Offshore Wind to Grow 15-Fold and Attract $1 Trillion in Investments by 2040

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A new report finds that global offshore wind capacity may increase 15-fold and attract around USD 1 trillion of cumulative investment by 2040.

A new report has predicted that offshore wind power will grow impressively over the next two decades, boosting efforts to decarbonise energy systems and reduce air pollution as it becomes a growing part of electricity supply.

The report by the International Energy Agency (IEA) finds that global offshore wind capacity may increase 15-fold and attract around USD 1 trillion of cumulative investment by 2040. This growth according to the report is driven by falling costs, supportive government policies and some remarkable technological progress, such as larger turbines and floating foundations.

The report finds that offshore wind technology has the potential to grow far more strongly with stepped-up support from policymakers.

Europe has pioneered offshore wind technology, and the region is positioned to be the powerhouse of its future development. Today, offshore wind capacity in the European Union stands at almost 20 GW. Under current policy settings, that is set to rise to nearly 130 GW by 2040. However, if the European Union reaches its carbon-neutrality aims, offshore wind capacity would jump to around 180 GW by 2040 and become the region’s largest single source of electricity.

An even more ambitious vision – in which policies drive a big increase in demand for clean hydrogen produced by offshore wind – could push European offshore wind capacity dramatically higher.

China is also set to play a major role in offshore wind’s long-term growth, driven by efforts to reduce air pollution. The technology is particularly attractive in China because offshore wind farms can be built near the major population centres spread around the east and south of the country. By around 2025, China is likely to have the largest offshore wind fleet of any country, overtaking the United Kingdom. China’s offshore wind capacity is set to rise from 4 gigawatts today to 110 gigawatts by 2040. Policies designed to meet global sustainable energy goals could push that even higher to above 170 GW.

“In the past decade, two major areas of technological innovation have been game-changers in the energy system by substantially driving down costs: the shale revolution and the rise of solar PV,” said Dr. Fatih Birol, the IEA’s executive director. “And offshore wind has the potential to join their ranks in terms of steep cost reduction.”

The huge promise of offshore wind is underscored by the development of floating turbines that could be deployed further out at sea. In theory, they could enable offshore wind to meet the entire electricity demand of several key electricity markets several times over, including Europe, the United States and Japan.