'Unrealistic' global offshore wind expansion target would require $27 ... - Reuters
'Unrealistic' global offshore wind expansion target would require $27 billion by 2026, says Wood Mackenzie | Reuters
'Unrealistic' global offshore wind expansion target would require $27 billion by 2026, says Wood Mackenzie
Turbines of the WindFloat Atlantic Project, a floating offshore wind-power generating platform, are seen 20 kilometers off the coast in Viana do Castelo, Portugal, September 23, 2021. Picture taken September 23, 2021. REUTERS/Violeta Santos Moura/File Photo Acquire Licensing Rights
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Aug 17 (Reuters) - Government targets to increase wind power installations would see annual capacity additions reach 80 gigawatts (GW) per year by 2030, requiring $100 billion in secured investment in the supply chain by 2026, Wood Mackenzie said in a report.
The research and consultancy firm forecast annual capacity is more likely to increase by 30 gigawatts (GW) a year by 2030, which would require $27 billion of secured investment by 2026.
"The supply chain is struggling to scale up and will be an impediment to achieving decarbonisation targets if change does not happen," said Chris Seiple, vice chair, power and renewables at Wood Mackenzie.
"Nearly 80 GW of annual installations to meet all government targets is not realistic, even achieving our forecasted 30 GW in additions will prove unrealistic if there isn't immediate investment in the supply chain," Seiple said.
Wood Mackenzie noted that the low profit margins on offshore wind production and uncertainty about project timings resulting in very different supply-chain needs are making it hard to drum up investment in the sector.
According to the Statistical Review of World Energy report in June, global wind and solar power grew to a record share of 12% of power generation last year, surpassing nuclear.
Target setting and plans for power market infrastructure to support offshore wind need to extend beyond 2030 to scale up the offshore wind supply chain, analysts at Wood Mackenzie said.
(This story has been corrected to say that an investment of $100 billion, not $27 billion, would be required by 2026 in the headline and paragraphs 1 and 2)
Reporting by Anushree Mukherjee in Bengaluru; Editing by Susan Fenton
Our Standards: The Thomson Reuters Trust Principles.
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Related Knowledge Center: Offshore wind energy
Over the next decade, U.S. offshore wind power is expected to grow from a single 30-megawatt wind farm off Rhode Island to more than 2,000 MW of capacity along the Atlantic Seaboard. There are contracts for wind power off the coasts of Massachusetts, Connecticut, New York, Maryland, New Jersey, Rhode Island, and Virginia.
The National Renewable Energy Laboratory has estimated the United States has over 4,000 gigawatts (GW) of offshore wind potential, enough to power the country four times over.
The growth in part being spurred by state solicitations, including in New York, where then-Gov. Andrew Cuomo (D) set a commitment of 9,000 MW of offshore wind by 2035, and in Connecticut, where in June 2021, Gov. Ned Lamont (D) signed legislation authorizing the construction of 2,000 MW of offshore wind by 2030.
The offshore development is also being driven by an investment tax credit set to end in December 2019 and is equal to 12 percent of expenditures. U.S. Sens. Susan Collins (R-Maine) and Tom Carper (D-Del.) have introduced a bill to extend the tax credit for up to eight years.
The Interior Department has held eight competitive lease sales that resulted in 15 offshore wind leases over 1.7 million acres that has the potential for 21 GW of capacity. In February 2022, the Bureau of Ocean Energy Management completed a bidding process that realized $4.37 billion for 488,000 acres across six lease areas in federal waters off New York and New Jersey.
Projects have also been proposed off the Southeast coast, off California and Hawaii, and for the Great Lakes.