Offshore wind could become a $1 trillion (£779bn) industry by 2040, according to a new report from the International Energy Agency (IEA).
Although electricity generated through offshore wind farms currently accounts for 0.3 per cent of the world’s power, a combination of falling costs and supportive government policies will see capacity increase 15-fold over the next two decades.
The expansion could also remove 5-7 billion tonnes of CO2 emissions from the power sector globally, said the IEA.
Although the cost of developing a 1GW wind project currently stands at more than $4bn, costs should drop by more than 40 per cent by the end of the next decade.
Executive director Dr Fatih Birol said: “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, and offshore wind has the potential to join their ranks in terms of steep cost reduction.”
Europe is best poised to benefit from the sector’s development, with capacity set to rise from 20GW today to 130GW by 2040 under current policy.
If the EU reaches its carbon-neutrality aims, this figure could rise as high as 180GW – making it the continent’s largest single electricity source.
China is also set to benefit from the sector’s growth, pushed by efforts to improve air quality. By around 2025, China is likely to have the largest offshore wind fleet of any country, overtaking the United Kingdom, and by 2040 it will have a capacity of 110GW.
The paper comes a month after the UK announced plans to build its first subsidy-free offshore wind farms in the next decade. One tender to provide the grid was quoted at £39.6 per megawatt hour (MWh), Britain’s cheapest ever wind power rate.
The government said it had awarded twelve offshore licences in the most recent funding round. The projects will be able to power around 7m homes.
Main image credit – Getty