IEA (2019), Tracking Power, IEA, Paris https://www.iea.org/reports/tracking-power-2019
Grid-connected offshore wind capacity additions reached 4.6 GW in 2018, 13% higher than in 2017. Expansion shifted from the European Union to China: while EU additions declined by 17%, in China they more than tripled to 1.6 GW in 2018.
For the first time, China installed more offshore capacity than any other country (1.6 GW), followed by the United Kingdom (1.3 GW) and Germany (1.0 GW).
Nevertheless, offshore wind annual capacity additions need to more than quadruple by 2030. Despite positive technology developments and cost reductions, growth must accelerate for the technology to get fully on track with the Sustainable Development Scenario (SDS).
As a part of Offshore Wind Outlook 2019, IEA initiated a new geospatial analysis to assess offshore wind technical potential by country. Analysis showed that the best, close-to-shore offshore wind sites could provide almost 36 000 TWh globally per year, which is nearly equal to global electricity demand in 2040. However, successful exploitation of this enormous potential requires overcoming several challenges. Government policies will continue to play a critical role in the future of offshore wind.
In 2018, manufacturers announced turbines with record-level rated capacities ranging from 10 MW to 12 MW, to be available for plants commissioned after 2020. These turbines are expected to deliver the record-low winning bids (USD 55-75/MWh) submitted since 2017 in Germany, the United Kingdom and the Netherlands.
Recent EU auction results indicate cost reductions of 45‑50% in the next five years owing to economy-of-scale advantages, standardisation and clustering. The strike prices in the UK offshore auction resolved in September 2019 with expected commission in 2025 were only USD 49-52, which is an evidence of rapid offshore technology maturing in coming years.
The industry is also adapting various floating foundation technologies that have already been used in the oil and gas sector. In 2017, the world’s first commercial floating wind farm started operating in Scotland and other projects are under development with potential to prove the feasibility and cost-effectiveness of floating offshore wind technologies.
New growth markets for offshore wind are emerging in the United States, Chinese Taipei and Japan.
In the United States, developers proposed multiple projects in four different states (Maryland, Long Island, New Jersey and North Carolina).
Chinese Taipei completed an auction for 5.5 GW of offshore wind capacity, and the utility already signed power purchase agreements for 1 GW, with the revised feed-in tariff announced in late February 2019.
In Japan, the parliament has approved a new law to define project development zones. This new law is expected to reduce permitting and grid connection challenges, and result in the deployment of large-scale projects.
The pace of growth in these nascent markets could accelerate the expansion of offshore wind outside of Europe and China. These markets face permitting and grid connection challenges, however, and costs remain relatively high.
In Europe, accelerated growth depends on how offshore wind figures in countries' renewable energy plans to achieve the newly adopted 2030 targets. In China, faster cost reductions need to be achieved to accelerate growth, as the government aims to reduce renewable energy subsidies.
A great potential for cost reductions, or even technology breakthrough, exists in the offshore wind sector. In particular, innovation is needed in installation processes and foundation designs. An improved understanding of the requirements of wind technology in offshore conditions, as well as the management of large numbers of wind farms will be necessary to design turbines, systems and farms. Changes in design architecture and an ability to withstand a wider array of design considerations including hurricanes, surface icing, and rolling and pitching moments, are also likely to be needed. Improved alternative-current (AC) power take-off systems or the introduction of direct-current (DC) power systems are also promising technologies for internal wind power plant grid offshore and connection to shore.
Soft costs for offshore wind take up a substantial share of total installed costs, and together with interconnection they are a key challenge for reaching SDS cost goals. Offshore wind farms also need to incorporate high levels of resilience to stronger wind regimes and meteorological conditions off shore, particularly to mitigate the impact of long-term exposure to seawater.
As turbine costs drop in the SDS, interconnection and balance-of-system take up a higher share of overall installation costs. Learning on design concepts as well as fundamental technology improvements to power engineering equipment will be necessary.
The richest offshore wind resource is located in deep waters, where attaching turbines to the seabed is not practical. Floating offshore foundations, offer the potential for less foundation material, simplified installation and decommissioning, and additional wind resource at water depths exceeding 50 m to 60 m. Several regions (e.g. the US or Japan) have a low share of their resource in shallow waters. Floating foundations may also be attractive for mid-depth projects, where saturation of onshore or near-shore potential or the possibility of standardising floating foundation designs and do not need heavy-lift vessels to transport foundations.