Analysis by Wood Mackenzie shows that Europe will remain the biggest operations and maintenance (O&M) market by region, reaching $6.6bn by 2029
The global offshore wind operations and maintenance (O&M) market is expected to grow 16% annually to $12bn by 2029, says a report.
The analysis by energy researcher Wood Mackenzie shows that Europe will remain the biggest O&M market by region, reaching $6.6bn in the next nine years.
Meanwhile, the report notes that “rapidly expanding markets” in Asia and the US could bring “new challenges and opportunities” for domestic industry as well as international investors.
Wood Mackenzie senior analyst Shimeng Yang said: “We expect to see O&M strategies developed for highly subsidised projects featuring near shore and smaller turbines evolving to fit the new market landscape characterised by large turbines and waning subsidies.
“As the overall O&M market grows, these changes will open new opportunities for both existing and new players in the offshore wind sector.”
Global offshore wind O&M market is “still young and lacks experience”, says report
The global offshore wind O&M market is “still young and lacks experience” in long-term O&M issues and failures, according to Wood Mackenzie.
It said that currently, only 1.8 gigawatts (GW) of global capacity have been operating for more than 10 years. By 2029, this figure is expected to increase 11 times to 20GW. By then, 90% of the operational fleet, equivalent to 165GW, will still be under 10 years old.
As manufacturers dedicate more resources to O&M services for newer and larger turbine models, the report highlights that the ageing turbine fleet represents a “significant opportunity” for independent service providers as well as in-house expertise.
Wood Mackenzie research associate Finlay Clark said: “Design and fabrication innovations that accommodate the rapid increase in turbine capacity must be met with equally innovative O&M practices, as turbine complexity and project scale continue to soar.
“China, which is set to become the single largest offshore wind O&M market globally, must tread carefully.”
The analysis highlights that China is expected to overtake the UK’s position as the world’s largest single offshore wind O&M market, with 41GW of growth throughout the 2020s, leading to a total of 49GW capacity – equivalent to $2bn of operating expense (opex) opportunities by 2029.
“China’s young and rapidly growing fleet will require sweeping changes in asset management strategy to deal with massive uptake throughout the 2020s,” said Yang.
The country’s enthusiasm for offshore wind has led to a “rushed boom in installations”, according to the report. It said that coupled with the expiration of national subsidies for wind power, offshore operators in China will face “considerable operational challenges” to ensure the profitability of their projects.
With economies of scale and improved efficiency of asset management and O&M services, the global average opex per megawatt is expected to decline by 20% between 2020 and 2029 on average.
Wood Mackenzie said Europe’s implementation of flexible service operation vessels, remote operation innovations (such as drones), cameras, new digital technologies and the impact of offshore wind clustering have resulted in average opex per megawatt declining by 44% over the past eight years.
It believes these factors will continue to drive opex reduction beyond 2020 further powered by machine learning and deep learning from big data, as well as robotics and autonomous systems that will partially offset labour costs.