global offshore wind: annual market report september 2020 ... global cumulative offshore wind...

Global Offshore Wind: Annual Market Report Commissioned from RCG for Norwegian Energy Partners

September 2020

Highlights

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Volume growth – New Chinese 5 year plan insecurityNew regions and marketsIncreased growth rate year on yearCost continuing downwardsEmerging global industry with oil majors entering the market

Global cumulative offshore wind capacity would increase almost ten-fold by 2030 (to 228 GW) and even more towards 2050, with total offshore installation nearing 1 000 GW by 2050.

Kilde: International Renewable Energy Agency

• Today• 5 000 offshore turbines in Europe

today

• 6 000 globally

• 120 000 turbines by 2050• Of which + 1/3 will be floating

Across the next two decades

Global portfolioEurope remains the largest market, but momentum is building in China, Asia-Pacific and the Americas.

27 GWOperational

61.7 GWSecured

211.9 GWIn development

300.6 GWTotal

Top 15 (Q3 2020)

1 China

2 United Kingdom

3 Sweden

4 USA

5 Japan

6 South Korea

7 Germany

8 Ireland

9 Poland

10 The Netherlands

11 Brazil

12 Taiwan

13 Vietnam

14 Denmark

15 France

Total offshore wind portfolio

Global portfolio

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Key marketsPortfolio

Global picture

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Total Expenditures

- 254 bn EUR in next 5 years period until 2025

- average almost 50 bn EUR /year

- Cumulative 76 GW in the next 5 years to 2025 – with an average of ca. 15 GW installed yearly

0

50

100

150

200

250

300

0.0

10.0

20.0

30.0

40.0

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60.0

70.0

2021 2022 2023 2024 2025

Cum

ula

tive

EU

RB

illions

EU

R p

er

annum

Billions

Year

Cumulative China EMEA APAC (excl. China) Americas

0% (CAGR)

Global

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Key owners

Size and volume

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Bathymetry (fixed-bottom)The global fixed-bottom market is characterised by a steady move into deeper waters; predominantly driven by activity in Europe and the Americas.

1 0

Fixed-bottom projects only

Portfolio by region, avg. water depth & distance to shore

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Distance to shore• The majority of projects are located less than 60 km from shore, but records will be broken when projects in

the Dogger Bank come online in the first half of the decade.

Upcoming offshore wind lease auctions

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EMEA – Green recovery

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20.2 GWOperational

24.2 GWSecured

99.9 GWIn development

144.3 GWTotal

European Operational Portfolio

# Developer MW

1 United Kingdom 9,208

2 Germany 6,842

3 Belgium 1,774

4 Denmark 1,701

5 The Netherlands 1,118

6 Sweden 191

7 Finland 68

8 Ireland 25

9 Portugal 25

10 Spain 5

Legend

Operational

Developing

Key Markets

0 5 10 15 20 25 30 35 40 45

United Kingdom

Sweden

Germany

Ireland

Poland

The Netherlands

Denmark

Other

GW

Operational Route to market secured Development*

0

10

20

30

40

50

60

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Cum

ula

tive

GW

GW

per

annum

Year

Cumulative United Kingdom Germany The Netherlands France

Denmark Belgium Norway Other

EMEA

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Commissioning activity and forecast by country (2016- 2025)

EMEA

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• EUR 98bn total spend expected between 2021 and 2025 at a compound annual growth rate of 10% and 20 bn EUR market per annum.

