WEMO24-Compiled Report-Interactive compressed (002) 4154-7882-8116 v.1 - Flipbook - Page 12
Global
Outlook
The wind offshore sector has encountered difficulties:36 In
2023 global wind offshore installed capacity amounted to 73
GW37 out of which 34 GW are in Europe (which was the first
region to instal offshore wind turbines) 31 GW in China38 and
3 GW in the USA (which is catching up).
In 2023 large offshore wind turbine manufacturers were
confronted with operational and financial difficulties. While
this crisis impacted European players as Vestas, Siemens Energy
or Vattenfall, it had large consequences in the USA.
Big companies such as Ørsted, Equinor, BP and Avangrid,
cancelled contracts or sought to renegotiate. Pulling out meant
36 https://www.npr.org/2023/12/27/1221639019/
offshore-wind-in-the-u-s-hit-headwinds-in-2023-heres-what-you-need-to-know
37 https://www.statista.com/statistics/
38 https://www.offshorewind.biz/2023/06/30/china-now-has-31-gw-of-offshore-wind-installedcountry-on-track-to-hit-wind-and-solar-targets-five-years-early-report-says/#:~:text=China%20
Leads%20in%20New%20Offshore%20Wind%20Capacity%20Second%20Year%20in%20
Row&text=The%20total%20capacity%20of
• Added to this, there were difficulties linked to regulations
and the post-Covid crisis. In the USA and in Europe, the
process to obtain all the permits and approvals for a wind
offshore project, takes years. The post-COVID crisis and the
war in Ukraine resulted in high inflation, high interest rates,
logistics issues that increased costs of commodities (like steel
or copper) as well as construction and capital costs. However,
there were no price renegotiation clauses in the contracts
agreed by the operators before the Covid crisis, hence, the
choice of turbine suppliers or future operators to renounce
these contracts and pay penalties rather than incur even more
important losses.
WEMO 2024
Intermittent renewables growth:
2023 was the 22nd year in a row that renewable capacity
additions set a record.
Year on year, total renewable energy capacity increased by
14% with a larger capacity expansion of solar (32%) than wind
(13%). Solar PV alone accounted for three-quarters of renewable
capacity additions worldwide.
China commissioned as much solar PV as the entire world did in
2022, while its wind additions also grew by 66% year-on-year.
the companies faced cancellation penalties ranging from $16
million to several hundred million dollars per project.
It also resulted in Siemens Energy, the world’s largest maker
of offshore wind turbines, anticipating financial losses in 2024
of around $2.2 billion.
These cancelled projects capacity amounted to more than 12
GW in the USA, around half of the capacity in the pipeline.
There are a few reasons for these difficulties:
• To win large wind offshore farms projects, offshore wind
operators (Utilities, Oil companies, Investment funds) have
put price pressures on their suppliers. To sell their equipment,
these suppliers have lowered their prices, and they were thus
unable to amortize their R&D costs.
12
Renewables
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