IEA - Offshore wind is set to be a $1-trillion industry

The International Energy Agency (IEA) has said that energy harnessed from offshore wind could become a key component of the global power supply as costs fall rapidly and technology improves exponentially, thus unleashing the renewable energy source's full potential.

The replacement of fossil fuels with renewable sources of energy is one of the crucial factors towards meeting the Paris Agreement target of limiting temperature rise to under 2 degrees Celsius this century. The continued expansion of offshore wind could avoid an estimated 5 to 7 billion tonnes of CO2 emissions coming from the energy industry, the IEA said.

In what it described as "the most comprehensive" study of offshore wind to date, the IEA said that the total amount of power generated by offshore wind turbines amounts to just 0.3% of the overall figure.

However, the organisation has made a forecast, based on present and proposed policies, that the sector's capacity is set to increase 15-fold over the course of the next twenty years, making it into a $1-trillion industry.

“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 IEA executive director Fatih Birol.

“And offshore wind has the potential to join their ranks in terms of steep cost reduction.”

In 2018, a 1 GW offshore wind project cost over $4-billion to construct, including transmission. The IEA has said that the cost is set to drop by more than 40% over the next decade.

In Europe, offshore wind is set to soon outperform natural gas-fired capacity in cost terms and reach an even keel with solar panels and onshore wind. In China, the industry is on course to becoming competitive with coal by around 2030.

However, the IEA also added that large investments into grid infrastructure, and meaningful political action was highly necessary.

“More and more of that potential is coming within reach, but much work remains to be done by governments and industry for it to become a mainstay of clean energy transitions,” said Birol.

As the green transition continues to take over the worldwide political agenda, there has been an increasing disconnect between climate ambitions and real-life emissions trends given that energy- related CO2 emissions hit an all time high last year.

The world's first ever offshore wind turbines were installed in Danish waters in 1991. Denmark produced 15% of its total electricity from offshore wind last year.

The UK today has the biggest capacity but the industry is growing, especially in the United States and in Asian countries, including Taiwan and Japan.

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