Page 4 - AsiaElec Week 45 2021

AsiaElec COMMENTARY AsiaElec

Offshore global wind spending

to exceed oil and gas capex in

key markets by 2030

GLOBAL OFFSHORE wind is closing the gap on oil and $10bn will separate offshore ‘greenfield’ capex
gas (O&G) investments and is forecast to surpass for O&G and offshore wind investments, with
them in “several key markets” by 2030, according O&G investment remaining in the lead, said Flø-
to a new Rystad Energy analysis. tre. Greenfield refers to new facilities, whereas
Indeed, offshore wind investment has already brownfield, in O&G terminology, refers to
surpassed O&G in some nations that are leading infrastructure that ties into an existing field, to
the pack in offshore wind – namely the UK and increase production.
China. While the global ‘crossing point’ is further
Anticipated growth in offshore wind invest- out in time, countries and regions that priori-
ments will bring Europe, the United States and tise offshore wind should see a gradual decline
the rest of Asia to the “tipping point” before the in offshore O&G investment and the inevitable
end of the decade, says Oslo-based Rystad. crossover sooner, said the analysis.
This is although oil and gas (O&G) invest- China and the United Kingdom – the two
ments will still rise nominally during that largest offshore wind nations in terms of oper-
timeframe. ational capacity – reached this crossing point
The analysis is important because of coun- in 2017 and 2020 respectively. In the UK, the
tries’ ambitious policies to hasten renewable offshore wind market is anticipated to remain
energy, including offshore wind, and reach cli- larger than the offshore O&G market until 2030.
mate targets. That is the big driver of the trend, It is currently the largest offshore wind market
Alexander Dobrowen Fløtre, offshore wind globally. The UK’s oilfields in the North Sea
expert and vice president at Rystad, told Renew- are mature, and many rigs have already been
able Energy News (REM). decommissioned.
He noted how many oil and gas majors have As the UK is targeting 40 GW of offshore
been transforming themselves into energy wind capacity by 2030, activity levels are forecast
majors, while most recently during the pan- to remain high, said Rystad.
demic they have been cutting O&G capex budg- Europe – including the UK – is expected to be
ets while shielding renewables budgets. the world’s largest offshore wind region by 2030,
Fløtre also noted that there are more sites for with 119 GW of capacity. The crossing point is
offshore wind, compared with those for onshore predicted for 2026. Offshore wind investments
renewables projects, and that offshore wind can in Denmark, a pioneer in offshore wind despite
be developed at scale, with larger turbines, larger its early projects being small, are expected to out-
projects and higher wind speeds. strip O&G as soon as next year.
The analysis comes as negotiators are meeting In Europe, investment levels in offshore
in Glasgow for the UN climate talks known as wind have been high for some time, making it
COP26. Increased use of renewable energy and the world’s most mature offshore wind region
decreased use of fossil fuels is seen as a corner- with 25.7 GW of operational capacity. With the
stone of the world not exceeding a 1.5-degrees decline in offshore O&G investment and capex
Celsius increase of temperature compared with budget cuts by exploration and production O&G
pre-industrial levels, which is necessary to avoid companies during the pandemic, offshore wind
the worst impacts of climate change, according and offshore O&G capex levels are projected
to experts. nearly to intersect in 2022.
Rystad said it expects global offshore O&G However, in Europe, O&G will have a slight
expenditure to increase marginally to over recovery as the continent’s economy recovers in
$140bn by 2030, WHY? while the rapidly grow- a post-pandemic world, paired with a temporary
ing offshore wind sector is forecast to reach a slowdown in offshore wind investment growth
market size of $87bn globally over the same due to project timing. So Europe’s crossing point
period – a 70% increase compared with 2021’s is not anticipated to occur before 2026.
market value of $50bn. From then on, the offshore wind and offshore
Estimates show that by 2030, less than O&G markets are expected to “part [the] ways”

P4 www. NEWSBASE .com Week 45 10•November•2021