Offshore Wind Prediction Roundup For 2022

A new year, new wind possibilities. Despite continuing Covid disruptions and rising raw material prices, 2022 looks set to be another good year for the renewables sector. With our predictions for the offshore wind sector in 2022, here is where we think the industry is heading.

The UK will once again be a mainstay of the European offshore wind market. With both the ScotWind tender and the latest Contracts for Difference auction due this year. ScotWind has already seen big industry players team up to launch bids—including Ocean Winds and Aker Offshore Wind, and SSE Renewables and Copenhagen Infrastructure Partners. The latest CfD auction will be the biggest ever with the UK government hoping to secure more renewable capacity than the previous rounds combined. A total of 12 GW of electricity.

Germany will flex its muscles in 2022. The new German coalition of the Social Democrats, Free Democrats, and the Greens has promised to put climate change at the front of their agenda. They have promised to phase out coal by 2030 and provide 80% of all electricity from renewable sources by 2030. To meet these ambitious targets, the German government will need to rapidly accelerate their offshore wind plans. Expect some big target numbers from the Government this year.

2022 might well be the year we see a step change in US offshore wind development. There is now 30 GW of offshore wind under some form of development along the US East Coast (compared to approximately 50 MW currently operating). With the Biden administration looking to accelerate the US’ pivot to green energy. Projects are currently receiving permit and state approvals at an increased rate. Massachusetts approved 1.6 GW of projects recently and Maryland supported a further 1.6 GW, with Ocean Winds, Iberdrola and Ørsted all involved.

Offshore will keep moving further. At the back-end of 2021, two significant projects produced first power. In China, the Jiangsu Dafeng H8-2, a 300 MW farm in the North Jiangsu sea, and in the UK, the Hornsea 2 farm. Both these sites are important as being the first offshore projects further than 70 km from their respective coasts. This trend will continue, and 2022 will see further distant farms planned. The Chinese site is also their first field to use offshore high-voltage transformer stations for transmission. The Hornsea 2 site will be the biggest offshore wind farm in the world when fully operational.

2022 will not be without its challenges. Covid will continue to cause trouble with travel restrictions and supply irregularities influencing the supply chain. The increasing vaccine inequality will see further disruptions for emerging markets. Skilled worker shortages are a likely challenge for everyone.

Raw material costs have risen drastically, and turbine manufacturers are warning of price pressure. Combined with rising transportation costs, 2022 will see margins being squeezed and perhaps restructures or the loss of less robust players. Chinese turbine manufacturers will make larger inroads into the European market, which may exacerbate the issues for some of the smaller European manufacturers.

2022 will be another exciting year for offshore wind.