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The global offshore wind supply chain is facing a formidable challenge, requiring a secured investment of $27 billion by 2026 to keep pace with the anticipated fivefold surge in annual installations (excluding China) by 2030. A recent Horizons report by Wood Mackenzie, a leading insights provider for renewables, energy, and natural resources, underscores the urgency of substantial financial backing for the sector.
Based on Wood Mackenzie’s base case projection, which predicts annual capacity additions reaching 30 gigawatts (GW) by 2030, this investment figure remains dwarfed by the ambitious offshore wind targets set by policymakers worldwide. The report reveals that these targets, which aspire to nearly 80 GW of annual installations, demand a staggering $100 billion in funding.
However, the industry faces significant hurdles in drumming up this level of investment. Low offshore margins stemming from oversupply since 2015 have eroded profitability and dampened the enthusiasm of suppliers. Moreover, uncertainty surrounding project timing has made suppliers cautious about expanding manufacturing capacity, hindering innovation.
Wood Mackenzie experts emphasize that a concerted effort is required from both governments and developers to surmount these challenges. Extending target setting and power market infrastructure plans beyond 2030, while fostering innovative partnerships with suppliers, are crucial steps. The report underscores the need for a sustainable path forward, not only for projects in the coming decade but also for the projected 1.4 terawatt (TW) offshore wind capacity expected to be operational by 2050.
As governments increasingly prioritize offshore wind as a vital element of decarbonization and energy security, the onus is on the sector, including policymakers, to collaboratively chart a course towards a resilient offshore wind supply chain. Failure to address these challenges could impede progress toward critical climate goals and hinder the growth of the industry in the long term.
