Offshore wind projects surged to a historic milestone in 2023, with a remarkable 12.3 GW securing final investment decisions (FID), a substantial leap from the meager 0.8 GW in 2022, as reported in TGS-4C Offshore's Global Market Overview released this week.
Anticipating yet another groundbreaking year, TGS-4C Offshore predicts a potential record of up to 13 GW in 2024.
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In 2023, eight European projects, totaling 9.3 GW, successfully achieved FID. Noteworthy among them was the 2.9-GW Hornsea 3 in the UK, finalizing its investment at the close of the year. Meanwhile, the US marked progress with the 704-MW Revolution Wind project entering the investment stage, accompanied by an additional 2.3 GW securing investments in Taiwan and South Korea.
Despite persistent challenges such as project delays and cancellations, the year 2023 witnessed unprecedented strides in offshore wind development. Richard Aukland, Director of Research at TGS-4C Offshore, commented, “With high activity and a significant year of offtake auctioning expected in 2024 as countries work to hit their 2030 installation targets, a positive scene is being set for the next twelve months, and this will translate into record construction activity later in the decade.”
Offtake activity experienced a slight dip of almost 2 GW to 9.5 GW in 2023, primarily attributed to the absence of offshore wind participation in the UK's contracts for difference (CfD) auction. However, the momentum is picking up, with five auctions currently underway in the US. Looking ahead, a substantial 47.5 GW of offtake auctions are scheduled for 2024, with 40 GW in Europe.
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The lease rounds schedule remains robust, with 43.8 GW of sites awarded in 2023, a third of which was allocated to floating wind. Auctions for leases totaling 33.5 GW are set to take place in multiple countries, including Australia, Belgium, Colombia, Denmark, Estonia, Finland, France, India, Japan, Lithuania, Netherlands, Norway, Portugal, Spain, the UK, Uruguay, and the US.
In terms of pricing, offtake contracts have witnessed an increase in costs. The average price of EUR 105 (USD 115) per MWh in 2023 is reflective of the impact of recent inflation, supply chain constraints, and interest rates on the offshore wind sector.
