says-buy-japan-renewable-energy-177-bln-2021-10-11/3.https://constructionreviewonline.com/biggest-projects/the-akita-noshiro-offshore-wind-farm-project-timeline/Note:5.7GWofoffshorewindrepresentsanexpectedinstalledcapacity.Thetargetof10GWby2030isdefinedasawardedbyauctionprojectssetoutbytheFirstVisionforOffshoreWindPowerIndustry.Source:JWPA,Dec2021MarketstoWatch7273GWECGLOBALOFFSHOREWINDREPORT2022Plan(approvedbytheCabinetinOct2021)wereupdatedandlaunchedwiththegoalofmakingoffshorewindoneofthemainpowersourcesinJapan.TheFirstVisionforOffshoreWindPowerIndustry,basedonacostreductionstudybyGWECandtheJapanWindPowerAssociation(JWPA),wascreatedtoboostlocalandinternationalinvestmentconfidenceandfacilitateinvestmentdecisions.Thisisdonebyprovidingavisibleoffshorewindprojectpipeline,acost-effectivepowersupplychainandaconducivebusinessenvironmentasthegovernmentsetouttodesignate1GWofpromotionalzonesforauctionannuallyforthenext10yearstoreachanawardedcapacityof10GWby2030and30-45GWby2040,includingfloatingoffshorewind.Inthesameperiod,theGreenInnovationFundforOffshoreWindwaslaunchedtoacceleratetheJapanOffshoreAuctionProgressListStageofProgressRound1(FY2019)Round1.1(FY2020)Round2(FY2021)Initial(July2019)Progress(July2020)Initial(July2020)Progress(November2020)Initial(Sep2021)Progress(March2022)CandidateZonesJapanSeasideNorth,AomoriJapanSeasideSouth,AomoriMutsubay,AomoriHappou-cho&Noshiro,AkitaKisakata,AkitaMurakami&Tainai,NiigataEnoshimaSaikai-city,NagasakiGann-uandMinami-Shiribeshi,HokkaidoHiyama,HokkaidoMutsubay,AomoriKisakata,Akita-city,AkitaYusa,YamagataMurakami&Tainai,NiigataIshikari-city,HokkaidoShimamaki,HokkaidoMatsumae,HokkaidoKuji-cuty,IwateAware-city,FukuiHibikinadaKitakyshu,FukuokaKaratsu-city,SagaGann-uandMinami-Shiribeshi,HokkaidoHiyama,HokkaidoMutsubay,AomoriPromisingAreasNoshiro,AkitaYurihonjo,AkitaChoshi,ChibaJapanSeasideNorth,AomoriJapanSeasideSouth,AomoriHappou-cho&Noshiro,AkitaEnoshimaSaikai-city,NagasakiKisakata,Akita-city,AkitaYusa,YamagataMurakami&Tainai,NiigataIsumi-city,ChibaJapanSeaSideNorth,AomoriJapanSeaSideSouth,AomoriEnoshimaSaikai-city,NagasakiAreaswithauctionalreadylaunchedGoto,NagasakiNoshiro,AkitaYurihonjoNorth&South,AkitaChoshi,ChibaNOTE:Happou-cho&Noshiro,AkitaRound2Auctionscheduleisbeingpostponed(PrevioubidsubmissiondeadlinewassettobeJune2022)SuccessfullyAuctionedGoto,Nagasaki-16.8MW(WonbyaconsortiumofsixcompaniesledbyTodaCorporation)Noshiro,AkitaPref-478.8MWYurihonjoNorth&South,AkitaPref-819MWChoshi,ChibaPref-390.6MW(All3sitesonbyMitsubishiCorporationConsortium)Source:JWPA,Dec2021MarketstoWatchGWEC.NET74next-generationtechnologydevelopmentwithafocusonfloatingoffshorewind.ByOctober2021,theMinistryofEconomy,Trade,andIndustry(METI)allocatedJYP119.5billion($940million)forvariouscostreductionprojectswithamaximumsubsidyperiodof12years(3-5yearsforcomponenttechnologydevelopmentandamaximum8yearsfortestinganddemonstration).TheseprojectsaimtoachieveagenerationcostofJPY8-9/kWh(EUR0.06-0.07/kWh)withseafloor-mountedturbineby2030.Mostimportantly,intheSixthStrategicEnergyPlanannouncedinOctober2021,thegovernmentrevieweditsenergypolicyprogressinthedecadeaftertheincidentatFukushimaDaiichiNuclearPowerStationandincreasedtheshareofrenewableinstalledcapacitybymorethan10%from22-24%intheFifthStrategicEnergyPlanto36-38%by2030.Thetotalofinstalledwindenergynowaccountsforabout5%ofJapan’selectricitysupply,with17.9GWfromonshorewindand5.7GWfromoffshorewind.MakingacentralisedsystemarealityRecognisingthelackofhigh-qualityprojectdevelopmentdataandtheinefficiencyofhavingmanyNominatedOffshoreWindAreasatGeneralSeaAreainJapanSource:JWPA,June2022MarketstoWatch14.Ishikari,HokkaidoTotal23AreasareundernominationatGeneralSeaAreainJapan16.Shimamaki,Hokkaido15.Gann-uandMinami-Shiribeshi,Hokkaido18.Matsumae,Hokkaido17.Hiyama,Hokkaido19.Mutsubay,AomoriPrefAuctionalreadylaunched1.Goto,NagasakiPref.PromotingArea6.Happou-cho/Noshiro-city,AkitaPref.2.Noshiro-city,AkitaPref.3.Yurihonjo-city,AkitaPref.(North)4.Yurihonjo-city,AkitaPref.(South)5.Choshi-city,ChibaPref.PromisingArea7.OgaKitakata,Akita-city,AkitaPref.8.Yusa,YamagataPref.9.Murakami&Tanai-cityNiigataPref.●10.Isumi-city,ChibaPref.11.AomoriPref.(JapanSeaNorth)12.AomoriPref.(JapanSouthSea)13.Enoshima/Saikai-city,NagasakiPref.UpcomingArea●14.Ishikari,Hokkaido15.Gann-uandMinami-Shiribeshi,Hokkaido●16.Shimamaki,Hokkaido17.Hiyama,Hokkaido●18.Matsumae,Hokkaiodo19.Mutsubay,AomoriPref.●20.Kuji-city,IwatePref.●21.Awara-city,FukuiPref.●22.HibikinadaKitayushu,FukuokaPref.●23.Karatsu-city,SagaPref.●New22.HibikinadaKitakyushu,FukuokaPref.23.Karatsu-city,SagaPref20.Kuji-city,IwatePref.UnderauctionJune2022:biddngcloseDec:2022winnerwillbeannouncedDevelopersaredecided10.Isumi-city,ChibaPref.5.Choshi,ChibaPref.13.Enoshima/Saikai-city,NagasakiPref.1.Goto,NagasakiPref.11.AomoriPref.(JapanSeaNorth)12.AomoriPref.(JapanSeaSouth)6.Happou-cho/Noshiro-city,AkitaPref.2.Noshiro-city,AkitaPref.3.Yurihonjo,AkitaPref.(North)4.Yurihonjo,AkitaPref.(South)7.OgaKitakata,Akita-city,AkitaPref.8.Yusa,YamagataPref.9.Murakami/Tainai-cityNiigataPref.21.Awari-city,FukuiPref.GWECGLOBALOFFSHOREWINDREPORT2022stakeholdersinvolvedinearly-stagesitesurveys,thegovernmentaimstoestablishacentralisedbiddingsystemwhereitwillworkwithlocalgovernmentduringtheinitialstageofsitedevelopmenttoefficientlyconductwindandothersurveysandsecurethepowergridinatimelymanner.ImprovementsandupdatesonrelevantActswillbemadebythegovernmenttoacceleratetheimplementationofprojectssuchasanewschemeforthetemporaryrighttogridconnection.InJuly2021,threegovernment-led,centrally-coordinatedresearchprojects,includingGann-uandMinami-ShiribeshiintheHokkaidoprefecture,SakataintheYamagataprefectureandHirono-chointheIwateprefecture(floatingoffshorewind)wereinitiatedasthefirstbatchoftestprojectsunderthegovernment-ledcentralisedsystem.Windresourcemeasurements,seabedsurveys,environmentalimpactassessmentsandlocalcommunitysurveysforthesethreeprojectswillbecompletedbythegovernmentbefore2025andmadereadyforfutureauctionroundsAclearcentralisedbiddingsystemschemewillbeestablishedwithinacoupleofyearsandwiththerecentRound1Auctionresult,whichhighlightedthelackofrelevantwinddevelopmentdata,theprocessislikelytobeaccelerated.Round1AuctionlessonslearntandthewayforwardInJune2021,aconsortiumofsixcompaniesledbyTodaCorporationwasselectedtobuilda16.8MWfloatingwindprojectoffshoreGotoCity,intheNagasakiPrefecture.Soonafter,inDecember2021,consortialedbyMitsubishiCorporationsuccessfullywonthedevelopmentrightforallthreefixed-bottomoffshorewindprojectsinNoshiro,YurihonjoNorthandSouth,andChoshiwithexceptionallylowtariffpricesof:JYP11.99/KWh(Euro87.85/MWh),JYP13.26/kWh(Euro97.15/MWh)andJYP16.49/kWh(Euro120.82/MWh)respectively.Withmanydevelopersstillunclearontheprecisepriceandnon-pricebiddingpointsassessment,theMitsubishi-ledconsortiadominatedtheRound1auctionbybiddingthecheapestelectricitypriceineachproject.TheresultraisedconcernsonbiddingproceduresandledtothepostponementoftheRound2auction(Happo-Noshirozone)biddingapplicationdeadlinewhichwasoriginallysetforJune2022.Japan’sgovernmentandthePublic-PrivateCouncilarenowworkingwiththewindindustrytoreviewandadjusttheexistingauctionbiddingframework.TheJWPAandwiderwindindustryhavealsosubmittedaproposaldetailingvariousimprovementsnecessarytoimprovetheexistingauctionsystemandachieveagoodbalanceofcostreduction,localcontentandmeetingthetarget.Thesuggestionsincludetheimplementationofappropriateinformationdisclosure,two-stagedeveloperselection,morereasonablepriceandnon-pricepointallocationandearlyintroductionofacentralisedauctionsystem.AlleyesonJapan’sfloatingoffshorewindWithJapan’sfloatingoffshorewindpotentialatmorethanthreetimesitsfixed-bottompotential,thisiswherethebulkofthewindresourceslie.Floatingoffshorewindisstillintheearlystagesofdevelopmentandcostremainshigh.Itwasonlyin2017thattheNorwegianenergymajor,Equinor,openedHywindScotland,a30MWfirstfull-scalefloatingoffshorewindfarm.However,thereisaneedfortheindustrytoacceleratethedevelopmentoffloatingoffshorewindandmovebeyonddemonstrationprojects,bydrawingonbothlocalandinternationalexperienceandexpertise.MarketstoWatch75GWEC.NETSouthKoreahasmadeheadlinesinoffshorewindinrecentyears.First,itsGreenNewDealannouncedin2020setoutatargettoachievenetzeroemissionsby2050,witha$52billiongreeneconomyinvestmentpackage.Thisincluded$7.7billionworthofinvestmentsinwind,solarandhydrogentechnologiesby2025,andtheestablishmentofamajortargetof12GWoffshorewindby2030.ItsnetzerotargetwaspassedinabillinSeptember2021,andaNationallyDeterminedContribution