Wood Mackenzie: Global Offshore Wind Sector to Grow Sevenfold by 2032

Market Outlooks

April 12, 2023, by Adrijana Buljan

“After needing more than 40 years to reach one TW of installations, the wind industry will reach the next TW of installations within the next eight years, a significant acceleration of growth”, says Luke Lewandowski, Research Director at Wood Mackenzie. This will also include the global offshore wind sector, which the analyst firm expects to grow sevenfold by 2032 and account for a 26 per cent share of total capacity over the next decade.

Illustration; Dafeng Phase II; Photo: China Longyuan Power Group

According to the latest market outlook from Wood Mackenzie, the next ten years will see an intensified focus on offshore wind as the sector matures and technology innovation and supply chain development help make offshore development more accessible in different regions.

The company’s ten-year outlook forecasts additional offshore wind capacity in 30 countries, but European countries and China will still account for 81 per cent of global offshore capacity additions.

At the end of 2022, China was again at the top of the list of countries with newly installed offshore wind capacity, after first overtaking the UK in that regard in 2021.

Looking at new wind energy capacity this year, Wood Mackenzie expects a strong 2023 both globally and in China as the leading country, after overall lower capacities were added last year and some projects were delayed into 2023 inflation and supply chain disruption.

“If we take a closer look at China, new grid-connected capacity in the region dropped 21% year-over-year (YoY) in 2022, primarily due to a strict lockdown policy that significantly limited capacity additions in Q4”, Lewandowski said. “The projects unable to connect in Q4 will help boost the outlook in China for 2023”.

In China, the wind energy market will rebound strongly in 2023, with developers nearly doubling the amount of annual capacity YoY, on the back of a record year for new wind turbine orders in the country. Over the ten-year outlook, annual capacity additions in China will average 80 GW and account for half of the new capacity globally, Wood Mackenzie says.

Europe will add more than 343 GW of offshore and onshore wind capacity by 2032, with offshore wind to account for 39 per cent of the new capacity.

“For the US, developers await tax credit eligibility guidance from the US Treasury, with the ongoing uncertainty impacting near-term installations. However, with policy clarity, approval and investment in transmission projects, and development of the offshore market’s nascent supply chain, annual additions will intensify and average 20 GW per year from 2026 through 2032”, Lewandowski added.

The Middle East and Africa will also see a rise in wind energy installations powered by demand for green hydrogen production, resulting in 72 GW of total capacity additions over the ten-year forecast in Wood Mackenzie’s report.

“Unprecedented decarbonization and energy security policy support in the US and Europe will help the industry recover from the impact of the COVID-19 pandemic. These markets will also experience a renewed focus on repowering in order to revitalize the assets that were constructed in the early years of the industry’s journey to 1 TW”, Wood Mackenzie’s Luke Lewandowski said.