Up to 380GW of pre-FID offshore wind projects worth around US$883bn are potentially at risk, according to new research from Westwood Global Energy Group.
The projects, forecast to reach FID between 2024 and 2030, represents nearly 40% of the global offshore wind project pipeline.
In its Project Certainty White Paper, Westwood revealed that developers such as TotalEnergies and BP have the highest risk profiles, with substantial pipelines but limited or no operational capacity, compared to Orsted and RWE with sizeable track records and a less ‘risked’ unsanctioned portfolio.
Westwood has formulated three scenarios leveraging project certainty statuses to estimate the potential offshore wind capacity that could reach FID by 2030.
These scenarios offer deeper insight into the market’s future, revealing the potential pace of project investments and knock-on effect it has on supply chain opportunities.
One potential High scenario reaches 504GW of cumulative sanctioned capacity by 2030, with the Medium and Low cases reaching only just over 351GW and 157GW respectively.
Bahzad Ayoub, Senior Analyst for Offshore Wind, Westwood, said: “Offshore wind market uncertainty is rife. Growing diversity of developers in the marketplace, combined with evolving development and commercialisation approaches has created a complex landscape.
“This is compounded further by the diversification of the investor landscape, with oil and gas majors, public investment funds, and even fashion houses entering the sector. However, despite this uncertainty, there is significant opportunity ahead to be capitalised on, but we must first understand the risk.”
Bahzad 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’.”