Investments in offshore wind projects in new and emerging markets next year will result in offshore wind gaining a greater share of the total wind power market globally, according to the latest report from Fitch Solutions.
There are currently over 66 GW of offshore wind in pre-construction or construction out of almost 162 GW of wind power projects in these stages, and most of them are in Western Europe region. However, from 2021 onwards, countries outside this region will help drive growth with the United States (9.1 GW), Taiwan (5 GW), South Korea (3.4 GW) and Poland (2.5 GW) as the most significant in this context.
“In the Asia region, we highlight Japan as a key market to watch. While only having a project pipeline of 1.4GW in our [Key Projects Database], in November 2020 the Japanese government launched an auction for offshore wind projects which points to strong growth potential for the sector in the country” , Fitch Solutions said.
To remind, Japan launched its first-ever auction for fixed bottom offshore wind projects last month, which will be built at three zones within the country’s General Common Sea Area. The tender is open until 27 May 2021.
In the Americas region, Brazil is another key market to watch, according to the report, since Brazil has over 16 GW of offshore capacity planned as of end-2020, with major oil & gas companies entering the offshore wind market.
In 2018, Brazilian oil & gas major Petrobras signed a Memorandum of Understanding (MoU) with Equinor to jointly develop the offshore wind energy segment in Brazil. Equinor recently announced it had submitted an application to the Brazilian Institute of Environment and Renewable Natural Resources (IBAMA) for an environmental impact assessment needed to further look into the possibility of developing an offshore wind project in the country.
According to Fitch Solutions’ report, since Shell and Repsol are also present in the country and are involved in offshore wind projects in other markets, it is expected they would also look toward offshore wind investments in Brazil as well.
Globally, the report sees increased growth in capacity in 2021 as projects that were delayed across 2020 will be accelerated next year, particularly those with tight commercial operation deadlines.