(NDC)submittedtotheUNFCCCinDecember2021alsoaimedtoreducegreenhousegasemissionsby40%from2018levelsto2030.1Inearly2021,SouthKoreaannouncedtheworld’slargestoffshorewindprojectof8.2GWoffthecoastofShinan,whichwouldprovidepowerto12millionresidentsinnearbySeoulandIncheonby2030.Theprojectisbeingdevelopedbyaconsortiumof33publicandprivateentities,includingtheutilityKoreaElectricPowerCorp(KEPCO)andlocalOEMslikeDoosanHeavyIndustries&Construction.2InMay2021,thegovernmentalsoannounceda6GWfloatingoffshorewindcomplexoffthecoastofUlsanby2030,bringingtogetherlocalandforeigndevelopers.Mostrecentlyin2022,thecountry’slargestoffshorewindturbinewasinstalledattheKoreaWindPowerDemonstrationCenterinSouthJeolla.The8MWprototype,developedbyDoosanaspartofanindustry/academia/researchproject,hasa100mbladeandtotalheightof232.5m.3ChangingdynamicsinnationalenergypolicyWhilestridesinambition,public-privatecooperationandtechnologydevelopmenthavebeenmade,thereareseveralconsiderationsforthetrajectoryofoffshorewindgrowthinSouthKorea.Generally,thecountry’srenewablesdeploymenthaslaggedbehinditsG20peers–windandsolarenergycompriselessthan4%ofthepowermixasof2020.4Mostelectricityisgeneratedbycoal,naturalgasandnuclearenergy.WhilecoalphaseoutisalsoslowerthanotherG20countries,coal-firedgenerationreducedfrom41%ofthepowermixin2015to36%in2020;however,thishasbeencompensatedforbyariseingasgeneration,whichincreasedfrom22%in2015to27%in2020.Thisispartlyduetothemutedgrowthofwindandsolardeploymentduringthisperiod.TherecentelectionofPresidentYoonSuk-yeolbyanarrowmarginpresentsanotherfactor.Hisconservativeadministrationisseenasbusiness-friendly,buthehasalsopubliclydisagreedwiththe2050carbonneutralitygoalandpledgedtoresumeconstructionofthenuclearplantspreviouslyputonhold.5Therevivalofnuclearenergyislikelytoresultinextensionsofcurrentoperatingpermits;design,approvalandcommissioningofnewplantsfaceslocaloppositionandwouldnotmaterialiseuntiltheendofthedecadeatleast.PoliticalsupportforoffshorewindSouthKorea1.https://energytracker.asia/the-future-of-energy-transition-under-s-koreas-new-president-yoon-suk-yeol/;https://climateactiontracker.org/countries/south-korea/2.https://www.offshorewind.biz/2021/02/05/south-korea-launches-eur-36-billion-offshore-wind-project/3.https://www.offshorewind.biz/2022/01/27/koreas-largest-offshore-wind-turbine-stands-complete/#:~:text=The%208%20MW%20offshore%20wind%20turbine%2C%20which%20has%20been%20developed,largest%20wind%20turbine%20to%20date.4.https://ember-climate.org/app/uploads/2022/02/Global-Electricity-Review-2021-South-Korea.pdf5.http://www.koreaherald.com/view.php?ud=20220203000944MarketstoWatch7677GWECGLOBALOFFSHOREWINDREPORT2022technologyandforeigninvestmentremainsstrong,thoughthechangingdynamicsaroundnuclearpolicycouldconstraingovernmentbudgetsfortheprocurementandgrid/portdevelopmentneededtoenablelarge-scaleoffshorewindgrowth.Industrialbenefitsandjobcreationlinkedtotheoffshorewindindustrymayalsocarrymorepoliticalcurrencyunderthenewadministration,comparedtothebenefitsfordecarbonisationanddisplacementoffossilfuels.Canthemarketcatchuptonationalambitions?The12GWoffshorewindtargetby2030isalargeleapfromthe188MWofoffshorewindcurrentlyinstalled(asoftheendof2021).MostprojectsunderdevelopmentarelocatedofftheprovincesofSouthJeolla,NorthJeolla,UlsanandIncheon,withsomeambitioninJejuIslandsandotherregions.Altogetheraround25GWofpotentialcapacitywhichcouldcomeonlineby2035hasbeenidentified,accordingtoAegirAnalytics.Theambitiousnationaltargetandstrongconditionsforfixed-bottomsites(especiallyoffSouthJeolla)andfloatingwind(especiallyoffUlsan),closetolargedemandcentres,hasdrawnheavyinterestfromlocalandforeignrenewablescompanies.TheseincludeØrsted,CorioGeneration,TotalEnergies,Shell,Equinor,EDP,AkerSolutions,CopenhagenInfrastructurePartnersandothers,manyofwhichhaveenteredintoMOUsorjointagreementswithlocalpartners.Similarly,offshorewindhasalsosparkedtheinterestofdomesticindustrialconglomeratessuchasSamsung,Hyundai,DoosanandSTXinrenewableenergyprojectdevelopmentandequipmentsupply.Meetingthe12GWby2030targetwouldrequireaspeedyclipofbuildoutofaround1.3GWonanannualbasisthroughtheremainderofthedecade.Buttheoffshorewindsectorhasbeenslowtotakeoff,duetoseveralfactorsdiscussedbelow.ResolvingcurrentbarriersonthegroundAdegreeofinvestmentriskisinherentintheextensivepermittingprocessforoffshorewind.AfteranoccupancypermitforpublicwatersisgrantedforaLIDARdevice(coveringa5-kmradiusofthedevice)andaroughlyone-yeardatacollectionperiod,developersmaysecureanElectricityBusinessLicense(EBL).Theythenhavea4-yearpreparationperiodtoobtainallthenecessarypermitsandPlannedoffshorewindandgridreinforcementinKorea,2020Source:MOTIE,Offshorewindpowergenerationplan,2020;IEA,KoreaElectricitySecurityReview.Offshore2.4GWJEJUISLANDOffshore8.2GWFloatingoffshorePhase1:1.4GWPhase2:4.6GWConnectionline(345kV)765kVline(existing)345kVline(new)345kVline(existing)345kVline(replacing)154Vline(replacing)OffshorewindsitesCollectorbus345kVsubstation154kVsubstationKOREAMarketstoWatchGWEC.NET78completeconstructionorrequestapermissionextension.ThepermitsarenumerousandincludeanEIA,occupancyimplementationplan,marinetrafficsafetyexamination,culturalheritagesurvey,onshorepermitsforonshorefacilities,constructionplanapprovalandmore.TheOffshoreWindCollaborationPlan(OWCP)issuedbygovernmentin2020aimstoestablisha“one-stopshop”permittingregimetoshortentimelines.ASpecialActtoestablishthisregimehasnotyetbeenpassed,partlyduetooppositionfromcommercialfishinginterests.ThefirstgenerationofoffshorewindprojectsinSouthKoreasawlongleadtimesfrom8-11yearsfromfirstpermittoCOD,largelyduetooppositionfromlocalresidentsandmembersofthefishingindustry.Stakeholdercomplaintshavepreviouslyledtocancellationsofprojects,suchasthe105MWHandong-PyeongdaeprojectonJejuIsland.Newmodelsforenhancedstakeholderparticipationandprofit-sharingareunderconsiderationbylocalgovernment,whiledemonstrationprojectsforcommunitysocioeconomicbenefitwillbeimportanttoallaylivelihoodconcerns.TheRPSscheme,whichmandateslargestate-ownedandprivatepowercompaniestoprocureaportionofpowerfromrenewables,makesRenewableEnergyCertificates(RECs)acommonformofremunerationforgeneration.RECsarebasedonacalculationofpowerproducedandstraight-linedistancetoshore,whichcanmultiplytheRECvalue.Thecalculationdoesnotconsiderwaterdepth,whichcanbeasignificantfactorfortheeconomicsofprojects.AlthoughtheRECweightingsystemwasrecentlyupdatedtoreflectthehigherdevelopmentcostsforoffshorewind,thetradingmarketstillpresentsuncertainty,andafinalRECweightingisnotavailableuntilconstructioniscompleted.Thatsaid,recenttradingpriceshavebeenbuoyedbytheincreasingnumberoflocalcompanieswhicharecommittingtotheRE100campaigntoprocure100%renewableenergyforpowerconsumptionby2050.Forinstance,spotpricesforRECsjumped45%fromJuly2021toJanuary2022.TAswell,theRPSstandardhasrecentlyraisedto12.5%for2022andwillincreaseto25%by2026.Gridinvestmentisamajorchallengeonthehorizonforenablinglargevolumesofoffshorewindinthisdecade.ReinforcementneedshavebeenhighlightedaroundNorthandSouthJeollaandUlsan,wherelarge-scaleoffshorewindcapacityisindevelopment.Theprospectofgridconstraints,aswellasthecurrentlackofpriorityforgridconnectionsforoffshorewind,presentssomedevelopmentrisk.ThisisespeciallythecaseasanEBLisnotgrantedtoprojectsuntilKEPCOhasconfirmedthattheprojectcanaccesssufficientgridcapacity.Proactivegridplanningandgridoperationinnovations,includinganapproachusing“promotionalzones”forrenewableenergytocustomisetransmissionplanning,couldeasethegridchallenge.7Intermsofsupplychain,SouthKoreadoeshavesignificantindustrialexperienceinsteel,shipbuildingandlogistics,whichcantranslatetooffshoreengineeringandsupplychaincompetencies.Butitsdomesticwindturbinesupplychainisstillatanearlystage.Whileadvancementsinturbinetechnologyhavebeenmade,itwillbeimportanttolowerlocalcontentandtradebarrierstoallowdeveloperstoaccessbest-in-classtechnologywithcostefficiency,whilestillencouragingtechnologylearningandtransferbetweenforeignandlocalcompanies.Lookingaheadto2030The2030ambitionsandmegaprojectsoffShinanandUlsanhaveputSouthKoreaonthemapforglobaloffshorewinddevelopment.Bytheendofthedecade,thecountryissettoemergeasthetopfloatingoffshorewindmarketinEastAsia.GWECMarketIntelligenceforecastsatotalof6.5GWoffixed-bottomoffshorewindand3.6GWoffloatingwindwillbecommissionedinSouthKoreaby2030.Withlessthaneightyearstogotomeeta12GWtarget,itiscriticalthatthenewadministrationworkswithlocalgovernments,industryandotherstakeholderstoresolvethechallengesaroundremuneration,permitting,localoppositionandgridinvestment.ThiscaneasethebarriersforoffshorewinddevelopmentinKoreaandpavethewayforindustrytodeliveronnationalambitionsforindustrialgrowthanddecarbonisation.6.https://www.mayerbrown.com/-/media/files/perspectives-events/publications/2022/03/offshore-wind-in-south-korea--the-path-ahead.pdf7.https://iea.blob.core.windows.net/assets/a8539b34-fb1b-42cc-ba09-e08637a59bc1/KoreaElectricitySecurityReview.pdfMarketstoWatch79GWECGLOBALOFFSHOREWINDREPORT2022Chinainstalleditsfirstoffshoreturbine,a1.5MWdirectdrivemachine,intheBohaiSeain2007.China’sfirstcommercialoffshoreproject,DonghaiBridgeoffshorewindfarm,wascommissionedin2010.Themarket,however,wasnotreadytotakeoffuntilthefirstoffshoreFeed-in-Tariff(FiT)schemewasreleasedbytheNationalEnergyAdministration(NEA)in2014andtheManagementMeasuresforOffshoreWindPowerDevelopmentandConstructionwasjointlyreleasedbyNEAandtheStateOceanicAdministration(SOA)in2016,whichresolvedchallengesbetweenvariousgovernmentbodiesandstakeholders.Offshorewindenjoyedfastdevelopmentduringthe13thFive-YearPeriod(2016-2020).Chinapassedthe1GWmilestoneforoffshorewindinstallationsattheendof2015andbecametheworld’slargestoffshorewindmarketintermsofnewinstallationsin2018.By2020,totaloffshoreinstallationsreachedamilestoneof10GW.ExplosiveoffshoregrowthdrivenbypolicychangeIn2021,47.5GWofwindcapacitywasgrid-connectedinChina,ofwhich16.9GWisoffshorewind.ThismadeChinatheleadingoffshorewindmarketgloballyandsetanewrecordinglobaloffshorewindinstallationsinasingleyear.TheChineseoffshorewindindustryhadpreparedforthismomentfortwoandahalfyears,withenormousinvestmentsdedicatedtobuildingthelocalsupplychain,balanceofplant,infrastructureandefficiencyinoffshoreturbineinstallations.ThehugespikeininstallationswasdrivenbyanewpolicyreleasedinMay2019bytheNationalDevelopmentandReformCommission(NRDC),presentingaclearroadmaptowardsaphase-outinsubsidiesforbothonshoreandoffshorewind.Foroffshorewind,projectsalreadyapprovedbefore2019wouldnotreceivetheFiTiftheyarenotfullygrid-connectedbeforetheendof2021.Startingfrom1January2022,thesubsidyforChinaChina’s14thFive-YearRenewableDevelopmentPlanQinghaiNeiMengguHunanGansuGiantonshorewind/solarenergybasesGiantintegratedenrgybases(hydropower/wind/solar)OffshorewindbasesSource:NDRC,NEA,2021MarketstoWatchGWEC.NEToffshorewindfromthecentralgovernmentwillbecompletelyterminated.AtGWEC’sGlobalOffshoreWindSummit–China2019,largelocaldevelopersandturbineOEMswerealreadydiscussinghowtoaddressthebottlenecksthroughouttheoffshorewindsupplychain,suchaslargeblades,mainbearingsandoffshorewindinstallationvessels,tomeetthe2021deadline.AstronglocalsupplychaintobackupgrowthChinaistheworld’slargestwindturbinemanufacturinghub,accountingfor60-65%ofglobaloutputsofturbinenacelleandkeycomponentsincludinggearboxes,generatorsandblades.ThereareeightestablishedoffshorewindturbinemanufacturersinChinaasof2020,withanothertwoOEMsannouncedtoentertheoffshoresectorin2021.Assemblyfactoriesforoffshoreturbineshavebeenbuiltincoastalprovincesthroughoutthepastyears.CitiessuchasYangjiang(GuangdongProvince)orYancheng(JiangsuProvince)havemadethemselvesintobasesforoffshorewindfarmmanufacturingwithtailor-madeoffshorewindportsavailable.WithrecentlyinvestedoffshorewindturbineassemblyfacilitieslocatedinZhejiang,Shandong,LiaoningandHainanProvincescomingonlineinthenexttwoyears,theannualoffshorewindturbinemanufacturingcapacityinChinaislikelytoreach20GWfromtoday’s16GW.ThelasttwoyearsalsowitnessedhowquicklyChineselocaldevelopersandoffshoreEPCcontractorsmobilisedinstallationOffshorewinddevelopmentinChina,2007-2021(GW)020072008TotalInstallationsAnnualInstallations200920102011201220132014201520162017201820192020202124681012141618302530151050Source:GWEC,CWEA,NEA,March2022MarketstoWatch80GWECGLOBALOFFSHOREWINDREPORT2022vesselstomeetthe2021grid-connectiondeadline.AccordingtoGWECMarketIntelligence’sGlobalOffshoreWindTurbineInstallationVesselDatabase2020,Chinahad24jack-upvessels/bargesand10+heavyliftvesselsforoffshorewindturbineinstallationpurpose.Oneyearlater,40jack-upvessels/barges,ofwhichmorethan10werenewlyconstructedanddelivered,and30heavyliftvesselswereidentifiedinChina.Inaddition,atleast10jack-upinstallationvesselsareunderconstruction,ofwhich7willbecapableofinstalling10MW+offshorewindturbines.Asidefromthesenewlybuiltturbineinstallationvessels,somedrillingplatformsandsemi-submersiblevesselswereupgradedandconvertedforoffshorewindconstructionpurposes.AhandfulofforeignvesselsfromEurope,MiddleEastandSingaporehavealsobeentransportedandleasedtoChinatosupportthefinaloffshorewindinstallationrushin2021.ChinainpolepositionforglobaloffshorewindpowergrowthLookingahead,duringthecurrent(14th)Five-YearPeriod(2021-2025),Chinawillconstructlarge-scaleoffshorebases(10GW-level)intheeasterncoastalareas.ThefiveselectedoffshorebasesareShandongPeninsula,YangtzeRiverDelta,SouthernFujian,EasternGuangdongandBeibuGulf.Summingupthetargetsreleasedbyallcoastalprovincesintheir14thFive-YearPlans,Chinawilladdatotalof40-50GWofoffshorecapacityduringthe2021to2025period.Inaddition,duringthisperiod,theChinesegovernmentplanstoprovidesupportonemergingtechnologiesanddemonstrationprojects,suchasdeep-waterwindfarmsandflexibleDCtransmission,digitalisedO&Mforoffshorewind,renewablehydrogen,energyislandsandintegratedenergysolutions.From2022,thecentralgovernmentwillceasesubsidiesforoffshorewind,butasmallportionoffinancialsupportfromprovincialauthoritiesisstillavailableinprovinceslikeGuangdong,ShandongandZhejiangforthenext3-4yearstosupportthelocaloffshorewindindustrytoreachgrid-parityby2025.Althoughannualoffshorewindinstallationsareexpectedtoslowdownin2022and2023afterarecordyear,withfurthertechnologyinnovationandcostreductions,themarketislikelytobouncebackfrom2024withnewinstallationspotentiallytoreach10GWtheyearafter.GWECMarketIntelligencepredicts98GWofnewoffshorewindcapacitywillbebuiltinChinain2022-2031,contributingto31%oftheglobaloffshorewindadditionsinthisperiod.Chinawilladdatotalof40-50GWofoffshorecapacityduringthe2021to2025period.MarketstoWatch81GWEC.NET82IrelandColombiaAustraliaThePhilippinesDevelopmentstageAwardingthefirstbatchofMaritimeAreaConsent(MAC)applicationsfromasetofsevenqualifiedoffshorerenewableenergyprojectswouldenablethefirstOffshoreRenewableEnergySupportScheme(ORESS1)auctiontoopeninQ42022.ConsultationfortheauctionopenedinOctober2021.InSeptember2021atenderwaslaunchedtocreateaStrategicEnvironmentalAssessmentforthenewOffshoreRenewableEnergyDevelopmentPlan(OREDPII).Atleast15floatingoffshorewindprojectsofmorethan7GWcapacityareatdifferentstagesofearlydevelopment.TheRosslareEuroportwillbeupgradedasanOffshoreRenewableEnergyHubwithEUR200millionininvestment.PoliticalsupportA5GWtargetby2030hasbeensetunderthe‘ProgrammeforGovernment,’whichalsoplanstotap~30GWfloatingoffshorewindinAtlanticwatersinthelongterm.TheMaritimeAreaPlanningBill2021simplifiedpermittingprocessesforoffshorewinddevelopment,followedbytheDepartmentofTransportsettingoutthestrategyforcommercialportsdevelopment.AMaritimeAreaRegulatoryAuthority(MARA)9willbeestablishedin2023forassessmentandconsentsforoffshorewindprojects.ChallengeLackofavailabilityofindigenousandeconomicallysustainablelocalsupplychainincludingsuitableportinfrastructure.Needtospeeduptheleaseandlicensingprocess,establishclearregulationsaroundgridconnectionandstreamlineplanningandconsenting.NextMilestoneInvestmentplanningisrequiredtogrowthelocalsupplychainandenhancegridcapacity.SettingapolicyframeworkwhichcanaddresstheanticipatedimpactsofcurrentsupplychainchallengesonLCOEandsupplychaindevelopmentDevelopmentstageAnMoUhasbeensignedtobuildthefirstfarmof350MWcapacityinBarranquillabydeveloperCopenhagenInfrastructurePartnersandPublicLightingofBarranquillatopowergreenammoniaproduction.Anotherproject,VientosAlisios,isbeingdevelopedbyBlueFloatEnergyforwhichpre-feasibilitystatusisgrantedandgridconnectionsecured.AccordingtotheOffshoreWindRoadmapforColombia,thereispotentialforinstallingalmost50GWofcapacitywith~27GWforfixed-bottomand21GWforfloatingfoundations.PoliticalsupportThePresidentofColombiahasofficiallylaunchedtheoffshorewindroadmapandpublishedaproposalofregulationsfortheallocationofseabedforpublicconsultation.Thefirstallocationroundwillbecalledoncetheproposalisenacted.Thereisanambitiousplantoincreasetheshareofnon-conventionalrenewableenergyto17%by2030.TheColombiangovernmenthasalsopledgedtohalveGHGemissionsby2030aspartofthelong-termstrategytoreachnetzeroby2050.ChallengeMedium-termchallengeshinderoffshorewindprojectdevelopmentsuchasonshoregridconnectiontimelines,logisticalissues,needforportupgradesandoperationplanning.NextmilestoneThereisaneedtospeeduptheprocessofissuingrelevantexecutiveregulationsasdeliberatedundertheroadmap.Thegovernmentshouldstartwithestablishingshort-termtolong-termtargets,whichcanstrategicallysupporttheNationalHydrogenStrategyandRoadmap.DevelopmentstageTheBassStraitoffGippslandinVictoriahasbeenidentifiedasthefirstpriorityareatobeassessedforoffshorewindsuitability.Progresscontinuesonthe2.2GWStaroftheSouthoffshorewindfarmastheworkonEnvironmentalImpactStatementandtheEnvironmentEffectsStatementhasstarted.Thereare20+projectsatdifferentstagesofearlydevelopment,includingtwofloatingprojects8bySpain-basedBlueFloatEnergyandAustralia’sEnergyEstate.Also,OceanexEnergyhassharedaplanforfourfloatingoffshorewindprojects.PoliticalsupportThenewlyelectedprimeministerhasastrongpositiononrenewablesforrespondingtotheclimateemergencyandsupportsanewtargettoreducecarbonemissionsby43%by2030andachievenetzeroby2035,ratherthan2050.TheVictoriangovernmentseta9GWtargetby2040,withfirstinstallationin2028.TheOffshoreElectricityInfrastructureBillintroducedin2021issettoallowseabedleasingbymid-2022.ThereisapublicconsultationondraftregulationsfortheOffshoreElectricityInfrastructureFramework.ChallengeTherehasbeenapatchytrackrecordonpolicymeasurestobackrenewableenergygeneration,especiallywithrespecttolong-termcertaintyformeasuressuchasaFeed-in-Tariffschemeandgridinfrastructureavailability.NextmilestoneWithvastoffshorewindpotentialof>2TW10andambitioustargets,formationofthepolicyandregulatoryframeworkisnowrequired.Acombinednationaloffshorewindtargetcouldfirmuppoliticalcommitment.DevelopmentstageAnOffshoreWindRoadmapbytheDepartmentofEnergy(DOE)andWorldBankGroupshowspotentialtoinstall21GWby2040.TheDOEhasissuedaclearancetoundertakeasystemimpactstudywiththeNationalGridCorporationformorethan15projectsandawardedexclusiverightstodevelopthefirstoffshorewindprojectstoTricontiWindkraftGroup.TheDOEalsohasanagreementwithIberdrolatoplanfiveprojectsof3.5GWtotalcapacity.AnexclusivityrighthasbeensecuredfortheBulalacaositedevelopmentfor1.2GWbyBlueCircleandCleanTechGlobalRenewables,Inc.PetroGreenEnergyCorporation,asubsidiaryofoilandgascompanyPetroEnergy,isplanningthreeGW-scalefarms.PoliticalsupportThecountryhasatargetofa35%shareofrenewableenergyinthepowergenerationmixby2030anda50%shareby2040,translatingto92GWofrenewableenergycapacity,asperthePhilippineEnergyPlan(PEP)2020-2040.ChallengeAdrawn-outpermittingandleasingprocess,whichisnowbeingaddressedbyavirtualone-stopshopscheme.Transmissionbottlenecksalsorequireplanningandinvestment.NextmilestoneThereishugeuntappedpotentialof170GW.Settingstrongpolicycommitmentswithtargets,improvedpermittingandleasingprocessandtransmissionsystemupgradescanmakethecountryanoffshorewindfrontrunnerinSoutheastAsia.GWECMarketIntelligenceismonitoringactivitiesin46countriesonaregularbasistodocumenttheopportunitiesandprogressoftakingwindglobalaswellassupportinggovernmentsindevelopingappropriatepolicyframeworks.Thefourselectedcountries–Ireland,Colombia,AustraliaandthePhilippines–representmarketswithhighoffshorewindpotentialbutvaryingpoliticalsupportandtargetstodate.Still,inallfourcountriesthereisanincreasingawarenessthatoffshorewindcanprovideascalable,cost-competitiveandefficientsolutionforrenewableenergy.Exploringnewmarkets8HunterCoastfloatingwindfarm(1.4GW)andWollongongOffshoreWindProject(1.6GW)foraluminiumsmelterandproducegreenhydrogen9Currently,MaritimeAreaConsent(MAC)togranttheconsentsforthefirstphaseofoffshorewindprojects.10https://www.afr.com/companies/energy/australia-s-offshore-wind-sector-primed-for-lift-off-20220114-p59o9v#:~:text=Australia’s%20offshore%20wind%20resources%20could,the%20country’s%20entire%20electricity%20generation.MarketstoWatchGWECGLOBALOFFSHOREWINDREPORT2022MARKETOUTLOOK2022-203183GWEC.NET842021sawcommitmentstonetzerogatherglobalmomentumatCOP26.CoupledwithrenewedpolicyurgencyforachievingenergyindependencefromRussianoilandgas-andfossilfuelvolatilityingeneral-triggeredbyRussia’sinvasionofUkraine,theglobaloffshorewindmarketoutlookinthemediumandlong-termlooksextremelypromising.Withanexpectedcompoundaverageannualgrowthrateof6.3%until2026and13.9%uptothebeginningofnextdecade,newinstallationsareexpectedtosailpastthemilestonesof30GWin2027and50GWbytheendofthisdecade.GlobalOffshoreMarketOutlookto2031211051407290551343625362339484607654850285893870850920CAGR+6.3%CAGR+13.9%EuropeChinaAsiaexChinaNorthAmericaOther20212022e2023e2025e2026e2027e2024e2028e2029e2030e2031e11400157620002000152494518818881538.8156244004000400040004670120001763840004350471832648000600040001690033173174495229751000073802750110001048939001100015048525012000232506420120002650071001200029350Newoffshoreinstallations,global(MW)CompoundAnnualGrowthRate.Source:GWECMarketIntelligence,June2022MarketOutlook2022-2031GWECGLOBALOFFSHOREWINDREPORT2022Thisoutlookreflectscurrentdeclarednationalandregionaltargets.Itishighlylikelythatthesetargetswillincreasefurther.Ontheotherhand,thereiscurrentlyanimplementationgapbetweendeclaredtargetsandtherateofannualinstallations.GWECMarketIntelligenceexpectsthatover315GWofnewoffshorewindcapacitywillbeaddedoverthenextdecade(2022-2031),bringingthetotaloffshorewindcapacityto370GWbytheendof2031.29%ofthisnewvolumewillbeinstalledinthefirsthalfofthedecade(2022-2026)withtheremainingtobeconnectedinthelatterhalf(2027-2031).Thevolumeofannualoffshorewindinstallationsisexpectedtomorethandoublefrom21.1GWin2021to54.9GWin2031,bringingoffshore’sshareofglobalnewinstallationsfrom23%in2021to32%by2031.AlthoughAsiawillreplaceEuropeastheworld’slargestregionaloffshorewindmarketbycumulativeinstallationsbytheendof2022,Europeisexpectedtorecapturethistitlefrom2031.Toensureenergysecurity,whileachievingclimatechangetargets,Europeislikelytocontinueincreasingannualoffshorewindinstallations,surpassingthemilestonesof10GWin2026and25GWin2030.NorthAmericawillremainthethirdlargestoffshorewindmarketby2031,followedbythePacificregionandLatinAmerica.Inthenearterm(2021-2024),themajorityofgrowthoutsideEuropewillcomefromAsia,primarilyChinaandTaiwan.ThecontributionfromNorthAmerica(mainlytheUS)willgrowinimportancefrom2025onwardswhileasizeablevolumeisunlikelytoemergefromLatinAmerica(Brazil)andPacificregion(Australia)untiltheendofthisdecade.Ournear-termoffshorewindmarketoutlookwasbuiltusingabottom-upapproachandisbasedonGWECMarketIntelligence’sglobaloffshorewindprojectdatabase,whichcoversprojectscurrentlyunderconstruction,globalauctionresultsandannouncedoffshorewindtendersworldwide.Forthemedium-termmarketoutlook,asidefromexistingprojectpipelines,atop-downapproachhasalsobeenused,whichtakesintoaccountexistingpolicy,supportschemes,offshorewindauctionplansandmedium/long-termnationalandregionaloffshorewindtargets.MarketOutlook2022-203185GWEC.NET86Theworld’sfirstoffshorewindprojectwasinstalledinDenmarkin1991,makingEuropethebirthplaceoftheoffshorewindindustry.Throughthreedecadesofdevelopment,fixed-bottomoffshorewindhasbecomeoneofthemostcost-competitiveenergysourcesinEuropewithamatureoffshorewindsupplychainestablishedincountriesneighbouringtheNorthSeaandtheBalticSea.In2009,Norwaycommissionedtheworld’sfirstfloatingoffshorewindturbine.Asoftoday,thecontinentremainsthetechnologyhubforfloatingwindturbinesandfoundations.Europeremainstheworld’slargestregionalmarketintermsoftotaloffshorewindinstallationsasoftheendof2021,althoughtheregionalreadylostitsleadingpositiontoAsiainnewinstallationsin2020.Lookingatpotentialgrowth,GWECMarketIntelligencehasalreadypredictedthatEuropewillmaintainitsdoubledigitalgrowthrateinthisdecade,as:1)fixed-bottomoffshorewindhasbecomethemostcompetitiveelectricitygenerationtechnologyafteronshorewindandsolarPV–butwithconsiderableEurope3317317449527380104891504817638232502650029350297520212022e2023e2025e2026e2027e2024e2028e2029e2030e2031eTheUKGermanyDenmarkNetherlandsFranceBelgiumPolandIrelandNorwayRestofEurope3.63926052317146217501529166121434596132045004500500055006500500030003000200020005600100012503000480010007005005003008504452503509926115344571832.28848077034271710102834526737570027070072070010009809587001000700100015001500300030003000200020002000300015002850124012001200236814981200150045004000200018001400CAGR+25.9%CAGR+22.8%Newoffshoreinstallations,Europe(MW)CompoundAnnualGrowthRate.Source:GWECMarketIntelligence,June2022MarketOutlook2022-203187GWECGLOBALOFFSHOREWINDREPORT2022advantagesintermsofbeingabletobedeployedatscale,2)progresscontinuesinthecommercialisationoffloatingwindthatwillunlockpotentialindeepwater,3.)TheEuropeanCommissionpresenteditsoffshorerenewableenergystrategyaspartofEUGreenDealinNovember2020,settingatargetof300GWofoffshorewindby2050fortheEU,whichmakesoffshorewindastrategicenergysourceforachievingits2050netzerotarget,4)Europe’sPower-to-Xambitionsofferfurthermarketgrowthopportunitiesforoffshorewind.FollowingRussia’sinvasionofUkraine,theEuropeanCommissionreleasedtheREPowerEUplantomakeEuropeindependentfromRussianfossilfuelswellbefore2030,whichGWECbelieveswillacceleratetheoffshorewindandrenewablehydrogendeploymentacrosstheentireconvenient.TheEsbjergDeclarationsignedbyGermany,Denmark,BelgiumandtheNetherlandsinMay2022tojointlydeveloptheNorthSeaasaGreenPowerPlantofEurope,providedafurthermilestoneforoffshorewindacceleration.However,accordingtoGWECMarketIntelligence’slatestmarketoutlook,marketgrowthinEuropeinthenear-term(2022-2024)isexpectedtoberelativelyslow,withaverageannualinstallationsstayingaround3.7GW.ThisismainlyduetothelowerlevelofactivitiesinestablishedmarketssuchasGermany,DenmarkandBelgium.However,theEuropeanoffshoremarketislikelytoacceleratefrom2025onwardswhenprojectsfromtheGermanRound1AuctionwillcomeonlineandutilityscaleprojectsarelikelytobecomematerialinnewmarketssuchasFranceandPoland.WithmoreprojectsbeingreleasedfromtheannouncedauctionplansinbothmatureandemergingmarketsinEurope,newinstallationsintheregionarelikelytodoublein2027andpotentiallyquadruplein2031comparedwith2025.Lookingatthetotalcapacitytobeaddedinthenexttenyears,79%willbebuiltinthesecondhalfofthedecade(2027-2031).TheUKTheUKhasbeentheoffshorewindmarketleaderinEuropesince2009.AlthoughitlostitspolepositiontoChinabyendof2021,progressmadeinthepast12monthsshowsthatoffshorewindgrowthislikelytoregainstrongtraction.InJuly2021,CrownEstateselectedthreefloatingwinddemonstrationprojectsthroughaleasingopportunityforearlycommercial-scalefloatingwindprojectsintheCelticSea.TheeligibilitywindowfortheRound4CfDauction,aimingtosupportupto12GWofrenewableenergyprojects,openedon13December2021withresultsexpectedtobeannouncedthissummer.InFebruary2022,theUKgovernmentannounceditwouldholdyearlyCfDauctionsfrom2023onwardstoscaleupthecountry’ssupplyofrenewableenergy.Inthesamequarter,CrownEstateScotlandannouncedtheoutcomeoftheScotwindseabedleasingroundlaunchedlastsummer:17projects,totalling25GWUnit:GW202720302035204020452050EU≥60≥300UK50Germany3040≥70Netherlands22.2Denmark12.9Belgium5.7France1840Poland10.9Norway30Ireland530Spain3EsbjergDeclaration≥65≥150ThelatestoffshorewindtargetsinEuropeMarketOutlook2022-2031Eitherinoperationorunderdevelopmentby2027.CountriessetjointtargetthroughEsbjergDeclarationincludeGermany,Denmark,BelgiumandtheNetherlandsSource:GWECMarketIntelligence,June202GWEC.NET88including15GWoffloatingwind,wereawardedleases.Inaddition,theCrownEstatehascompletedthesecondphaseofitsongoingengagementwiththemarketandstakeholdersonplansforupto4GWoffloatingwindleasingintheCelticSea.ToboosttheUK’senergysecurity,PrimeMinisterBorisJohnsonpresentedaplaninApril2022toincreasetheUK’s2030offshorewindtargetfrom40GWto50GW,5GWofwhichistargetedforfloatingwind.ThisisthesecondtimetheUKincreasedtheoffshorewindtargetinthelasttwoyears.GermanyGermanyusedtobetheworld’ssecondlargestoffshorewindmarketintotalinstallations,butwasovertakenbyChinain2020afterunfavourablemarketconditionsandalackofmid-termvisibilitysloweddevelopment.Thecountryonlyawardedthreesmall“zero-subsidy”offshorewindprojects,totalling958MWaftertheRound2offshorewindauctionswerelaunchedin2018.However,morefavourableoffshorewindlegislationhasbeenadoptedinthepasttwoyears.The2020amendmentoftheOffshoreWindAct(WindSeeG)increasedthecountry’soffshorewindtargetfrom15GWto20GWby2030andsetatargetof40GWofinstalledoffshorecapacityby2040.TheGermangovernmentthenchangeditsoffshorewindlegislationinApril2022throughthe“EasterPackage”,andsetatargetthatrequires30GWofoperationaloffshorewindby2030,40GWby2035,andatleast70GWby2045.Additionally,toreplacefossilfuelsfromRussia,GermanysignedacooperationagreementonoffshorewinddevelopmentandgreenhydrogenwiththreeotherNorthSeacountries(Denmark,BelgiumandtheNetherlands)throughtheEsbjergDeclaration.ThekeyforitsoffshorewindsuccessisclearbutitreliesontheGermany’sFederalMaritimeandHydrographicAgency(BundesamtfürSeeschifffahrtundHydrography-BSH)speedingupthepermittingandquicklyopeningupadditionaloffshorewindtenders,andensuringattractivemarketconditions.DenmarkInJune2020theDanishgovernmentapprovedtwo“energyislands,”oneintheNorthSeaandoneintheBalticSea.ThefullpotentialfortheNorthSeaenergyislandis10GW.InDecember2021,thewinnerofthe1GWThorprojectwasdecidedbyalotterydraw,asmorethanonebidderofferedtobuildtheThoroffshorewindfarmfortheminimumpriceofDKK0.01/kWh.Inthesamemonththegovernmentagreedtoaddupto3GWofnewoffshorewindcapacitytobedevelopedbefore2030aspartoftheFinanceAct2022.ToensureenergyindependencefromRussianoilandgas,DenmarkhostedthreeotherNorthSeacountriesinMayattheEsbjergOffshoreWindSummit,fromwhereajoint150GWby2050offshorewindtargetwassignedthroughtheso-calledEsbjergdeclaration.InJune2022,thegovernmentreleasedtheproposaltoraiseits2030offshorewindtargetby45%to12.9GW.NetherlandsTheNetherlandsisthefourthlargestoffshorewindmarketintheworld.LastNovember,theDutchgovernmentincreasedits2030offshorewindtargetfrom11.5GWto22.2GW,aimingtomeettheEU’scurrentgoalofreducingCO2emissionsby55%by2030comparedtothe1990levels.InMarch2022,thegovernmentdesignatedthreenewareasandconfirmedtwopreviouslydesignatedareasintheNorthSea,enablingfurther10.7GWofoffshorewindtobebuiltbytheendofthisBelgium3%France7%Netherlands13%Denmark10%Germany15%UnitedKingdom27%RestofEurope12%Norway2%Ireland4%Poland8%140.8GWTotaladdedbetween2022and2031Source:GWECMarketIntelligence,June2022MarketOutlook2022-2031decade.Followingtherecentgeopoliticalchallenge,thecountrysignedtheEsbjergDeclarationwiththreeotherNorthSeacountries.BelgiumBelgiumistheworld’ssixthlargestoffshorewindmarketintotaloffshorewindcapacity.AccordingtotheMarineSpatialPlan2020-2026,releasedin2020,thecountryplanstogrowitsoperationaloffshorewindcapacityfromthecurrent2.2GWto4.4GWby2030throughthedevelopmentofthePrincessElisabethZone,whichisBelgium’ssecondoffshorewindarea.Thegovernmentisnowworkingonanamendmenttolegislativeframeworkforhavingupto3.5GWofadditionaloffshorewindcapacityatthiszone.Oncegridconnectedby2030,Belgium’stotaloffshorewindcapacitywillreach5.76GW.FollowingtheREPowerEUplan,theMinisterofEnergycalledforBelgiumtoraiseits2030offshorewindtargetto8GW.ThecountryalsojointlysignedtheEsbjergDeclarationinMay.FranceThereisonly2MWofoffshorewindpowerinstalledinFranceasof2021,butaround5.5GWofoffshorewindcapacity,including0.9GWfloatingwind,iseitherunderconstructionorsubjecttoanongoingtenderingprocedure.AccordingtotheMultiannualEnergyProgramme(Programmationpluriannuelledel’énergie-PPE)releasedbyFrenchgovernmentin2020,upto8.75GWofoffshorewindcapacitywillbetenderedbetween2020and2028.Thelatestplanshowsthatthegovernmentaimstoallocatearound2GWofoffshorewindcapacityperyearfrom2025toreach20GWofauctionedoffshorecapacityby2030and18GWofoperationaloffshorewindcapacityby2035.Toreachits2050netzerotarget,PresidentEmmanuelMacronannouncedinFebruary2022thatFrancewillhavearound40GWofoffshorewindcapacityinoperationby2050.PolandPoland’sCouncilofMinistersadoptedadraftbillsupportingthedevelopmentofoffshorewindenergyintheBalticSeainlate2020.Thedraftbill,whichwassignedintolawbythepresidentinJanuary2021,allowsfor10.9GWofoffshorewindcapacitytobeeitheroperationalorunderdevelopmentby2027.AstheendofJune2021,ThePolishEnergyRegulatoryOffice(ERO)hasawardedaCfDtosevenoffshorewindprojects,totalling5.9GW,thesamevolumeaswasplannedintheOffshoreAct.Thesecondphaseofdevelopmentwillincludetwoauctions,thefirstin2025MarketOutlook2022-203189GWECGLOBALOFFSHOREWINDREPORT2022GWEC.NETandthesecondin2027,eachwith2.5GWofcapacity.Tosupportfurthergrowth,theMinistryofInfrastructurelaunchedaprocedureforgrantingconcessionsforelevenoffshorewindareasinQ4of2021.NorwayInJune2020,Norwayopenedupforfull-scalefloatingandbottomfixedoffshorewinddevelopment,totallingupto4.5GW,andalloweddeveloperstoapplyforprojectlicensesfromJanuary2021.AccordingtotheMinistryofPetroleumandEnergy,the3GWoffixed-bottomcapacityattheSørligeNordsjøIIzonewillbeauctionedintwo1.5GWphases.Theauctionforthefirst1.5GWofcapacityisexpectedtotakeplaceduring2022.Duetohigherrisk,thegovernmenthasproposedthesitesintheUtsiraNordleaseareaforfloatingwindtobeselectedbasedonqualitativecriteria,ratherthanauction.InMay2022,thenewlyelectedgovernmentlaunchedalarge-scalegreeninvestmentplanaimedatallocatingseaareasfordeveloping30