Offshore wind should become a $1 trillion business by 2040, the International Energy Agency (IEA) said Friday, with global capacity set for a 15-fold increase, Kallanish Energy reports.
According to the IEA’s Offshore Wind Outlook 2019, investment last year in the sector neared $20 billion, compared to under $8 billion in 2010.
With today’s investment plans and policies, the IEA said the offshore market would grow by 13% annually, “passing 20,000 megawatts of additions per year by 2030.” This growth needs capital spending of $840 billion across the next two decades, CNBC reported.
According to the IEA, if worldwide goals relating to climate and sustainability are to be met, then additions in capacity will need to approach 40,000 MW a year during the 2030s, which would nudge cumulative investment to more than $1.2 trillion, CNBC reported.
A drop in costs, supportive governments and technological innovations would help drive progress, the IEA said.
Global offshore wind capacity currently stands at 23,000 MW, according to the IEA, with 80% of this based in Europe. The agency added roughly 150 new offshore projects were slated for completion during the next five years.
“In the past decade, two major areas of technological innovation have been game-changers in the energy system by substantially driving down costs: the shale revolution and the rise of solar PV,” Fatih Birol, the IEA’s executive director, said, in a statement Friday. “And offshore wind has the potential to join their ranks in terms of steep cost reduction.”
At the moment, capacity in the European Union is nearly 20,000 MW and, if current policy is maintained, this could increase to almost 130,000 MW by 2040, the IEA said.
If goals on carbon-neutrality are met, it will rise further, hitting roughly 180,000 MW.
China has the potential to become a major player in the sector. The IEA said that offshore wind capacity there would hit 110,000 MW by 2040, up from 4,000 MW today. Again, if policies are shifted to “meet global sustainable energy goals” capacity could exceed 170,000 MW.
“Offshore wind currently provides just 0.3% of global power generation, but its potential is vast,” the IEA’s Birol said.
“More and more of that potential is coming within reach, but much work remains to be done by governments and industry for it to become a mainstay of clean energy transitions,” he added.
This post appeared first on Kallanish Energy News.