According to a new report, the TGS 4C Offshore’s Global Market Overview, more regions and countries than ever are planning their first offshore wind lease rounds this year. However, project development and investment decision delays are slowing the progress of offshore wind build-out in the short term due to slow permitting, delays in offtake auctions, supply chain issues, and price uncertainties.
Despite these challenges, 4C Offshore expects the industry to catch up in the coming years to counteract the effects of rising inflation and cost of capital. The report forecasts a small increase in the number of projects and renewable energy capacity installed or under construction globally in 2030 compared to last quarter’s predictions. The updated forecast is now 269 GW installed or in progress by the year 2030.
Countries planning their first offshore wind lease rounds this year include Norway, Lithuania, Uruguay, Portugal, Australia, Brazil, Columbia, Estonia, and Ireland. However, due to the average development cycle time from site award to first power taking around eight years, many of these lease rounds will not contribute to global energy production before 2030.
While offshore wind sites continue to be awarded at a high pace, only 900 MW of offshore wind capacity reached a final investment decision in 2022, significantly down compared to recent years. The report highlights the need for the rate of confirmed investments to reverse to meet the 4C Offshore’s 2030 forecast of projects installed or under construction. 4C Offshore projects that investment decisions of 4.7 GW per quarter are needed to meet the ambitious forecasts.
New 4C Offshore report: “Record lease sale activity expected for 2023“
