Wood Mackenzie says the global offshore wind operation and maintenance (O&M) market is expected to reach US$12Bn by 2029
According to Wood Mackenzie’s analysis, Europe remains the largest O&M market by region, reaching a level of US$6.6Bn (€5.5Bn) by 2029. Rapidly expanding markets in Asia and the US could bring new challenges and opportunities for the industry as well as international investors.
Wood Mackenzie senior analyst Shimeng Yang said, “We expect to see O&M strategies evolve to fit the new market landscape characterised by large turbines and waning subsidies. As the O&M market grows, these changes will open up opportunities for existing and new players in the offshore wind sector.”
The global offshore wind O&M market is still a relatively young one, said Wood Mackenzie, and lacks experience in long-term O&M issues and failures. Currently, only 1.8 GW of global capacity has been operating for more than 10 years. By 2029, this figure increases 11 times to 20 GW. By then, 90% of the operational fleet – equivalent to 165 GW – will still be less than 10 years old.
Wood Mackenzie said that, as manufacturers dedicate more resources to O&M services, the ageing turbine fleet represents a significant opportunity for independent service providers as well as inhouse expertise.
Wood Mackenzie research associate Finlay Clark said innovative O&M practices would be required as project scale continues to grow. China, which is set to become the single largest offshore wind O&M market globally, “must tread carefully,” Mr Clark said.
The country is expected to overtake the UK’s position as world’s largest offshore wind market, with 41 GW of growth throughout the 2020s, leading to a total of 49 GW capacity, equivalent to US$2Bn (€1.7Bn) of opex opportunities by 2029.
Mr Yang said, “China’s young and rapidly growing fleet will require sweeping changes in asset management strategy to deal with massive uptake throughout the 2020s.”
China’s enthusiasm for offshore wind has led to a glut of installations. Coupled with the expiration of national subsidies for wind power, offshore operators in China will face considerable operational challenges to ensure the profitability of their projects, said Wood Mackenzie.
With economies of scale and improved efficiency of asset management and O&M services, global average opex per megawatt is expected to decline 20% between 2020 and 2029, on average.
Europe’s growing use of service operation vessels, remote operation innovations (such as drones), cameras, new digital technology and the impact of offshore wind clustering have resulted in average opex per megawatt declining by 44% over the last eight years.
“These factors will continue to drive opex reduction beyond 2020, further powered by machine learning and deep learning from big data, as well as robotics and autonomous systems that will partially offset labour costs,” Wood Mackenzie concluded.
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