Clarksons Research says 2021 was another record-breaking year for the offshore wind industry, with a record 18.5 GW of new capacity and 3,400 turbines installed, increasing global capacity by 58% to an all-time high of 50.5 GW
Clarksons Research managing director Steve Gordon said offshore wind continues to play a vital role in energy transition. Mr Gordon said China led the way in new capacity additions in 2021 and overtook the UK as the largest offshore wind market, with 16 GW coming online, mostly in the final two months of the year, ahead of the expiry of a government subsidy deadline at the end of the year. New capacity additions were more modest in Europe, as 1.8 GW was fully commissioned, with 17 GW currently under development in the region.
Offshore wind project capex commitments reached US$44.6Bn in 2021, the second highest total on record, with a number of significant projects reaching a final investment decision, including the first utility scale offshore wind project in the US, Vineyard Wind (806 MW). In Europe alone, US$18.7Bn of project capex was committed to offshore wind projects, compared with the US$10.3Bn committed to offshore oil and gas projects.
The offshore wind vessel market continued to evolve, reaching nearly 1,100 vessels by year end. Global wind turbine installation vessel utilisation averaged 83% in the year, up 6% year-on-year, while exceptional demand for vessels in China consistently kept utilisation at more than 90% in the second half of the year.
Clarksons said rates also responded, with the average day rate assessment for a third-generation turbine installation vessel in Europe up 18% over the year, in addition to increases in the construction/service operation vessel (CSOV) market. Day rates quadrupled off Guangdong in China in the middle of the year.
Record newbuild investment developed during 2021, with more than US$4Bn of orders placed and increasing focus on alternative fuels and energy-saving technology. This included more than 17 (plus 9 options) wind turbine installation vessel newbuild contracts placed, totalling ~US$2.5Bn, the highest yearly total on record. In addition, 15 CSOVs were ordered, totalling ~US$0.8Bn, also the highest number on record and 39 CTV contracts placed.
Clarksons noted that OEMs and windfarm developers came under pressure from rising material costs in 2021. Chinese steel prices averaged US$827/tonne in the year (up 47% year-on-year), while annual average copper prices increased by 51% to US$9,317/tonne.
The market analysts noted that lower than average wind speeds in much of Europe also limited power output from offshore windfarms, reducing the volumes that operators could sell into the market. Offshore windfarms in Germany generated 23.5 TWh of power in 2021, compared with 26.9 TWh in 2020.
Power prices in Europe surged in 2021, due to a tightness of gas supplies and lower average wind speeds. Day ahead electricity prices averaged €97.75/MWh (US$110.88/MWh) in Germany in 2021, more than triple their level in 2020, and €103.55/MWh in the Netherlands (up 236% year-on-year).
“In 2022, we are projecting a healthy 9.5 GW of offshore wind capacity to come online, involving 1,400 turbines, bringing the fully commissioned global total to 60.0 GW,” Mr Gordon said. “Offshore wind capex commitments are expected to total some US$55Bn, just below the record of US$56Bn in 2020.
“Our longer-term projections suggest the global offshore wind sector may reach 712 windfarms involving over 29,000 turbines and 235 GW by 2030 (current capacity is 250 windfarms, 10,800 turbines and 50.5 GW).
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