Recent setbacks in a few international offshore wind ventures may raise questions about its economic soundness, yet they don’t portray the whole industry.
In fact, average costs for offshore wind projects have steadily decreased, pulling in diverse companies, even oil giants like Petrobras, Equinor, and Shell.
A report by A&M, in association with Brazil’s Wind Energy Association, shows a 40% reduction in worldwide offshore wind installation costs between 2010 and 2020.
Turbines and towers comprise between 33% and 44% of these costs, while setup tasks take up 8% to 19%.
Before the pandemic hit, advanced technology had already begun to lower the investment expenses in offshore wind farms.
Projections indicate that these costs will keep dropping under different economic conditions.
The National Confederation of Industry reports 60 GW of global offshore wind capacity. Projections show 260 GW by 2030.
This growth has a backing of US$1 trillion in investment.
Brazil holds a massive untapped offshore wind potential, around 700 GW. About 189 GW worth of projects await licenses, almost equal to Brazil’s entire energy capacity.
Three main barriers impede investment: regulatory approval, financial incentives, and a strong supply network.
Advances in technology predict an additional decrease in costs, thus enhancing economic feasibility.
Brazil Auctions
Offshore wind energy growth outpaces its onshore counterpart, despite not reaching global consolidation.
Brazil also plans its first auction for offshore wind projects, targeting operational status by 2027.
Companies like Prysmian, the largest energy cable manufacturer, are gearing up for this demand surge.
The firm expects Brazil’s offshore wind projects to be more affordable than those in the U.S. and Europe.
Petrobras’ CEO also earmarks offshore wind as a key element in their path to reduced carbon emissions.
In summary, the sector faces high costs, regulatory limits, and supply chain issues.
Despite this, falling costs and tech advances point to a promising future for offshore wind investments.