Global capacity and investment for offshore wind set records in 2020, according to research from The Renewables Consulting Group (RCG).
According to RCG’s Global Renewable Infrastructure Projects (GRIP) database, the total capacity for offshore wind last year reached 8,370MW across the European, Americas and Asia Pacific (excluding China) regions, eclipsing the previous total of 6,438MW installed in 2018. Global investment for offshore wind also set new highs last year as investment reached US$30bn, surpassing the previous high of US$22bn set in 2018.
“Global offshore wind continues its extraordinary growth,” explained Maxwell Clarke, an associate in RCG’s market intelligence team. “Despite the pandemic, 2020 saw more offshore wind capacity and investment than any year before. Across global markets, record capacity investments were not only seen in firm commitments to build projects, but also in capacity acquired through mergers and acquisitions.”
Multiple FIDs reached in 2020
Several notable offshore wind projects, such as Dogger Bank A&B, the world’s largest offshore wind project, reached their final investment decisions (FID) in 2020.
Each country where offshore wind projects attained the FID milestone – the United Kingdom, France, Netherlands, Germany and Taiwan – utilised some type of framework agreement such as the UK’s contracts for differences or the feed-in-tariff model used in Taiwan and China.
The UK saw more than 3,658MW in capacity secured investment with 2,95 MW supported by the contracts for difference (CFD) mechanism.
China’s offshore wind market – which is slated to surpass the UK as the leading global market in operational capacity by the end of this year - experienced unprecedented growth and project deployment last year.
Risk reduction needed
While emerging markets have seen unprecedented growth in 2020, firm investment to take projects forward still requires a reduction in relative asset risk, noted RCG.
In 2020 and early 2021, this need for project de-risking has been recognized in Greece, Sweden, Brazil, Romania and Bulgaria, with respective governments openly exploring offshore wind frameworks and incentivizing forward market growth.
By Rebecca Jeffrey
