Clarksons: Record Growth in Wind Generation and Vessel Orders in 2021
2021 was a record year in the development of the offshore wind power generation industry. Clarkson Research is reporting that not only were there a record number of start-ups, increasing global capacity to its highest levels, but that it also spurred a record newbuild investment for the ships required to execute the plans.
Steve Gordon, Managing Director of Clarksons Research commented that 2021 saw “further record capacity growth for offshore wind as it continues to play a vital role in the global energy transition. Our energy transition modeling suggests that offshore wind could reach six to nine percent of the total global energy supply by 2050.”
While the outlook remains very strong with record investments going into the sector, Clarksons’ data, however, shows that offshore wind is a small percentage of the current global energy supply. As of the end of 2021, they calculate that offshore wind reached approximately 0.3 percent of the total global energy supply.
“China led the way for new capacity additions and overtook the U.K. as the largest offshore wind market,” commented Gordon. According to the data, China brought online 16 GW in 2021 with most of it coming in the last two months of the year. Europe, by comparison as a whole only commissioned 1.8 GW during the year, but has 17 GW currently under development. That is not counting large new awards such as ScotWind, which at the beginning of this week announced initial awards for 17 new projects that are projected to provide as much as 24.8 GW of additional power generation by the end of this decade.
Capital expenditures for offshore wind power projects remained strong in 2021, with commitments reaching $44.6 billion in 2021, which according to Clarksons is the second-highest total on record. Project CAPEX in Europe alone they point out reached $18.7 billion in 2021, and they also highlight the industry’s progress, for example with the first utility-scale offshore wind projects in the U.S., Vineyard Wind, placing orders for its turbines as it moves towards full construction.
The growth in installation projects, as well as projects under development, is continuing to drive the growth of the maritime sector dedicated to offshore wind farms. Clarksons reports nearly 1,100 vessels were supporting the sector by year’s end. Driven in part by China’s rush to complete projects in the second half of 2021, utilization for turbine installation vessels, for example, rose six percentage points to 83 percent for the year. In the second quarter, however, off China, utilization was over 90 percent with dayrates for installation vessels as well as support vessels both showing strong increases.
There were also a record number of newbuild orders placed in 2021. Clarksons’ data shows a total of 17 WTIV orders placed valued at approximately $2.5 billion and an additional nine options having been booked for further construction. They also recorded 15 C/SOV orders, also a record, and 39 CTV contracts. They calculate the total value of the new orders at over $4 billion in 2021.
“In 2022, we are projecting a healthy 9.5 GW of offshore wind capacity come online (involving 1,400 turbines), bringing the fully commissioned global total to 60.0 GW,” said Gordon. “Offshore wind CAPEX commitments are expected to total some $55 billion, just below the record of $56 billion in 2020.”
Clarksons’ longer-term projections call for continued strong growth for the remainder of the decade. They are forecasting that the global offshore wind sector may reach 712 farms involving over 29,000 turbines and 235 GW by 2030. That compares with a current capacity of 250 farms globally with 10,800 turbines providing a current total generating capacity of 50.5 GW.