Offshore wind has the potential to be the next game-changer in the global energy system and could attract as much as US$1 trillion investments by 2040, the International Energy Agency (IEA) said in a new report on Friday.
The global offshore wind market is set to significantly grow over the next two decades, increasing by 13 percent every year until 2040, the IEA estimates in its Offshore Wind Outlook 2019.
Offshore wind capacity around the world is set to jump 15-fold by 2040, becoming a US$1-trillion industry. This would match the capital expenditures on natural gas and coal-fired power capacity over the next two decades, the Paris-based agency says.
Currently, offshore wind accounts for just 0.3 percent of global power generation, but the potential for the industry is huge, according to the IEA’s Executive Director Fatih Birol.
“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,” Birol said in a statement.
“And offshore wind has the potential to join their ranks in terms of steep cost reduction,” the IEA’s executive director noted.
Between 2010 and 2018, the global offshore wind market grew by almost 30 percent, thanks to rapid technology improvements. Europe, especially countries on the North Sea such as the UK, Denmark, and Norway, has been leading offshore wind capacity development and fostered technological advances. Yet, last year, it was China that added the most offshore wind capacity than any other country—1.6 gigawatts (GW), the IEA said.
Europe will continue to be the technology leader through 2040, but China will close the gap. In the United States, state-level targets set the course for rapid growth over the next decade, the IEA said.
Earlier this week, the IEA said that it expects “spectacular” growth in another key renewable energy source—solar power. The IEA sees spectacular growth in new solar power capacity additions over the next five years, which will highlight overall strong growth in renewable energy.