Despite supply chain headwinds and price tensions, the consolidated portfolio of the The wind energy market has advanced significantly this year in the form of wind turbinesSince 2023, 2023 has been marked by unprecedented activity in late-stage portfolio mergers and acquisitions and turbine order generation and decision-making for financial investors (FID) in projects. The pace should not slow down until at least 2024, according to the Wood Mackenzie report ‘Offshore Wind Energy Review 2023’.
From crisis to revolution: the rebirth of offshore wind energy in 2024
For most of 2023, negative headlines were everywhere offshore wind energy thanks to inflation and the increase in component prices that changed the costs on the contract curve for the sector. “8 gigawatts (GW) of guaranteed consumption has been canceled and there is no participation in AR5 in the UK, the world’s second largest offshore market after China,” said Finlay Clark, senior analyst at Wood Mackenzie. This could be a tough test for the sector.
Continuing his statement, Finlay Clark added: “Towards the end of the year, however, the sector gained momentum as developers doubled down on more tangible near-term opportunities: FIDs and turbine orders reached record levels, and both bidding volumes and acquisitions of advanced portfolios also increased compared to 2022,” he concluded, however, emphasizing: “The most important thing for 2024 is that governments around the world provided much-needed support to the sector by introducing frameworks for new and to announce strengthened policy. .
The 61% year-on-year increase in annual net project portfolio growth slowed to 18% in 2020, “and experienced declines of 38% and 39% in 2021 and 2022, respectively, when The marine energy capacity with projects became increasingly limited” the report reads. “In 2023, a 61% year-on-year decline was experienced in that metric, to a net annual increase of 6.9 GW, attributable to a reduction in project ambitions in emerging energy markets. offshore wind energy territorial, where capacity in recently tendered projects fell by 18% in 2023, after spectacular increases of 53% and 40% in previous years.
Developers’ strategic pivot: a look behind global offshore wind decisions
Looking ahead to 2024, developers adopted a more cautious strategy, focusing primarily on concrete opportunities in core markets. This new orientation caused a decline in alliance formation and merger and acquisition activity on initial projects fewer international developers and investors sought connections with new local participants in higher risk markets.
In terms of grid-connected capacity, China has expanded its capacity by 6.7 GW by the end of 2023, increasing its dominance to 49% of the global fleet. Major Chinese asset owners continued to rise in the rankings. Outside said country, Annual capacity connected to the grid decreased by 23% compared to the 2022 annual maximum, up to 4.2 GW. Europe contributed only 2.9 GW, followed by Asia-Pacific, excluding China, with 1.3 GW.
“Installations in Europe could have been 88% larger outside of China. An additional 3.7 GW was initially sought to connect to the grid in 2023, but project delays due to transmission issues, along with offshore construction and permitting challenges, have pushed capacity back to 2024,” Finlay later explained out. .
Towards 2030: challenges and crucial decisions
In closing, Clark concluded his statement with the following explanation: “2030 is only six years away – policymakers must accelerate processes and, in many markets, change their approaches to achieve their goals. This includes adjusting your goals. Higher targets do not mean more offshore wind capacity if they are not supported by a policy framework It obviously shows a route to achieving these ambitions. “It takes political courage to endure this reality.”