In Record Offshore Wind Market, Brazil Leads the Pack for New Projects
As countries around the world implement ambitious environmental goals, adoption of renewable energy is setting new records. New research from The Renewables Consulting Group (RCG), an ERM Group company, finds that global offshore wind development capacity grew by a whopping 89 percent in 2021.
About 200 GW of new offshore wind projects were announced in established markets like the UK and Netherlands and new markets such as Italy and Australia.
Surprisingly, according to the RCG’s 2021 Global Offshore Wind Annual Report, Brazil is number one in offshore wind investments with a total surpassing 97 GW, all in development.
UK ranks second with a total of 83.6 GW, including 10.5 GW in operation and 63.3 GW under development.
Vietnam takes the third position, followed by China, which in 2021 installed a record breaking 8 GW of offshore wind capacity in a single year. China now surpasses the UK to become the largest operational offshore wind market with 16 GW.
The expiry of China’s feed-in-tariff (FiT) last December was a major incentive to getting offshore wind projects completed in time. For an offshore wind developer to qualify for the FiT, their projects had to be commissioned by the end of 2021. Incentives such as FiT have made offshore wind development in China relatively inexpensive compared to other parts of the world.
The phenomenal gains made in the offshore wind market are underpinned by project leasing, particularly in Europe. Scotland recently allocated almost 25 GW of capacity in the ScotWind Offshore wind leasing, its first round in a decade.
In the US, nearly half a million acres of the Atlantic Ocean have been leased out for offshore wind development. The lease round completed earlier this year generated $4.37 billion in bid revenue, becoming the highest-grossing competitive offshore energy lease sale in history, including oil and gas lease sales. The auctioned sites are located in the New York Bight area, a narrow stretch of sea that runs between Long Island and southern New Jersey.
“The findings contained in this year’s Offshore Wind Market Report clearly demonstrate the importance of offshore wind on a global scale. Several leasing opportunities have culminated in developers securing routes-to-market- bolstering marketplace confidence amongst governments, institutions, investors and developers. With offshore wind continuing to emerge in new markets, it is clear that many decision-makers envision offshore wind as the key fulcrum in their low- carbon energy ambitions,” commented Andrew Cole, RCG Partner and Global Practice Lead.