Offshore wind spending is increasingly closing the gap on offshore oil and gas (O&G) investment and is forecast to surpass it in several key markets by 2030, according to research by Rystad Energy.
By the end of the decade, anticipated growth in offshore wind investment will bring Europe, the United States and Asia to the tipping point.
China and the UK – the two largest offshore wind nations by operational capacity – reached the crossing point where offshore wind investment outstripped offshore O&G spending in 2017 and 2020, respectively.
Rystad Energy expects global offshore O&G expenditure to increase only marginally to more than $140 billion by 2030.
Over the same period, offshore wind is forecast to reach a market size of $87 billion – a 70% increase compared with 2021's market value of $50 billion. Less than $10 billion will separate the two sectors in terms of greenfield capital expenditure (capex), the analysts estimate.
In Europe, offshore O&G capex budget cuts during the pandemic will cause offshore wind and offshore O&G capex levels to nearly intersect in 2022. However, a slight recovery for O&G post-pandemic, paired with a slowdown in offshore wind investment growth due to project timing, will delay the crossing point to 2026.
Europe is expected to be the world’s largest offshore wind region by 2030, with 119GW of installed capacity.
The US offshore wind sector will see very fast growth, albeit from very low levels. Capex spend for offshore O&G is expected to fall below $10 billion from 2023 onwards.
Rystad expects the US to reach 21GW of installed offshore wind capacity by 2030 — short of the Biden administration’s target of 30GW. This will entail investments rapidly increasing to $8-10 billion between 2025 and 2030.
The offshore wind industry in Asia (excluding China) is still in its infancy, but capacity is expected to grow fast during the decade.
In the short-to-medium term, intertidal wind farms in Vietnam and conventional offshore wind in Taiwan are expected to drive capital investment towards 2025. Rystad expects Japan and South Korea to add to sectoral growth in the second half of the decade. With declining offshore O&G investments, the crossing point is expected to occur in 2028.
Despite a decline in investments over the decade as feed-in tariffs are phased out from 2022, China is expected to become the world’s largest offshore wind market, with 58GW of installed capacity in 2030.