Growth in the offshore wind market is set to explode, with wind tower tonnage getting heavier, meaning more demand for steel, says Wood Mackenzie.
With increasing numbers of countries committing to tougher climate targets, offshore wind is a key technology that will power global decarbonisation – the industry is no longer in its infancy, the consultancy points out. Almost $1 trillion is predicted to flow into the market over the next decade, Kallanish notes.
Driven by continually larger turbine technology, by 2029 most towers will be over nine metres in diameter – a significant increase from the average five to six metres that was required in 2021. Turbines will also need more tower sections, which will result in a four-fold increase in demand for those sections.
By 2031, the average tower will be nearly three times heavier in comparison to a decade before. Beyond 2030, meanwhile, the uptake and globalisation of floating wind farms will further increase both complexity and weights of the required components.
Offshore wind towers will need nearly 500% more steel in 2031 compared to 2022 demand levels. As the volume of orders increases, similarly the annual spend on towers will increase five-fold, with the cumulative spend from 2022 to 2031 reaching €15 billion ($15.3 billion).
“Up until now, offshore developers have had the luxury of significant oversupply in the offshore wind market,” says Wood Mackenzie research analyst Finlay Clark. “With ample supply to cater for fluctuating demand, suppliers’ margins have been squeezed to unsustainably low levels. Aggressive bidding in tenders, combined with higher steel and logistics costs, is also having a detrimental impact as developers’ cost pressures are passed onto the supply chain.”
However, towards 2025 the growth in demand will significantly outpace the growth in supply.
Adam Smith Poland