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The global floating wind power market size was USD 0.67 billion in 2019 and is projected to reach USD 59.24 billion by 2027, exhibiting a CAGR of 82.2% during the forecast period.
Floating wind power is an offshore wind turbine mounted on a floating structure that allows the turbine to produce electricity in water depths where fixed-foundation turbines are not feasible. Offshore wind power plays a significant role in achieving the renewable target in most countries around the world. The floating wind power market is driven by the increasing energy demand and adoption of renewables for energy production.
Floating wind farms have already been proven beneficial in harsh environmental conditions and hold immense opportunities for harnessing a huge amount of power. Countries such as China, the U.K., Germany, Belgium, and Denmark are among the leading geographies in the global market. In terms of new offshore wind power installation, the United Kingdom, China, and Japan have shown tremendous growth in 2019. The trend is going to follow as per their latest renewable energy investment plans.
The global market is set to grow as the demand for floating wind installation is on the rise due to the availability of advanced technology, operational advantages, and turnkey solutions provided by various service providers. This, in turn, will encourage many governments, institutions, and offshore operators to experience the potential of floating wind power. The rising demand for clean energy is also likely to boost the global market size from 2020-2027.
COVID-19 Pandemic has Caused Energy Demand to Plummet With a Historic Downfall
The ongoing outbreak of the COVID-19 pandemic has impacted the market growth. Emerging economies such as China, the United Kingdom, Japan, and the United States are considered to be the major countries for establishing new floating wind power plants. But, the coronavirus has taken a toll on them. As per the International Energy Agency (IEA), coronavirus has caused the energy demand to plummet with a historic downfall, whereas IEA has projected a fall of 6% in the global energy use in 2020. During the COVID 19 crisis, renewables have been supported by favorable policies, less expensive sources, favoring cheaper and cleaner sources, thereby resulting in renewable energy being the cheapest source of energy. According to an IRENA report, the cost of solar energy has fallen by 82% compared to the last ten years.
During the COVID-19 pandemic, governments introduced a full-lockdown, which resulted in depressed electricity demand at historical levels in many countries and generated an oversupply of available power capacity. For instance, China’s National Development and Reform Commission (NDRC) extended its 5% electricity price cuts until the end of 2020 to help companies affected by COVID-19. Also, China Life Insurance signed an agreement with State Power Investment Corporation (SPIC) to set up a fund of USD 1.1 billion for clean energy. Additionally, the outbreak of coronavirus has impacted the expansion of the electricity distribution network in developing countries. It is set to directly hamper the floating wind power market growth during the projected period.
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Offshore Wind Energy Targets to Attract Huge Investments is a Prominent Trend
The increasing awareness for achieving green energy targets set by various countries has enabled the growth of floating offshore wind power. This has led offshore wind to emerge as a huge opportunity for every country to access such wind farms. Countries are setting their targets to achieve the green energy revolution, which would attract huge investment opportunities. For instance, the United Kingdom has set a target of 30GW offshore wind energy by the end of 2030. The German Climate Cabinet has set the goal of installing 20GW of offshore wind power by 2030, starting from 15GW in 2019. Similarly, China has a target of achieving 30GW offshore wind energy by 2020 from 5GW installed capacity in 2015. Hence, rising supportive initiatives for expanding offshore wind power is likely to bolster the market growth during the forecast period.
Operational Advantages of Floating Wind Over Fixed Offshore Structure is a Vital Trend
The adoption of floating wind power is expected to rise owing to its operational advantages over the fixed structure installations of wind farms. Floating offshore wind projects have lower foundation requirements and deliver a higher energy yield. Floating wind farms are capable of functioning in harsh atmospheric conditions and can withstand the strongest wind flow. This is attributed to the base structures that are more flexible and hence can ease the turbine setup process. These installations also offer environmental benefits compared to fixed bottom structures due to their less invasive activity on the seabed during installation. It is one of the most vital floating wind power market trends that would fuel growth.
Increasing Shift towards Renewable Power Generation to Drive Growth
The increasing need to curb carbon emissions has forced countries to adopt renewable sources of energy. It has further led to the adoption of solar and wind as major primary renewable energies. The increasing adoption of onshore wind farms has opened doors for the offshore wind power industry that can harness a tremendous amount of wind energy, which goes wasted. This, in turn, is expected to accelerate the offshore floating wind energy market growth. The rising investments in renewable energy are also set to drive wind energy market growth. As per the Global Trends in Renewable Energy Investment 2019 report, the global investment in renewable energy in 2018 increased to USD 272.9 billion, the fifth successive year. It has exceeded USD 250 billion.
Rising Investments for Sustainable Energy Development to Boost Growth
As per the latest report by the International Energy Agency (IEA), currently, renewable sources account for around 28% of the total electricity generation across the globe. This drift towards renewable sources is expected to increase exponentially in the coming years, along with the rising investments for the development of sustainable energy. These are the key factors attributed to the growth of the wind energy market in the forthcoming years. The depleting resources of petroleum products have raised concerns regarding fulfilling the increasing population's energy needs across the globe, thereby enabling considerable research and development activities for finding alternative technologies.
Floating offshore wind stands as the untapped source of energy that holds promising opportunities across every region. For instance, in January 2019, the Asian Development Bank invested USD 500 million for the distribution network modernization program and regional energy transmission and dispatch enhancement program under sustainable energy development projects in Uzbekistan. Offshore wind turbines rooted to the ground are limited to 50m depth overcome by floating wind farms that provide the solution for tapping the wind energy. They do so by eliminating various constraints of depth and turbine setups. Hence, considerable investments for floating wind power across different regions are expected in the coming years, which will drive the market growth.
