BAKU, Azerbaijan, August 16. The costs of offshore wind projects implementation will surge massively, as next generation technologies will require more complex infrastructure, Finlay Clark, Research Analyst at Wood Mackenzie, a global research and consultancy group, said, Trend reports via WoodMac.
“Driven by continually larger turbine technology, by 2029 most towers will be over nine meters in diameter – a significant increase from the average five to six meters that was required in 2021. Turbines will also need more tower sections, which will result in a four-fold increase in demand for those sections,” he said.
According to the analyst, the average offshore wind tower will be nearly three times heavier by 2031, compared to a decade before. “That will pose logistical challenges - forcing the supply chain to adapt. We are already seeing new facilities increasingly being positioned with direct access to the sea, reducing logistical headaches from fabrication facilities inland”.
As Clark noted, the need for heavier towers will have a negative impact on the demand for steel, as the sea wind towers will need almost 500 percent more steel in 2031, compared to 2022. As orders increase in the same way, the annual costs of the towers will increase five-fold, and the total costs from 2022 to 2031 will reach 15 billion euros.
“Up until now, offshore developers have had the luxury of significant oversupply in the offshore wind market. With ample supply to cater for fluctuating demand, suppliers’ margins have been squeezed to unsustainably low levels. Aggressive bidding in tenders, combined with higher steel and logistics costs, is also having a detrimental impact as developers' cost pressures are passed onto the supply chain,” he added.
However, as the WoodMac analyst estimates, oversupply in the offshore wind sector is expected to drop towards 2025. “The tightening market will give suppliers increased bargaining power during contract negotiations, and ease pressure on margins,” he said.
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