Market Trends of United Kingdom Offshore Wind Energy Industry
This section covers the major market trends shaping the UK Offshore Wind Energy Market according to our research experts:
Floating Foundation Segment to Dominate the Market
- In the United Kingdom, Wind energy capacity has reached 27.3 GW in 2021, which is higher than 49% of total wind energy production in 2012. The offshore wind energy projects have witnessed a significant rise in the last few years. Offshore wind energy capacity has increased from 2.9 GW in 2010 to 12.7 GW in 2021.
- On 17th January 2022, the United Kingdom government awarded 17 offshore wind projects in Scotland. The total capacity of projects is expected to be more than 24 GW. The company that completed bidding are Scottish Power Ltd, BP plc., Shell Plc, Ocean Winds, Vattenfall AB, SSE, Falck Renewables S.p.A, DEME, BayWa r.e. AG, Northland Power Inc., and Magnora Offshore Wind. Of these 17 offshore wind energy projects, around ten projects have a floating foundation which accounts for more than 14.7 GW of wind energy production capacity.
- Furthermore, a floating foundation provides better access to resources; as the floating foundation projects are located in deep water, in such areas, the presence of stronger and more consistent winds increases the efficiency of the wind turbine. Increased efficiency also leads to the lower power generation cost.
- The floating foundation has a less environmental impact due to less infrastructure development in an offshore location. Furthermore, floating wind turbines are easy to install as there is no need to build the platform, saving the installation cost and future maintenance cost.
- The government announced that it is going to invest more than USD 42.57 million in floating wind projects and also expects more than USD 37 million from private companies. This investment is expected to achieve the government's 40 GW of offshore wind energy by 2030.
- Therefore, due to these points, the floating foundation type segment is expected to witness higher demand in the offshore wind energy market during the forecast period.
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The Government's Supportive Policies to Promote Offshore Wind Energy Projects
- The United Kingdom is one of the leading countries in renewable energy project installation. The country will contribute more than 4% of total global renewable energy generation in 2020.
- Furthermore, according to the BP Statistical Review of World Energy 2021, in 2020, the renewable power generation in the United Kingdom was around 127.8 TWh. which is much higher than that of 2010, when the renewable energy power generation was about 22.6 TWh. Wind energy contributed more than 75 TWh in total renewable energy generation in 2020.
- This increase in the number of renewable energy projects in-country indicates a rise in energy security concerns. For instance, Covid -19 pandemic and during the war between Rasia and Ukraine, the United Kingdom is developing new energy resources to be less dependent on the other country for its energy needs.
- Thus, the government heavily invests in renewable energy resources to achieve energy security. Notably, the wind energy sector witnessed higher investment than the solar or other types of renewable energy projects. This can be ascribed to wind energy projects' higher power generation potential.
- According to the IRENA, In 2010, the total wind energy capacity in the United Kingdom was around 9.03 GW, and it increased to 27.1 GW in 2021. Moreover, the United Kingdom government has set a roadmap for the country to achieve net-zero emissions by 2050. Thus to achieve this ambitious target, the United Kingdom would rely on offshore wind projects. Furthermore, the government has set the target to reach 40 GW of installed capacity by 2030 and 100 GW by 2050.
- To complete the net-zero emission target, In January 2022, the government has invested more than GBP 60 million in offshore wind. Furthermore, the government is also planning to invest more than GBP 160 million in developing and building new large-scale floating offshore wind ports and factories in the United Kingdom.
- Due to these initiatives, the offshore wind energy market in the United Kingdom is expected to grow with a significant CAGR during the forecast period.
