Offshore wind power claiming a larger share of European renewables market
Offshore wind still accounts for only about 3.5 percent of the global wind market. But in Europe, where many of the prime onshore sites have already been developed, it is growing far faster than its land-bound counterpart.
Over the past three years, yearly installed capacity from offshore wind turbines has more than doubled in Europe, reaching 866 megawatts in 2011. Over the same period, new onshore generation rose by just 10 percent.
“Offshore wind is still just a niche industry, but it’s a growing niche,” said Steen Broust Nielsen, director of the renewable energy consulting firm Make Consulting. “It will count for 8 percent of the global [wind] market in 2016.
“If I were to invest in the wind industry, I would choose a company with a market position in the offshore sector or emerging markets.”
That growth is driven by Europe’s significant offshore wind potential — the North Sea alone has the potential to provide Europe’s electricity needs 10 times over — along with policies in the European Union to reduce carbon emissions and promote renewable energy.
“We’re increasingly seeing utilities going for wind power because it’s an insurance against rising fuel prices,” said Christian Kjaer, chief executive of the European Wind Energy Association. “It’s like if you have an investment portfolio — wind energy is a German government bond in a risk perspective. It removes carbon and fuel-prices risk, and that will be a large driver going forward.”
The growth of offshore wind power is still held in check, however, by higher materials and installation costs. It is currently twice as expensive to produce a kilowatt-hour of electricity from offshore sites as from onshore sites.
Proponents hope that, as offshore increases its share of the market, economies of scale will kick in to reduce costs — much as they did for onshore wind power over the past decade (Sarah Sjolin, MarketWatch, May 2). — NM