GWofoffshorewindcapacityby2040.Thenextroundofawardinglicensesforoffshorewindinnewareasisexpectedtolaunchin2025.IrelandAccordingtoIreland’sClimateActionPlan,thecountryaimstohave5GWoffshorewindby2030withalong-termplantotapintoitsfloatingwindpotentialofatleast30GWindeeperwaters.LastDecember,IrelandawardedcontractsforthecreationofaStrategicEnvironmentalAssessment(SEA)andanAppropriateAssessment(AA)forIreland’snewOffshoreRenewableEnergyDevelopmentPlan(OREDPII).TheOREDPII,accommodatedbythenewMarinePlanningBillthatwaspassedlastJuly,establishesaframeworkforthesustainabledevelopmentofIreland’soffshorerenewableenergyprojects.Sevenoffshorewindprojects,totallingmorethan3GW,havebeeninvitedtoapplyforMaritimeAreaConsents(MACs)withthefirstofwhichexpectedtobeissuedinthesecondhalfin2022.SpainSpainonlyhas10MWofoffshorewindcapacityinstalledasoftoday,butlastDecemberSpain’sCouncilofMinistersapprovedtheRoadmapfortheDevelopmentofOffshoreWindandMarineEnergythatwillseethecountrytoreachupto3GWofoffshorewindby2030.Withmorethan5GWoffloatingwindprojectsatdifferentstagesofdevelopmentatpresent,thecountryisexpectedtobecomeoneofthetopfivefloatingwindmarketsby2030.MarketOutlook2022-20319091GWECGLOBALOFFSHOREWINDREPORT2022AlthoughthefirstoffshorewindprojectbuiltinAsiahasbeenspinningfornearlytwodecades,thisregionwasquietonoffshorewinddevelopmentuntil2018whenChinaovertooktheUKastheworld’stopmarketinnewinstallations.2020sawAsiareplacingEuropeastheleadingregionaloffshorewindmarketinnewinstallationsforthefirsttime.DespitenewinstallationsinthisregionlastyearbeingfivetimesgreaterthanthatinEurope,Asiaisstillonlythesecondlargestoffshorewindmarketincumulativeinstallationswithitsglobalmarketshare0.9%lowerthanEurope.OurlatestmarketoutlookshowsthatChinawillcontinuetoplaythepredominateroleinthisregionintheAsia20212022e2023e2025e2026e2027e2024e2028e2029e2030e2031eChinaJapanSouthKoreaTaiwanVietnamIndiaRestofAsia1778858817539956213264137501667014900172501842019100CAGR-5%CAGR+6.8%169007794000137360001092800064210000196411000150011000100015001200087080010001500120001300150015001200100012000132015001500100012000100012501500100060050060050050030030050017030045043043095%68%80%84%75%80%74%72%70%65%63%ShareofChineseoffshoremarket10914817500350400500600500Newoffshoreinstallations,Asia(MW)CompoundAnnualGrowthRate.Source:GWECMarketIntelligence,June2022MarketOutlook2022-2031GWEC.NET92nextfiveyears(2022-2026),althoughitsmarketsharein2022isexpectedtodropto68%afteranoutstandingyearin2021.TaiwanispredictedtobethelargestoffshoremarketinAsiaafterChinainnewinstallationsinthesameperiod.GWECMarketIntelligencebelievesthatthemarketwillbecomemorediversifiedinthesecondhalfofthisforecastperiodasmoreutility-scaleoffshorewindprojectsareexpectedtocomeonline.ThesewillbebasedinJapan,SouthKoreaandVietnamfrom2027onwardsandthefirstbatchesofoffshorewindprojectsarealsolikelytotakeplaceinnewmarketssuchasIndiaandthePhilippines.Asaresult,China’smarketshareinthisregionwilldeclinefrom80%in2026to63%in2031.Intotal,63%ofthepredictedoffshorewindforthisregionistobebuiltin2027-2031.Althoughstablegrowthisexpectedinthisperiod,annualinstallationsintheregionareunlikelytoexceedthe2021recorduntil2030.ThetopfivemarketsintotalnewadditionsinthisregioninthenexttenyearswillbeChina,Taiwan,SouthKorea,VietnamandJapan.Chinais,todate,themostmatureoffshorewindmarketoutsideEurope.Drivenbytheinstallationrushthatstartedinthesecondhalfof2019,thedomesticoffshorewindsupplychainandinfrastructurehavebuiltupquicklyalongChina’seastandsoutheastcoast.WhileprogressandsupplychaincapacitybuildingactivitieshavecontinuedinTaiwaninthepasttwoyears,therestofthemarketsarestillattheearlystageofdevelopmentandmostofthemfacethechallengeofdevelopingalocalsupplychainandbuildingthenecessarycompetenciesandworkforces.BasedontheinvestmentplansandpartnershipsrecentlyannouncedbyEuropeanplayersinSouthKoreaandJapan,similarsuccessislikelytobeduplicatedinthesetwomarkets.Tounlockthepotentialofoffshorewindandfurtherlowercostintheregion,regionalcooperationinsupplychaindevelopmentisakeyobjective.GWECMarketIntelligencepredictsthatAsiawillreplaceEuropeasthelargestregionaloffshorewindmarketintotalinstallationsfrom2022andthenretainthatpositionthroughtotheendof2030.However,withstronggrowthexpectedtotakeplaceinEuropefrom2029onwards,Europeislikelytorecapturethistitlebytheendof2031,thoughthegapbetweenthetworegionswillbemarginal.ChinaChinagridconnectednearly17GWofnewoffshorewindin2021,overtakingtheUKastheworld’sNumberOneoffshoremarketincumulativeinstallation.However,followinglastyear’sastonishinglevelofgrowth,asharpdropinnewoffshoreinstallationsinChinain2022isexpected,primarilyduetotheendofsubsidiesfromcentralgovernmentfrom2022.BeforeChineseoffshorewindreachesgridparityin2024/2025,thepaceofoffshorewindgrowthinChinawilltosomeextentbedrivenbyfinancialsupportprovidedbyprovincialgovernments,likeGuangdong,ZhejiangandShandong.Consideringthetotalofoffshorewindtargetsannouncedbycoastalprovinces,–eitherby2025or2030–hasalreadypassed150GW,GWECMarketIntelligencepredictsthataverageannualoffshorewindinstallationsinChinabetween2025and2031willsurpass10GW,whichwillhelpthecountrytofurtherconsolidateitspositionasgloballeader.TaiwanAlthoughonlyonesmall-scaleoffshorewinddemonstrationprojectwascommissionedin2021duetoCOVID-19relateddisruptions,GWECMarketIntelligencebelievesthatTaiwaniswellpositionedtobecometheNumberTwooffshorewindmarketinthisregion.AccordingtotheBureauofEnergy’slatestrenewableenergydevelopmentstatusupdate,2GWofoffshorewindcapacityislikelytobeaddedinTaiwanbytheendofthisyear,puttingitontracktoreachthe5.6GWoffshorewindby202520212031e202656GW146GW370GW50%47%39%45%8%8%46%34%11%11%0.1%2%EuropeChinaOtherAsiaOtherTotalinstallationsoffshoreSource:GWECMarketIntelligence,June2022MarketOutlook2022-203193GWECGLOBALOFFSHOREWINDREPORT2022target.LastAugust,thegovernmentofficiallyannounceditsoffshorewindallocationplanbetween2026and2035.WithprojectsexpectedtobeallocatedfromtheupcomingRound3offshorewindauctioncomingonline,Taiwanislikelytoexceedthe2030offshorewindtargetssetbySouthKoreaandJapan.SouthKoreaSouthKoreaisthefourthlargestoffshorewindmarketintheregionwithatargetofbringing12GWofoffshorewindonlineby2030.FollowingitsGreenNewDealannouncedin2020andnetzerocommitmentpassedin2021,offshorewindandespeciallyfloatingwindhasdrawnheavyinterestfromlocalandforeignrenewablescompanies.However,GWEChasdowngradedour2030offshorewindoutlookforKoreabynearlyonethird(from8.7GWto6GW)comparedwithouroutlookreleasedlastSeptember,primarilybecausetherecentelectedPresidentYoonSuk-yeolisseekingtochangethepre-existingdynamicsandgoalsinnationalenergypolicy.Atthesametime,previouslyidentifiedbarrierssuchaspermittingandgridtransmissionstillneedtobeaddressedbeforethemarketisreadytotakeoff.JapanAsinthecasewithSouthKorea,Japanhasmadeheadlinesinoffshorewindinthepasttwoyears.Firstly,followingamajorcostreductionstudycommissionedbyGWECandJWPAandaseriesofindustry-governmentdialogues,theJapanesegovernmentalsoapprovedthe“OffshoreWindIndustryVision”targeting10GWoffshorewindby2030and30-45GWby2040.Secondly,thecountry’sfirsteverauctionsforfloatingandfixedbottomoffshorewindwerelaunchedin2020followingthedesignationofthefirstoffshorewinddevelopmentzonesbythegovernment.Despitetheprogressmadeinpast12monthsandthegrowingtractionthatoffshorewindcontinuestogain,therehavebeensetbacks,suchasthedelayofitsthirdoffshorewindauctionaswellasconcernsgeneratedbytheoutcomesofitsfirstfixed-bottomauction.GWECisthereforedowngradingits2030offshorewindoutlookforJapanbyaround25%relativetoourpreviousyear’soutlook.VietnamDespiteCOVID-19disruptionsbringingchallengestothelocalindustry,VietnamhadarecordyearincommissioningnearlyGW-levelintertidalprojectsin2021,makingitthesecondlargestmarketinthisregion.Followingtheinstallationrushdrivenbythecut-offofFeed-in-Tariffs,GWECMarketIntelligencepredictsthatnewinstallationsinVietnamwillfalloffin2022andmostlikelystayatalowleveluntilaclearoffshorewindregulatoryframework(theprocurementmechanisminparticular)isinplace.However,takingintoaccountthenetzerocommitmentmadeatCOP26aswellasthe7-8GWby2030offshorewindtargetincludedinthemostrecentdraftPowerDevelopmentPlanVIII(PDP8),VietnamispoisedtousherinaneraofacceleratedrenewableenergygrowthandbecometheoffshorewindmarketleaderinSoutheastAsiabyendofthisdecade.China71.9%Others0.9%India2.2%Vietnam5%Japan4.2%SouthKorea5.5%Taiwan10.3%136.3GWTotaladdedbetween2022and2031Source:GWECMarketIntelligence,June2022MarketOutlook2022-2031GWEC.NET94NorthAmericahasonlytwosmall-scaleoffshoreprojectsinoperationasoftheendof2021,consistingofthe30MWBlockIslandprojectinRhodeIslandandthe12MWDominionVirginiademonstrationproject,makingittheonlyregionwithoperationaloffshorewindprojectsoutsideofEuropeandAsiaasoftoday.Basedonthelatestoffshorewindprojectdevelopmenttimeline,thenextutility-scaleoffshorewindprojectisunlikelytocomeonlineinNorthAmericauntil2023.Intotal,31.9GWofoffshorewindispredictedtobebuiltinthisregioninthenexttenyears(2022-2031),ofwhich99%isexpectedtocomefromtheUnitedStatesandonly400MWisprojectedfromCanada.UnitedStatesOnly42MWofoffshorewindcapacityisinoperationintheUSasoftoday,butdevelopmentofoffshorewindmarketcontinuedtogainstrongmomentuminthepast12months.Afterthe800MWVineyardWind1projectreceivedthefinalmajorfederalapprovalfromBOEMinMay2021,constructionworkstartedinMassachusettsinNovember.Inthesamemonth,the132MWSouthForkwindprojectalsoreceivedfederalapprovalfromBOEMNorthAmerica20212022e2023e2025e2026e2027e2024e2028e2029e2030e2031eNorthAmericaCanada4,4004,0004,0004,3501,5244,0004,0009454,718CAGR+71%Newoffshoreinstallations,NorthAmerica(MW)CompoundAnnualGrowthRate.Source:GWECMarketIntelligence,June2022MarketOutlook2022-2031GWECGLOBALOFFSHOREWINDREPORT2022makingitthesecondUSoffshorewindprojectreadytoentertheconstructionphase.TosupporttheBidenAdministration’sambitious30GWby2030offshorewindtarget,BOEMhasissued25commercialand10competitiveoffshorewindenergyleasesintheAtlanticOcean,rangingfromMassachusettstoNorthCarolinawithacombinedcapacityof6.9GWmostrecentlyallocatedfromtheNewYorkBightandCarolinaLongBayauctions.FollowingthetwoleasingroundscompletedontheEastcoast,BOEMisnowreadytoholdthefirst-everoffshorewindleasesaleonWestCoastinthefourthquarterof2022.Atthestatelevel,a5GWoffshoretargetwasannouncedinLouisianainQ12022,followedbya3GWfloatingwindplanannouncedinbothCaliforniaandOregon,bringingthetotalofstate-leveloffshorewinddevelopmenttargetsuptonearly50GW.GWECMarketIntelligencepredictsatotalof27.5GWofoffshorewindcouldbebuiltintheUSbytheendof2030,thesamelevelaswepredictedforthismarketayearago.Virginia5.2GW(2034)Massachusetts5.6GW(2027)NewJersey7.5GW(2035)NorthCarolina8GW(2040)NewYork9GW(2035)Maryland1.2GW(2030)Connecticut2GW(2030)Oregon3GW(2030)California3GW(2030)Louisiana5GW(2030)49.5GWUSState-leveloffshorewinddevelopmenttargetsAnnouncedplan,notyetsignedbylawMarketOutlook2022-203195GWEC.NET9680%oftheworld’soffshorewindresourcepotentialliesinwatersdeeperthan60m,butasoftheendof2021only121.4MWofnetfloatingwindcapacityisinoperationworldwide,accountingfor0.2%ofthetotalinstalledoffshorewindcapacity.Nevertheless,significantprogresshasbeenmadesincethefirstMW-scalefloatingoffshorewindturbinewasgrid-connectedinNorwayin2009.FollowingadecadeoftestingfirstinEuropeandtheninAsia,floatingwindhasnowpassedthedemonstrationstageandenteredthepre-commercialphase.SincethereleaseofourGlobalOffshoreWindReport2021,furtherbreakthroughshavebeenrecordedinthissector.Asoftoday,theglobalfloatingoffshorewindpipelinealreadytops120GW.IntheUK,forexample,15GWoffloatingwindprojectswontheScotWindleasingroundwithanother4GWoffloatingwindcapacityexpectedtobeunlockedfromtheproposedseabedleasingintheCelticSea.Thisdevelopment,withoutanydoubt,haspavedthe,muchneeded,wayforcommercialisingfloatingwind.Asdevelopers,especiallyoilandgascompanies,haveastrongappetiteforfloatingwind,newfloatingwindtargetshavebeenannouncedonbothsidesoftheAtlanticOceaninthepast12months.Takingintoaccountthepositivepoliticalmomentumbehindfloatingwind,theincreasedfloatingwindtargetintheUKandtheacceleratedfloatingprojectdevelopmentactivitiesinEurope,AsiaandNorthAmerica,GWECMarketIntelligencehasupgradeditsglobalfloatingwindforecastandpredictsthat18.9GWislikelytobebuiltgloballyby2030,comparedwith16.5GWthatwepredictedayearago.Asoftoday,theUK,Portugal,Japan,NorwayandChinaarethetopfivemarketsintotal(gross)floatingwindinstallations.Bytheendofthisdecade,theUK,SouthKorea,UnitedStates,SpainandIrelandarelikelytobethetopfivefloatingmarkets.Aswithlastyear,ournear-term(2022-2026)outlookisprimarilybasedontheexistingglobalfloatingoffshoreprojectpipeline.However,atop-downapproachhasbeenappliedforthemedium-term(2027-2030)outlook,whichtakesintoaccountnationalfloatingwindtargetsanddevelopmentplansannouncedbymajoroffshorewindinvestors.Consideringfloatingwindwillbecomefullycommercialisedtowardstheendofthisdecade,GWECMarketIntelligenceforecaststhat28.7GWofnewfloatingwindcapacitywillbeaddedin2022-2031,ofwhichlessthan10%(or2.7GW)willbebuiltinthefirsthalfofthedecadeandthemajority(90%)ofnewvolumewillcomeonlinein2027-2031.Asregardstoregionaldistribution,weexpectEuropetocontribute59.2%oftotalinstallationsaddedin2022-2031,followedbyAsia(29.4%)andNorthAmerica(11.4%).Asoftheendof2031,atotalof28.8GWoffloatingwindislikelytobeinstalledworldwide,bringingitscontributiontototaloffshorewindinstallationsfromtoday’s0.2%to7.8%.Tohelpunlocktheglobalfloatingwindpotential,GWEClauncheditsFloatingOffshoreWindTaskForceinJuly2020.FloatingOffshoreMarketOutlookto2031RoadmapoffloatingoffshorewindcommercialisationDemoandtrialphase(2009-2020)Pre-commercialphase(2021-2025)Commercialphase(from2026onward)MarketOutlook2022-2031Roadmapoffloatingoffshorewindcommercialisation97GWECGLOBALOFFSHOREWINDREPORT202220212022e2023e2025e2026e2027e2024e2028e2029e2030e2031e990049001166140033069002838104857.196101CAGR+83%CAGR+53%SpainSwedenIrelandSouthKoreaNorwayJapanFranceChinaItalyGreeceTaiwanUnitedKingdomPortugalUnitedStates20025030030035030025028830010010030015010035029627010102008411691117351768825.54.648107410010325095100010005005005008005007005007005005005004007005001000500500500600300500100050060050080050075050015001000500500750500500Newfloatingwindinstallations,Global(MW)CompoundAnnualGrowthRate.,Note:thisfloatingwindoutlookisalreadyincludedinGWEC’sglobaloffshorewindforecast.Source:GWECMarketIntelligence,June2022MarketOutlook2022-2031APPENDIX98GlobalOffshoreWindReport2022-MethodologyandTerminologyDatadefinitionsandadjustmentsGWECreportsinstalledandfullycommissionedcapacityadditionsandtotalinstallations.Newinstallationsaregrossfiguresnotdeductingdecommissionedcapacity.Totalinstallationsarenetfigures,adjustedfordecommissionedcapacity.HistoricinstallationdatahasbeenadjustedbasedontheinputGWECreceived.GWECmadetheadjustmentstobothnewandcumulativeinstallationsoverthecourseoftime.Allcurrencyfiguresin$aregiveninUSDollars.DefinitionofregionsGWECadjusteditsdefinitionofregionsforthe2018GlobalWindReportandmaintainstheseinthe2022edition,specificallyforLatinAmericaandEurope.LatinAmerica:South,CentralAmericaandMexicoEurope:GeographicEuropeincludingNorway,Russia,Switzerland,Turkey,UkraineSourcesforthereportGWECcollectsinstallationdatafromregionalorcountrywindassociations.Forthesupplysidedata,GWECcollectsdirectlyfromwindturbineOEMs.UsedterminologyGWECusesterminologytothebestofourknowledge.Withthewindindustryevolvingcertainterminologyisnotyetfixedorcanhaveseveralconnotations.GWECiscontinuouslyadaptingandadjustingtothesedevelopments.AEPAnnualEnergyProductionBOEMBureauofOceanManagementC&ICommercialandIndustrialcCAGRCompoundAnnualGrowthRateCCSCarbonCaptureandStorageCECCaliforniaEnergyCommissionCfDContractsforDifferenceCODCommercialOperationDateCSIROCommonwealthScientificandIndustrialResearchOrganisationDEADanishEnergyAgencyDNSHDoNoSignificantHarmDOEDepartmentofEnergyDOIDepartmentofInteriorEBLElectricityBusinessLicenseEIAEnvironmentalImpactAssessmentEPCEngineering,ProcurementandConstructionEVNVietnamElectricityFERCFederalEnergyRegulatoryCommissionFiTFeed-in-TariffFYFinancialYearGHGGreenhouseGasEmissionsH&SHealthandSafetyIEAInternationalEnergyAgencyIRENAInternationalRenewableEnergyAgencyJWPAJapanWindPowerAssociationKEPCOKoreaElectricPowerCorpLCOELevelisedCostofEnergyLIDARLightDetectionandRangingMACMaritimeAreaConsentMETIMinistryofEconomy,Trade,andIndustryofJapanMLITMinistryofLand,Infrastructure,TransportandTourismofJapanMNREMinistryofNewandRenewableEnergyofIndiaMONREMinistryofNaturalResourcesandEnvironmentofVietnamMSPMarineSpatialPlanningNABTUNorthAmericaBuildingTradeUnionNDCNationallyDeterminedContributionNDRCNationalDevelopmentandReformCommissionofChinaNEANationalEnergyAdministrationofChinaOEMOriginalEquipmentManufacturerOREDPOffshoreRenewableEnergyDevelopmentPlanORESSOffshoreRenewableEnergySupportSchemePDP8PowerDevelopmentPlanVIIIofVietnamPEPPhilippineEnergyPlanPMSGPermanentMagnetSynchronousGeneratorPQQPrequalificationQuestionnairePSUPublicSectorUndertakingRECsRenewableEnergyCertificatesREEsRareEarthElementsRODAResponsibleOffshoreDevelopmentAllianceRPSRenewablePortfolioStandardRVONetherlandsEnterpriseAgencySDGsUNSustainableDevelopmentGoalsSEAStrategicEnvironmentalAssessmentSNGSyntheticNaturalGasSOVServiceOperationVesselTCETheCrownEstateWTIVWindTurbineInstallationVesselAcronymsAppendix99GWEC.NET100AboutGWECMarketIntelligenceGWECMarketIntelligenceAreasGWECMarketIntelligenceprovidesaseriesofinsightsanddata-basedanalysisonthedevelopmentoftheglobalwindindustry.Thisincludesamarketoutlook,countryprofiles,policyupdates,deep-divesontheoffshoremarketamongmanyotherexclusiveinsights.GWECMarketIntelligencederivesitsinsightsfromitsowncomprehensivedatabases,localknowledgeandleadingindustryexperts.Themarketintelligenceteamconsistsofseveralstrongexpertswithlong-standingindustryexperienceacrosstheworld.GWECMarketIntelligencecollaborateswithregionalandnationalwindassociationsaswellasitscorporatemembers.HowtoaccessGWECMarketIntelligenceCorporateGWECMemberslWindenergyassociationslMarketIntelligencesubscriptionContactContactFengZhaofeng.zhao@gwec.netGWECMarketIntelligencecreatedaMember-onlyareatoprovidemorein-depthmarketintelligencetoGWEC’smembersandtheiremployees.ClickheretogetyourloginMarketInsightsMarketstatistics,marketoutlook,auction/tenderupdatesPolicyandRegulationsCountryprofiles,policyupdates,offshoreupdatesAssetOwnersDatabaseofassetownersinkeymarketsTechnology/SupplyChainWindturbinedata,technologytrends,componentassessmentEnergyTransitionShifttovalue-focused,newwind-basedsolutionsO&MISP-OEM-SelfPerformdatabaseforkeymarketsAppendix101GWECGLOBALOFFSHOREWINDREPORT2022ProductFrequency1.WindEnergyStats/MarketDataWindStats2021(historicannual,accumulative,decommisiondata)AnnualGlobalWindReport2022AnnualWindEnergyStatistics(windenergypenetrationrate,jobs)Annual2.CountryProfiles/PolicyUpdatesCountryProfilesOnshores/CountryProfilesOffshoreQuarterly/Ad-hocAd-hocPolicyUpdatesAd-hoc3.MarketOutlookGlobalWindMarketOutlook2022-2026(Q1andQ3)Database+ReportSemi-AnnualIndiaMarketOutlookReport2022-2026AnnualGlobalWindWorkforceOutlook2022-2026Annual4.SupplySideDataGlobalWindTurbineSupplySideDataReport2021(byOEM,bytechnology,byturbineratings,modelsanddrivetrain,etc)Annual5.Auctions/TendersGlobalWindAuctionDatabaseAnnual/QuarterlyAuctionTrendsandLearningsQuarterly6.OffshoreWindMarketGlobalOffshoreWindReport2022AnnualMarketEntryOpportunitiesDatabaseAnnual/QuarterlyGlobalOffshoreProjectPipeline(database,inoperationandunderconstruction)Annual/QuarterlyGlobalOffshoreTurbineInstallationVesselDatabaseandReportAnnual/Quarterly7.ComponentsAssessmentGearbox(2019),Blade(2020),Generator(2021),Gearbox(Q42022),followedbyothercomponentsSpecialReport8.WindAssetOwners/OperatorsAssetOwnersandOperatorsDatabase(Onshore&OffshoreRanking)AnnualAssetOwnersandOperatorsStatusReport(includingstrategicaltrends)Annual9.O&MO&MServiceProviderDatabase(ISP-OEM-Self-perform)AnnualO&MServiceProviderStatusReport(includingregionaltrends)Annual10.Energytransition,Digitalisation,NewTechnologiesPositionpapers/studies-permitting,CorporatePPAsSpecialReportNewsolutions,GWECpolicyrecommendationsSpecialReportGWECMarketIntelligenceProductsin2022AppendixGWEC.NET102GlobalLeadersSiemensGamesaSiemensGamesaunlocksthepowerofwind.Formorethan40years,wehavebeenapioneerandleaderofthewindindustry,andtodayourteamofmorethan26,000colleaguesworkatthecenteroftheglobalenergyrevolutiontotacklethemostsignificantchallengeofourgeneration–theclimatecrisis.Withaleadingpositioninonshore,offshore,andservice,weengineer,buildanddeliverpowerfulandreliablewindenergysolutionsinstrongpartnershipwithourcustomers.Aglobalbusinesswithlocalimpact,wehaveinstalledmorethan120GWandprovideaccesstoclean,affordableandsustainableenergythatkeepsthelightsonacrosstheworld,whilesupportingthecommunitieswhereweoperate.ShellShellisbuildingaglobalintegratedpowerbusinessspanningelectricitygeneration,tradingandsupply.Shellenteredtheoffshorewindbusinessin2000aspartofaconsortiumthatinstalledthefirstoffshorewindturbineinUKwaters.Today,wehavedeployed,oraredeveloping,overeightgigawatts(GW)ofwindacrossNorthAmerica,Europe,theUK,andAsia.WeseeoffshorewindasacriticalwayofgeneratingrenewableelectricityforourcustomersandmovingShelltowardsitstargetofbeinganet-zeroemissionsenergybusinessby2050orsooner,instepwithsociety.ØrstedTheØrstedvisionisaworldthatrunsentirelyongreenenergy.Ørsteddevelops,constructs,andoperatesoffshoreandonshorewindfarms,solarfarms,energystoragefacilities,renewablehydrogenandgreenfuelsfacilities,andbioenergyplants.Moreover,Ørstedprovidesenergyproductstoitscustomers.Ørstedistheonlyenergycompanyintheworldwithascience-basednet-zeroemissionstargetasvalidatedbytheScienceBasedTargetsinitiative(SBTi).Ørstedranksastheworld’smostsustainableenergycompanyinCorporateKnights’2022indexoftheGlobal100mostsustainablecorporationsintheworldandisrecognisedontheCDPClimateChangeAListasagloballeaderonclimateaction.MainstreamRenewablePowerMainstreamRenewablePowerisaleadingpure-playrenewableenergycompany,withwindandsolarassetsacrossglobalmarkets,includinginLatinAmerica,Africa,andAsia-Pacific.Mainstreamisoneofthemostsuccessfuldevelopersofgigawatt-scalerenewablesplatforms,acrossonshorewind,offshorewind,andsolarpowergeneration.Ithassuccessfullydelivered6.5GWofwindandsolargenerationassetstofinancialclose-ready.InMay2021,AkerHorizonsacquireda75%equitystakeinthecompany,acceleratingitsplanstodeliveritshigh-qualitypipelineofover16gigawattsofcleanenergy.MainstreamhasraisedmorethanEUR3.0bninprojectfinancetodateandemploysmorethan420peopleacrossfivecontinents.TheGlobalWindEnergyCouncil’sGlobalLeadersareanexclusiveleadershipgroupofdecision-makersandtop-tiermemberswhoformthebasisoftheAssociation’sExecutiveCommittee,whichdrivestheworkprogrammeandplaysamajorroleinshapingGWEC’sprioritiesforitseffortsintheshortandlong-termstrategy.GWECGlobalLeaders103GWECGLOBALOFFSHOREWINDREPORT2022GERenewableEnergyGERenewableEnergyharnessestheearth’smostabundantresources–thestrengthofthewind,theheatofthesunandtheforceofwater;deliveringgreenelectronstopowertheworld’sbiggesteconomiesandthemostremotecommunities.Withaninnovativespiritandanentrepreneurialmindset,weengineerenergyproducts,gridsolutionsanddigitalservicesthatcreateindustry-leadingvalueforourcustomersaroundtheworld.IberdrolaWithover170yearsofhistorybehindus,Iberdrolaisnowaglobalenergyleader,thenumberoneproducerofwindpower,andoneoftheworld’sbiggestelectricityutilitiesintermsofmarketcapitalisation.Wehavebroughttheenergytransitionforwardtwodecadestocombatclimatechangeandprovideaclean,reliableandsmartbusinessmodel,tocontinuebuildingtogethereachdayahealthier,moreaccessibleenergymodel,basedonelectricity.VestasVestasistheenergyindustry’sglobalpartneronsustainableenergysolutions.Wedesign,manufacture,install,andservicewindturbinesacrosstheglobe,andwith+151GWofwindturbinesin86countries,wehaveinstalledmorewindpowerthananyoneelse.Throughourindustry-leadingsmartdatacapabilitiesand+129GWofwindturbinesunderservice,weusedatatointerpret,forecast,andexploitwindresourcesanddeliverbest-in-classwindpowersolutions.Togetherwithourcustomers,Vestas’morethan29,000employeesarebringingtheworldsustainableenergysolutionstopowerabrightfuture.EquinorWearelookingfornewwaystoutiliseourexpertiseintheenergyindustry,exploringopportunitiesinnewenergyanddrivinginnovationinoilandgasaroundtheworld.Weknowthatthefuturehastobelowcarbon.Ourambitionistobetheworld’smostcarbon-efficientoilandgasproducer,aswellasdrivinginnovationinoffshorewindandrenewables.Weplantoreachaninstallednetcapacityof12-16GWfromrenewablesby2030,two-thirdsofthiswillbefromoffshorewind.Withfivedecadesofoceanengineeringandprojectmanagementexpertise,focusonsafeandefficientoperations,indepthknowledgeoftheenergymarkets,skilledpersonnelandanetworkofcompetentpartnersandsuppliers,Equinorisuniquelypositionedtotakealeadingroleintheoffshorewindindustry.Frombuildingtheworld’sfirstfloatingwindfarmtobuildingtheworld’sbiggestoffshorewindfarmwearewellunderwaytodeliverprofitablegrowthinrenewablesbealeadingcompanyintheenergytransition.GWEC.NET104ØrstedAndrewHo,(ANDMH@orsted.com)HartingElectricGuanghaiJin(Guanghai.Jin@harting.com)LincolnElectricBryanO’Neil(Bryan_ONeil@lincolnelectric.com)SSERichardHolligan(Richard.Holligan@sse.com)CRUHarryWalford(harry.walford@crugroup.com)BonfiglioliRobertoPasqualini(roberto.pasqualini@bonfiglioli.com)AssociateSponsorsSupportingSponsorLeadingSponsor105GWECGLOBALOFFSHOREWINDREPORT2022GWEC.NETGlobalWindEnergyCouncilRuedeCommerce311000Brussels,BelgiumT.+32490568139info@gwec.net@GWECGlobalWind@GlobalWindEnergyCouncil(GWEC)@GlobalWindEnergyCouncilwww.gwec.netGLOBALWINDENERGYCOUNCIL