2023 ‘a record year’ for offshore wind, with another one expected

TGS - 4C Offshore said the figure ‘represents a strong recovery’ compared to 2022, when only 0.8 GW of offshore wind capacity reached a final investment decision (FID).  

The energy data and market intelligence company’s latest Global Market Overview also states that 2024 could be another record year, with up to 13 GW likely to reach FID.

FIDs were completed for eight European projects in 2023, totalling 9.3 GW, with Hornsea 3 closing at year end. In the Asia Pacific region, 2.3 GW reached FID in Taiwan and South Korea, and 704 MW in the US (the Revolution Wind project).

“The US is currently experiencing record offtake activity, with five auctions in process. Candidates include new and existing projects, vying for more favourable terms,” said TGS - 4C Offshore. 

“Overall, offtake needs to make up ground, according to the report, which states that offtake contracts were down almost 2 GW to 9.5 GW in 2023, primarily driven by a ‘no-show’ in the UK’s contract for difference auction.

“However,” said TGS - 4C Offshore, “of these offtake contracts that were awarded, the price is markedly higher than in previous years – an average of €105/MWh (US$115/MWh) in 2023 – reflecting recent inflation, supply chain constraints and interest rates on the cost of energy.”

The company expects offtake contracts to remain an area of focus over the next two years. TGS - 4C Offshore director of research Richard Aukland said, “Despite ongoing project delays and cancellations, 2023 still managed to produce record progress in offshore wind. 

“With high activity and a significant year of offtake auctions expected in 2024 as countries work to hit their 2030 installation targets, decisions taken in the next 12 months will translate into record construction activity later in the decade.”

TGS - 4C Offshore says the offtake auction schedule continues to look healthy, with 47.5 GW slated for 2024 (40 GW in Europe). It is a similar story for leasing rounds, with 33.5 GW of leases going under the hammer, in Australia, Belgium, Colombia, Denmark, Estonia, Finland, France, India, Japan, Lithuania, Netherlands, Norway, Portugal, Spain, the UK, Uruguay and the US. 

The company said the rate of lease activity has ramped up in the last two years, with 43.8 GW of sites awarded in 2023, one third of which was for floating wind.