While offshore wind remains a relatively small slice of a renewables sector dominated by onshore wind, its share is expected to grow in the coming years, according to Standard & Poor’s.
“It is quite evident that a majority of the capital dedicated to new renewables [in Europe] will be directed to offshore wind,” Pierre Georges, an S&P senior director, said Tuesday in a webinar on offshore wind held by the ratings agency. He added that around $25 billion would likely be spent on the 24GW of projects in the European pipeline.
Technological advances are likely to push falling costs in the industry even lower, with the technology playing a growing role in the renewable energy sector.
S&P pointed to the UK’s 11 September contract for difference auction, which saw a 50-percent drop in prices from the last competitive auction held in 2015. Global capacity in the sector increased by 18 percent in 2016 and could expand by another 3GW this year, according to the Global Wind Energy Council.
“The projects are taking off as the technology is improving and the costs are expected to decrease even further,” said S&P associate director Luisina Berberian.
The US is lagging behind Europe in offshore wind, but new projects are expected to emerge. So far, projects in North America are concentrated in the North-east and Mid-Atlantic regions of the US.
“In North America as globally, we expect that development is going to depend on the wind regimes, on the site conditions, on the support infrastructure and on favourable regulations,” Berberian noted.
The webinar was held the same day S&P released a report on the evolution of risk in the offshore wind sector. The report stated that the industry’s maturation enabled “greater transparency and a better understanding of the key risks”, supporting further cost reductions.