A new research report from the Westwood Global Energy Group raises concerns about the vulnerability of up to 380GW of pre-Final Investment Decision (FID) offshore wind projects, representing an estimated value of around US$883 billion. These projects, slated for FID between 2024 and 2030, make up nearly 40% of the global offshore wind project pipeline.
In its Project Certainty White Paper, Westwood identifies major players such as TotalEnergies and BP as having higher risk profiles due to substantial pipelines but limited or no operational capacity. In contrast, companies like Orsted and RWE, boasting established track records, exhibit a less ‘risked' unsanctioned portfolio.
Westwood's study introduces three scenarios based on project certainty statuses, projecting potential offshore wind capacity reaching FID by 2030. The High scenario envisions 504GW of cumulative sanctioned capacity, while the Medium and Low scenarios project just over 351GW and 157GW, respectively.
According to Bahzad Ayoub, Senior Analyst for Offshore Wind at Westwood, “Offshore wind market uncertainty is rife. Growing diversity of developers in the marketplace, combined with evolving development and commercialization approaches, has created a complex landscape.” He emphasized the need to understand the risks amid the industry's evolution.
Ayoub added, “When viewed collectively, our current projections reveal a pipeline that faces sizeable risks before reaching FID, with only 9% of capacity ‘Probable' with the remaining 51% ‘Possible' and 40% ‘Risked.'” The study sheds light on the intricate dynamics of the offshore wind sector, highlighting both challenges and opportunities in navigating its evolving landscape.