TotEx forecast by country and sub-category (2021- 2025)

EMEA

1 6

20.9

0.1

24.1

0.1

95.2

6.6

0 20 40 60 80 100

Fixed

Floating

GW

Operational Route to market secured Development*

Key owners Technologies

0 10 20 30 40 50 60

Ørsted

RWE

Vattenfall

Iberdrola

wpd

SSE

Equinor

Other

GW

Operational Route to market secured Development**

Americas – heading west and south

1 7

0.03 GWOperational

6.5 GWSecured

27.8 GWIn development

34.3 GWTotal

Legend

Operational

Developing

Considered

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Cum

ula

tive G

W

GW

per

annum

YearCumulative Operational Route to market secured Development

Commissioning activity and forecast by status (2016 - 25)

AmericasUS market expected to ramp up in 2024, whilst renewed state procurement rounds should secure route to market for additional capacity from 2025 onwards

1 8

0

5

10

15

20

25

0

1

2

3

4

5

6

7

8

2021 2022 2023 2024 2025

Cum

ula

tive

EU

RB

illio

ns

EU

R p

er

an

nu

mB

illio

ns

YearCumulative DevEx CapEx OpEx AbEx

TotEx forecast by sub-category (2021 - 25)

EUR 22bn total spend expected between 2021 and 2025 at a compound annual growth rate of 45%.

AmericasStatus: The United States offshore wind power sector is well underway, with large-scale projects now being progressed. The Brazilian market has been accelerated by new projects announced in 2020.

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Key owners

Global developers continue to be active in the US market; Iberdrola has secured a presence in Brazil.

Key markets

US continues to move forward with firm projects.

Asia Pacific Japan follows the lead of Taiwan by boosting the market through the formalisation of large-scale lease auctions.

2 0

0.3 GWOperational

6.1 GWSecured

49.9 GWIn development

56.3 GWTotal

Legend

Operational

Active OSW Markets

Asia Pacific

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excl. China

Excl. China - EUR 34bn total spend expected between 2021 and 2025 at a compound annual growth rate of 7% and 7 bn EUR market per annum.

Asia PacificStatus: Outside China, Japan follows the lead of Taiwan by boosting the market through the formalisation of large-scale lease auctions.

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Key owners

The APAC market is led by local players.

Key markets

Beyond China, Taiwan leads in terms of operational projects and projects with a route to market secured.

Floating offshore wind The floating offshore wind market offering continues to develop, but remains on the margins for the time being as proponents seek to demonstrate its near-term commercial viability and cost reduction potential.

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*includes capacity without owners that is scheduled for auction and USA lease areas without owners (i.e. call areas

that have yet to be leased)

Key marketsPortfolio

Floating wind perspective

Add a footer

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Supply Chain

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An in-depth supply chain analysis section.

Using information from the database, you will be able to model and forecast progress at various stages of global and regional offshore wind supply chains.

The following slides serve as examples of the key aspects of the offshore wind manufacturing supply chain available in the Offshore Wind Tool.

Wind turbine supplyOverview: 2019 and 2020 saw turbine supply order books continue to fill, with several major deals announced off the back of tender wins, especially in the USA and United Kingdom.

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Key marketsOrder book Key suppliers

• GE saw a surge in orders following its launch of the 12 MW Haliade X, cementing third place in the list of key players.

• Siemens Gamesa stretched its lead at the front of the pack with several orders and preferred supplier agreements being signed in a variety of markets in 2019 through to Q2 2020.

• MHI Vestas continued steady progress, seeing more traction in completed contracts. It will look to close out the first projects installing its 9.5 MW boosted V164 system.

• 2019 also saw further attrition in the market, with Hitachi and Senvion, both announcing the phase out of offshore turbine supply operations.

• Orders in the major North Sea markets continued at pace, particularly in the UK following the results of Round 3 of the contract for difference (CfD) auction.

• The USA saw a major increase in preferred supplier agreements following solicitations for offshore wind projects in New York, Massachusetts and New Jersey.

• France took major strides forward in Q2 2020 with the announcement of Siemens Gamesa receiving firm orders for the supply of 71 SWT-7.0-154 units for the Fecamp project and an additional 62 SG 8.0-167 DD units at Saint-Brieuc.

• There are now nearly as many offshore turbines on order (3,469) as there are installed in the water (5,130), reflecting the projected rapid growth in installed capacity over the coming years.