High Initial Investments May Restrain Market Growth
The increasing focus on low-cost technologies for energy production instead of conventional power sources would enable the growth of renewable energy. The requirement of new grid infrastructure and more distribution and transmission lines would add to the cost. The cost incurred in its initial phases includes pre-development of wind farms, technical and economic feasibility, project management, legal authorization, surveys, engineering activities, and similar other parameters. Also, the environmental barriers that can occur during the construction of offshore wind farms can restrain the market's growth in the coming years.
Deep Water Segment to Hold Larger Share Backed by Its Possession of Numerous Advantages
Based on the water depth, this market is segmented into shallow water (< 30m depth), transitional water (30m - 60m depth), and deep water (> 60m depth). The deepwater segment is expected to hold a larger market share due to the wide advantage of floating wind farm installation in deepwater. Major advantages of this type of installation also include the wide availability of land with strong wind resources and proximity to populated centers. In some countries with a narrow continental shelf, floating foundations are considered to open doors to new opportunities for large-scale deployment of wind farms, thereby ticking the demand for floating wind power.
The shallow water and transitional water floating wind turbines act as a preferred alternative for fixed bottom foundations ranging from a depth of 25m to 50m. These offer numerous advantages such as less capital, environmental benefits, and readily available installation vessels. These factors are expected to boost their installations at depths up to 60m.
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Above 5MW Segment to Grow Significantly Fueled by Rising Number of Planned Wind Farm Construction
Based on the capacity, the market is categorized into up to 3 MW, 3 MW- 5 MW, and above 5 MW. Generally, the deployment of a wind farm depends on the power which is expected in return and the available capital. Since heavy capital is a prerequisite for a wind farm, a higher capacity wind farm is considered a feasible investment, looking at the future returns. Following the same trend, new wind farms that are being sanctioned for construction are of a higher capacity, i.e., above 5 MW. Therefore, this segment holds a larger portion of the market share.
Since 2013, various pilot projects are being carried out globally, and most of them hold a capacity of 2MW to 5MW. The demonstration projects in Japan, the U.K., Scotland, and Germany is a perfect example. Such projects are expected to come up in countries that hold potential but still stand unexplored in the context of the floating wind power market. This will drive the investment for the up to 3MW and the 3MW-5MW segments of the market in the upcoming years.
Japan Floating Wind Power Market, 2016-2027 (USD Billion)
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Japan holds the largest floating offshore wind power market share in the current year. As per the Japan Wind Power Association, the country aims to expand its installed offshore wind capacity to 10 gigawatts (GW) in 2030 and 30-45 GW in 2040, which will further attract a large number of investors. The United Kingdom also has the world's largest offshore floating wind farm (OWF) under construction and is expected to be in operation by 2020. The 50MW Kincardine offshore wind farm is located in Scotland, which is also home to the current biggest floating 30MW wind floating wind farm.
Following Japan, the United Kingdom, France, the United States, and Sweden are some of the other countries that possess installed floating wind farms at present. Looking at the planned installation of floating wind power, other countries such as Germany, Spain, and South Korea are expected to emerge as influential stakeholders in the market during the forecast period.
The market is anticipated to showcase a tremendous shift as China is expected to become the leader. In 2018, the country installed approximately 40% of the world's offshore wind power, paving other countries' way. In addition to that, the country has lots of under-construction and upcoming projects lined up in the forthcoming years. Various countries in Europe are the world leaders in wind energy production and have utilized its maximum potential. Although some European countries have not been a feature on the list of top wind energy producers, wind energy satisfies individual countries' energy requirements.
Companies Focus on Mergers & Acquisitions and Partnerships to Gain Competitive Edge
Various regional and international players are consistently working on formulating advanced strategies to take a competitive advantage. Many companies are forming merger & acquisition, as well as partnership & collaboration strategies to enable market growth. For instance, in January 2020, Siemens Gamesa acquired Senvion’s European Service assets and intellectual property (IP). This led to the addition of approximately 9 GW service fleet and operations in 13 countries.
An Infographic Representation of Floating Wind Power Market
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The research report provides an elaborative analysis of the global market dynamics and the competitive landscape. Various key insights presented in the report are the trend analysis, recent industry developments in the
the global market, such as mergers & acquisitions, the regulatory scenario in crucial countries, macro, and microeconomic factors, SWOT analysis, key industry trends, competitive landscape, and company profiles.
Value (USD Billion) and Volume (MW)
By Water Depth
Fortune Business Insights says that the global market size was USD 0.67 billion in 2019 and is projected to reach USD 59.24 billion bRegistering a CAGR of 82.2%, the market will exhibit steady growth in the forecast period (2020-2027).y 2027.
Registering a CAGR of 82.2%, the market will exhibit steady growth in the forecast period (2020-2027).
In 2019, the Japan market value stood at USD 0.22 billion.
The deepwater segment is anticipated to lead this market during the forecast period.
Significant investments for sustainable energy development and an increasing shift towards renewable power generation are the key factors driving the market.
Siemens Gamesa Renewable Energy S.A., MHI Vestas Offshore Wind, Senvion S.A, Adwen GmbH, ABB, GE, Ming Yang Smart Energy Group Co., Nordex SE, GoldWind, Envision Energy, Suzlon Energy Limited, and Hitachi are the major players operating in the market.
Japan dominated the market in terms of share in 2019.
Floating wind power produces electricity with the help of wind turbines. It can harness the most from clean offshore power. It is a cheap solution to build and is easy to work with. Hence, it offers a reliable and efficient source of power, enabling the growth of renewable energy.
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