According to a report released by market research firm Markets and Markets, the global offshore wind power market was valued at approximately US$27.02 billion in 2017 and is projected to grow to US$55.11 billion by 2022, with a compound annual growth rate (CAGR) of 15.32% during the period.
Due to rising energy demand, the increasing share of renewable energy in the power generation mix, stringent carbon reduction requirements for energy efficiency, and government incentives supporting renewable energy deployment, the global market is witnessing significant growth.
By location, shallow water is the largest offshore wind power market
Among the three water depth categories for offshore wind turbines, the shallow water segment is expected to account for the largest share. Due to favorable weather conditions, development in shallow water is generally cost-effective, whereas installing wind turbines in deep water is expensive due to high maintenance costs. However, depending on the region, turbine capacity, and wind speed, offshore wind turbines will be installed across all three water depth categories. Due to favorable weather conditions, freshwater areas in European countries hold a clear advantage. Major suppliers of turbines installed in shallow water include Siemens (Germany) and Mitsubishi Heavy Industries-Vestas (Denmark), among others.
Turbine components will account for the largest share of the offshore wind power market
Turbines account for the highest cost expenditure in offshore wind projects. They are the most important component of offshore wind farms. The three major parts—nacelle, rotor, and tower—account for the largest share of costs, while substructures account for a lower proportion of capital expenditure, mainly in shallow water. Due to advanced technology, companies are upgrading and scaling up turbines and improving energy efficiency. In addition, the larger the wind turbine, the more energy is generated with each rotation. Therefore, turbine manufacturers are continuously upgrading and expanding their product portfolios, helping to meet the growing demand for high-capacity wind turbines.
Asia-Pacific is the second-largest offshore wind power market
Due to trends such as urbanization and industrial growth, which have led to increased electricity demand in the Asia-Pacific region, this regional market is expected to become the second-largest in the world. Asia-Pacific countries are focusing on renewable energy generation, and offshore wind power is an important component of renewable energy generation. Technological progress and clean energy consumption will further drive wind power deployment and open up opportunities in emerging markets in the Asia-Pacific region, especially in countries such as China, Japan, and South Korea, as they seek alternative energy sources to diversify their energy mix and reduce carbon dioxide emissions. Other major drivers include stringent government regulations on energy efficiency.
To provide insight into the competitive landscape, the report identifies some of the leading companies in the offshore wind power market, including Siemens (Germany), ABB (Switzerland), Mitsubishi Heavy Industries-Vestas (Denmark), General Electric (USA), EEW Group (Germany), A2Sea (Denmark), and Nexans (France), among others. Leading companies are seeking to penetrate markets in developing countries and are adopting various strategies to increase their market share.