The World Economic Forum (WEF) said last week that offshore wind energy is one of the most underused resources, with less than one-tenth of wind power based offshore. However, the Global Wind Energy Council projects that by 2023 it will account for almost one-quarter of world wind generation, with the UK, Germany, and China leading the way.
The UK currently leads the world in offshore power with more installed capacity than any other country and represents some 34 percent of total offshore installations. By 2030, offshore wind will provide one-third of the country’s energy mix, creating an estimated 27,000 new jobs in the industry. Germany, which is still a relative newcomer to offshore wind power brought its first project online in 2009. Yet, since then it has grown rapidly, becoming one of the world’s largest producers of offshore wind energy with an installed capacity of 6.4 gigawatts (GW).
China, for its part, is poised to take over the UK and become the global offshore wind leader. In 2018, China installed and connected more capacity than any other country. Moreover, the rate at which China adds new offshore capacity is planned to double from 2 to 4 GW a year by 2025. China’s offshore wind industry, like its other energy sectors (including oil and natural gas), is growing in lock step with the country’s economy and increasing demand. Related: U.S. Pipeline Boom Could End In Crisis
The Paris-based International Energy Agency (IEA) said energy consumption in China grew by 3.5 percent last year, accounting for one-third of global demand growth. China responded with the biggest growth in solar and wind power of any nation. China’s increased demand for energy as well as its increase in both oil and natural gas/LNG imports will increasingly put Beijing at a disadvantage geopolitically as it continues to strike deals with a myriad of oil and gas producing nations ranging from the Middle East to Russia, to the U.S., Australia, and others.
Onshore wind and solar revolution
Even though the World Economic Forum sees more offshore wind power coming on-line in the mid to long term, both onshore wind and solar power is currently outpacing the energy source. In fact, rapidly falling costs for harnessing wind and solar energy for low-carbon power generation are boosting global renewable energy capacity, the International Monetary Fund (IMF) said last week.
Renewable energy sources can help reduce carbon emissions substantially and the effects of global warming. The report, citing an April World Economic Outlook, said that solar and onshore wind turbines saw the biggest price declines among low-carbon energy sources between 2009 and 2017. Prices dropped 76 percent for solar panels and 34 percent for turbines during the nine-year period, making these sources competitive alternatives to fossil fuels and more traditional low-carbon energy sources such as hydropower and nuclear. Related: 19 Historical Oil Disruptions, And How No.20 Will Shock Markets
The World Economic Outlook data is based on levelized cost of electricity, a method of calculating the cost per unit of power that would be needed to recover the investment in building and operating different generating technologies. Moreover, global investment in renewable energy capacity has accelerated in the past decade, as wind and solar have emerged as cost-effective power sources, the IMF added. Hydropower attracted the most investment in renewable energy up to 2008, however by the next year wind turbines took the lead, and by 2016 solar panels became the dominant investment choice in renewables. More was invested in solar in 2017 than all other low-carbon technologies combined.
As the cost of wind and solar power generation declined, nuclear and hydropower costs rose 21 percent and 9 percent, respectively, during the same period. Wind and solar power is also a much cheaper energy alternative than nuclear and hydropower which are mature technologies that require a large investment in structures with low standardization, similar to other large-scale civil engineering projects such as bridges and railroads.
These factors tend to limit the potential for cost reduction for these kinds of projects, according to the IMF. However, research and development in solar and wind technologies, their standardization, and economies of scale in manufacturing have resulted in increasingly efficient solar panels and larger wind turbines.
By Tim Daiss for Oilprice.com
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