Total installed offshore wind capacity will reach 330GW by 2031, up from 34GW in 2020, according to a new report by Wood Mackenzie.
By 2030, Wood Mackenzie expects 24 countries to have large-scale offshore wind farms, up from nine today.
Cumulative global capex spend in the sector is expected to hit US$1 trillion (€0.95 trillion) by 2031, the report forecasts.
However, investors will no longer only be competing on price alone.
Wood Mackenzie head of offshore wind research Soeren Lassen said: “Companies are now jostling to bag a share of the trillion-dollar offshore wind industry.
“The pipeline of proposed projects grew 66% last year and is now nearly three times as high as our projected forecast offshore wind capacity in 2030.
“The challenge is that few opportunities in the offshore wind space will go uncontested.
“As more companies bid, lease payments skyrocket and subsidies drop, project returns are falling.
“Cost competitiveness will always remain a central element of winning in offshore wind; however, a new set of factors beyond bidding price is gaining traction, and this will determine who wins and who loses in the industry.
“These four factors – local content, systems integration, ecological mitigation and sustainability – will necessitate a strategic shift for competitors in offshore wind.”
Wood Mackenzie estimates that almost 80% of capacity connected this decade will be influenced by local content policies.
Each market will have its own flavour of local content rules and require different strategies as countries work to ensure compliance with World Trade Organization regulations.
The size of the economy in comparison to the size of the offshore wind opportunity will also influence local content rules.
Competing on local content will require offshore wind participants to have the skills and capabilities to establish and mobilise local workforces and industries, according to the report.
Systems integration involves combining offshore wind projects with other technologies and capabilities that help economies decarbonise and produce greater value from the offshore wind project, are also a factor.
It can include, for instance, pairing offshore wind with electrolysers to produce hydrogen, energy storage, interconnections to multiple regions, providing ancillary services, and floating solar projects.
Systems integration will be most important in markets where the share of renewable resources is high, providing reliable supply is increasingly challenging and where governments are committed to reaching net-zero targets and will, therefore, support green hydrogen development, Wood Mackenzie said.
Ecological mitigation, or maximising the use of the sea while minimising environmental impact, will also become more important during tenders.
Reducing the lifecycle emissions of offshore wind projects and improving recyclability is also expected to be taken into account more, according to the report.
Wood Mackenzie vice chairman for energy transition Chris Seiple said: “The focus is now shifting to multiple criteria to determine tender and lease auction outcomes, and the criteria in individual markets will differ.
“To succeed, investors need to be able to anticipate the important criteria in each market, have the capability and skills to execute and meet those criteria, and understand the trade-offs and synergies between them.”