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Total offshore wind capacity globally is expected to reach 120 GW by 2026

Total offshore wind capacity globally is expected to reach 120 GW by 2026

Cumulative offshore wind capacity is forecast to more than triple by 2026, reaching almost 120 GW, according to the Renewables 2021 – Analysis and Forecasts to 2026 report from the International Energy Agency (IEA).

We ended 2021 with offshore wind additions reaching 11 GW, almost double compared with last year, according to the report which says this is driven by expansion in China, where developers have rushed to complete projects and secure the favorable Feed-in-Tariff (FIT) before it expires.

While China’s growth will slow down through the upcoming period and until 2026, annual offshore wind capacity additions are expected to reach 21 GW by then with rapid expansion in new markets. IEA’s main case scenario sees the share of offshore capacity in overall annual wind additions reaching over 20 per cent, up from 5 per cent in 2020, breaking a record at the end of the forecast period.

Market Development at France, US, and Asia Pacific

Large-scale projects are expected to be commissioned beyond the established markets of the United Kingdom, Germany, Belgium, Denmark and the Netherlands in the next five years, with a boost to the global installed capacity set to come from France, Taiwan, South Korea, Vietnam, Japan, and the United States.

Based on the upcoming projects from these new markets in addition to new installations in the established markets, IEA anticipates cumulative capacity to reach almost 120 GW by 2026 in its main case, while this goes up to 134 GW in the accelerated case.

The accelerated case considers faster offshore and onshore grid expansion in the United Kingdom and the European Union, rapid cost decline and strong provincial-level policies in China, and the early-commissioning of large-scale pipeline in the United States, which together could push cumulative global offshore wind capacity to 14 GW more.

As for the main case looking at the new markets, France’s offshore wind capacity is expected to take off in 2022 with the full commissioning of the 480 MW project in Saint-Nazaire. By the end of 2026, offshore wind capacity in France is expected to reach 3.7 GW, with seven large projects expected to come online, IEA states.

South Korea’s cumulative wind capacity is expected to almost triple by 2026, with offshore wind providing the majority of the expansion. Wind projects in South Korea are not eligible for fixed-price contracts and instead rely on wholesale market revenues and renewable energy credits (RECs), both of which have declined over the last four years.

“According to our estimates, remuneration for all large-scale renewable energy projects has halved since June 2017. Future remuneration remains the largest forecast uncertainty for technologies beyond solar PV, for which fixed-price auctions provide revenue stability”, IEA says in the report.

For Vietnam, IEA expects that tenders in the country’s planned auction scheme will mostly target wind capacity, based on the new draft national Power Development Plan (PDP8), which assumes 11 GW of new wind capacity until 2030.

Along with several nearshore projects under development or construction, Vietnam now also has large-scale offshore wind projects planned, including the 3.4 GW Thang Long offshore wind project, whose first phase could go online until 2026.

IEA expects Japan’s wind market to add 8 GW until 2026, almost tripling the cumulative wind capacity by then, with offshore wind expected to reach 1.5 GW over the forecast period “thanks to the government’s ambitious target for offshore wind deployment and supporting measures, including a FIT and sea area designation for construction”.

Installed offshore wind capacity in the United States is forecast to reach almost 8 GW by 2026. For the US, IEA has revised its forecast for the country’s renewable energy capacity up by over 35 percent due to, among other things, larger offshore wind additions expected now that federal and state ambitions are easing “previously onerous permitting challenges, unlocking development pipelines”.

Seabed lease auctions, coupled with tax and certificate incentives and long-term power purchase agreements (PPAs) give developers firm financials for future project development, IEA said. The organization also said that the recently announced federal target of 30 GW of new offshore wind by 2030 would be challenging to meet unless permitting processes continued to be streamlined, vessel constraints addressed, and new areas developed.

Readers can refer to Renewables 2021 – Analysis and Forecasts to 2026 report here.

Article sources: offshoreWIND.biz

 

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