The Global Offshore Wind Market Anticipated to Generate a Revenue of $61,443.7 Million, Growing at a CAGR of 12.9% from 2021 to 2028Download Sample Reports Overview
The global offshore wind market is estimated to be valued at $61,443.7 million by 2028, surging from $24,983.1 million in 2020, at a noteworthy CAGR of 12.9%.
Impact Analysis of COVID-19 on the Offshore Wind Market
The global market for offshore wind experienced a low growth amid the COVID-19 pandemic. Several countries imposed complete lockdowns, social distancing norms, and travel bans to contain the spread of the virus. Moreover, people are isolating themselves from public gatherings and marketplaces to prevent contracting the virus. Due to complete lockdown, availability and movement of supply trucks were affected, disrupting the supply chain and production. In addition to this, import and export restrictions had a significant impact on the supply chain, affecting the growth of the offshore wind market. Moreover, companies have to work with a limited workforce due to the social distancing norms, affecting the production process, resulting in increased order backlogs.
Global Offshore Wind Market Analysis
To meet energy demand and net-zero climate goals, developing countries such as China, India, and Brazil are investing billions of dollars in renewable energy sector. This has led to an increase in onshore and offshore wind energy. For instance, according to India Brand Equity Foundation, in June 2021, Reliance Industries announced to invest $10.07 billion in the green energy segment. Besides, China is expected to add significant offshore wind power every year to meet the growing energy demand. These factors are expected to fuel the demand for offshore wind in the power sector.
Offshore wind farms are constructed in bodies of water, especially ocean. Installing wind turbine in the shallow and deep water is cost intensive. Besides, most conventional onshore wind turbines have 2-3 MW capacity, while offshore wind turbine can be as large as 12 MW, resulting in higher foundation, electric structure, and turbine cost. Furthermore, as offshore wind turbine operates in harsh environment, operation & maintenance cost is relatively high compared to onshore wind turbine. For instance, as per the Weather Guard Lightning Tech, the operation & maintenance cost is around $42,000 – $48,000 per year or 1-2 cents per kilowatt-hour produced in the United States. These factors are expected to hamper market growth.
The global electricity demand is growing at 2.1% per year. The growing electricity demand is attributed to rapid urbanization and industrialization, especially in developing countries. To meet the growing electricity demand, countries such as China and India have increased investment in renewable energy sources. For instance, as per the Offshore Energy Today. Com, on 21 December 2021, renewable energy subsidiary of a major Chinese project developer, announced to invest €5.7 billion in 3 GW of offshore wind farm. These factors are projected to provide growth opportunities for offshore wind market.
Global Offshore Wind Market, Segmentation
The global offshore wind market is segmented based on product, location, and region.
The product segment is further classified into components, structures, and service. Among these, the components sub-segment is anticipated to have the fastest as well as dominant growth and surpass $36,866.2 million by 2028, with an increase from $14,715.0 million in 2020. Offshore wind turbines can be as larger as 12 MW, as result they can generate more power compared to onshore wind turbine. Besides, advancement in the wind technology has led to an increase in the investment of the offshore wind market, propelling the growth of components sub-segment market.
The location segment is further divided into shallow water, transitional water, and deep water. The shallow water sub-segment is anticipated to be the dominating sub-segment in the global market and register a revenue of $42,396.1 million during the analysis timeframe. Ease of installation and low operation & maintenance cost are main factors driving the investment in the shallow water offshore wind farm market. However, deep water sub-segment is projected to grow with highest CAGR of 13.5% from 2021 – 2028 due to growing R&D investment to develop floating wind turbine. Besides, wind speed is relatively high in deep water, as a result, wind turbine can rotate with high speed, generating more electricity. These factors are driving the growth of deep water wind turbine sub-segment.
The offshore wind market for the Asia-Pacific region is projected to witness dominant share. This market generated a revenue of $12,516.5 million in 2020 and is further projected to reach up to $31,502.2 million by 2028. The market for offshore wind is driven by supportive government policies along with growing investment in renewable energy sector in countries like China, India, and South Korea.
North America offshore wind market is projected to grow at a highest CAGR of 15.0% from 2021 – 2028. North America offshore wind market was valued $1,998.6 million in 2020, reaching $5,671.3 million by 2028. The growing investment in offshore wind is the main factor driving the market in the North America. For instance, according to the CNNC, on May 12, 2021, the U.S. government announced to develop offshore wind turbine located in waters off the coast of Massachusetts with an investment of $3.03 billion.
Key Players in the Global Offshore Wind Market
Some of the leading offshore wind market players are
- Siemens Gamesa
- Shanghai Electric Wind Power Equipment Co.
- Nordex SE
- General Electric
Along with the company profiles of the key players in the market, the report includes the Porter’s five forces model that gives deep insights into the competitive environment of the market.
Porter’s Five Forces Analysis for the Global Offshore Wind Market
- Bargaining Power of Suppliers: The suppliers involved in the market are extensive in number. Thus, manufacturers and companies have several options and alternatives to handle expensive supplies.
Thus, the bargaining power of the suppliers is low.
- Bargaining Power of Buyers: There is higher power of buyer as they can switch from one vendor to another.
Hence, the bargaining power of buyers is high.
- Threat of New Entrants: The process of manufacturing offshore wind turbine is complex and requires huge capital investment. Furthermore, companies in the offshore wind market require specialized knowledge.
Thus, the threat of the new entrants is low.
- Threat of Substitutes: Growing investment in onshore wind market may act as substitute for the offshore wind market.
Therefore, the threat of substitutes is moderate.
- Competitive Rivalry in the Market: The ventures operating in the global offshore wind are opting for various businesses deployment strategies to hold their position in the market. Companies are launching innovating products in the international market and strengthening the footprint worldwide.
Therefore, competitive rivalry in the market is high.