February 13 (Renewables Now) - The decade leading to 2028 is looking good for offshore wind, with global capacity projected to grow by more than seven-fold, but the industry players will have to watch out for four trends that will emerge in the post-2020 era.
According to Rolf Kragelund, the Wood Mackenzie Director of Global Offshore Wind, floating offshore wind installation rush, lack of policy frameworks, possible lukewarm returns and merchant risks will influence decisions in the near future.
Floating offshore wind is gaining more supporters, with more than 350 MW of demonstrators lined up for deployment by 2022, Kragelund has said.
However, the interest is still coming from within the industry, which needs to see clear policies from governments so that floating offshore wind can commercially thrive.
Non-existent regulatory framework for offshore wind - anywhere except in nine countries which currently have them, according to Kragelund, is a great source of uncertainty for global pipelines.
Strong competition could also put a break on the industry growth.
“Margin squeeze is already a theme in the value chain, particularly following a steep decline in bid prices. Growth and spread of demand, combined with local content policies and larger components, will pile further pressure on the supply chain,” the analyst says.
In the 2020s, the offshore wind industry is expected to take the merchant route to the market, which will come with its own set of challenges.
Exposure to merchant prices and risk associated with it are likely to transform the fund-raising side of offshore wind project development. Kragelund says that developers will need “a better understanding of merchant risk exposure and captured prices for offshore wind” to get ahead in merchant markets.