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Major offshore wind capacity additions expected in 2021

Despite the COVID-19 pandemic, the world’s installed offshore wind capacity rose by 15 per cent in 2020, reaching 31.9 gigawatts (GW) at year-end, from 27.7 GW at the end of 2019, independent energy research and business intelligence company Rystad Energy estimated. China was the main contributor in 2020, accounting for 39 per cent of last year’s additions, followed by the Netherlands (18 per cent) and the UK (17 per cent).

Rystad Energy expects the global installed offshore wind capacity to further increase by 11.8 GW in 2021, a monumental 37 per cent step-up compared to 2020s 31.9 GW. China will continue to lead the new capacity additions, contributing 63 per cent of the expected growth. 

As COVID-19 hit the Chinese market first, fears over supply chain disruptions emerged, with offshore wind developers worried about delays to projects down the line. And as the pandemic spread throughout the world, risks of a severe slump in construction activity grew. More countries closed their borders and went into lockdown and several manufacturing sites for turbines and other components temporarily shut down operations.

However, with the first wave of the virus settling, the offshore wind market returned to a growth trajectory, supported by increased capacity targets from several nations. While staying resilient in an uncertain market was key in 2020, this year the industry finds itself positioned for record growth, especially as commissioning activities pick up pace in Asia and around the world.

After 2021, China will begin phasing out feed-in-tariffs and many developers are therefore pushing to complete projects during the coming period. As such, this year is expected to see high capacity additions in the country.

“China had a construction backlog of more than 10 GW going into 2020 and Chinese developers are racing to reach maximum commissioning by the end of the year in order to claim full feed-in-tariffs,” commented Alexander Fløtre, Rystad Energy’s Product Manager for Offshore Wind. “This means 2021 is going to see major capacity additions, particularly since some projects initially scheduled for commissioning in 2020 ended up slipping into 2021.”

Europe and the US also saw some delays due to the pandemic. Nevertheless, offshore wind developers stayed committed to their ambitions and continued to make final investment decisions for projects in 2020. The UK sanctioned more than 4.7 GW of offshore wind and the Netherlands followed with over 2.2 GW.

In Central and Eastern Europe, Poland aims to be the leading player, after the Senate passed the Offshore Wind Act unanimously earlier in January and the Baltic countries are among the most suitable ones to develop offshore wind farms.

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