• Despite the trend for larger and larger turbines, the increased capacity of projects has largely offset the potential reduction in the number of individual units on order.

Foundation supplyOverview: A steady year in 2019, with continued orders coming through in 2020 and the growth of the major markets, especially around the North Sea in Europe.

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Key marketsOrder book Key suppliers

• Sif and EEW continue to command the greatest market share with their ever-expanding facilities and the continued market appetite for monopile foundations.

• Both suppliers were aggressive in trying to secure orders in the USA, including EEW's commitment to develop a factory in New Jersey to support Ørsted's successful Ocean Wind Project.

• Orders in new markets saw some new players join the pack, however time will tell whether these stick and become part of the mainstream or whether they are soon overtaken by the old guard.

• Some uncertainty around offshore wind policy in Taiwan perhaps constrained the progression of the pipeline with the majority of deals staying under contract or as preferred supplier.

• A relatively slow build year for the United Kingdom saw some agreements signed or preferred suppliers selected, but relatively little progress on completed contracts.

• Germany remains firmly in second place, as Netherlands seek to overtake Denmark as the 'best of the rest' once orders are completed.

• Unlike turbine supply, developers have been more cautious to place orders for foundations in 2020 with most of the total order book at the completed stage.

• An even distribution across deals under execution, contracted and preferred supplier agreements reflects a steady but healthy pipeline.

Offshore substation topside installationOverview: A stable pipeline across major European markets is apparent, with orders coming through in Taiwan also.

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Key marketsOrder book Key players

• The majority of contracts are with major European EPCI (engineering, procurement, construction and installation) contractors.

• There remains a strong market outside of the top players with as many orders outside the top seven players as with the first ranked Subsea 7.

• Saipem has made the most ground this year and has moved up in to fourth place following a spate of new contracts in Europe.

• North Sea European markets dominate the order book.

• Orders for projects in France and Taiwan are beginning to come through as the markets mature, whilst Germany and the United Kingdom continue to build on their market leading position.

• Over 90 offshore substation topsides have now been installed.

• The pipeline for orders is strong with 12 confirmed installation contracts and an additional four at preferred supplier status

Offshore Wind Tool - content

Market Forecast Market Overview Supply Chain Forecast Supply Chain Overview

NORWEP Offshore Wind ToolDelivered by The Renewables Consulting Group

A digital base of information on all regional markets and 900+ offshore wind projects globally -exclusively for NORWEP partners!

Upcoming OW events

7-8 OctoberFloating Offshore Wind UK 2020

12-14 OctoberGWEC Virtual Global Offshore Wind Summit Taiwan

13-14 OctoberAWEA 2020 Offshore WINDPOWER Virtual Summit

21-23 OctoberChina Wind Power 2020

28-30 October Global Offshore Wind 2020

1-4 December Global Wind Summit /Wind Energy Hamburg 2020

What else are we working on?

- Virtual client webinars and B2B meetings highlighting NORWEP partners’ UVPs

- Virtual technology workshops presenting Norwegian supply Chain Capabilities targeted at developers and tier one and two suppliers

- Regional webinars bringing you detailed regional business insights

- Special reports planned for 2020 /2021- Turnover in the Norwegian offshore wind industry 2019 –

statistics- Opportunities for the Norwegian supply chain in offshore

wind (floating and fixed)- Local content and entering strategies- Market and industry report - substations- Market and industry report - EPCI’s

- Global Account Strategy

- www.norwegiansuppliers.no

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Contact Information

Jon DugstadJon.Dugstad@norwep.com(+47) 95 72 85 80

David S. OttesenDavid.ottesen@norwep.com(+47) 954 95 040

Knut Erik Steenkes@norwep.com(+47) 909 10 931

Offices Norwegian Energy Partners

Oslo Hoffsveien 23N-0275 Oslo

Stavanger Professor Olav Hanssensvei 7 AN-4021 Stavanger

solutions for globalenergy needs

www.norwep.com