The offshore wind sector witnessed another year of high growth despite global financial uncertainties. Although 2022 did not match 2021’s record of over 19.5 GW of online capacity, which was mainly driven by the expiration of national feed-in tariffs in mainland China, 2022 witnessed the second highest amount of global online capacity with almost 8.5 GW. Final investment decisions (FIDs) were taken on over 11.5 GW of projects, making it the fourth highest year for FIDs.
2023 capacity additions are forecast to be 55% higher than 2022 levels, keeping the offshore wind sector busy. This continued growth is expected to take place in a year where the sector will also need to deal with several issues to keep up the momentum. Some of the key themes that Westwood expects to see this year include the continued awarding of lease areas as well as the launch of auctions in new markets, investment in newbuild vessels, development uncertainties, the fallout of losses faced by turbine original equipment manufacturers, the emergence of Chinese engineering, procurement, and construction supply chain companies entering markets outside of mainland China, and the integration of offshore wind with other forms of energy.
Auction Results and New Auctions To Be Launched
A total of 54.9 GW of offshore wind leases were awarded in 2022. The ScotWind lease round accounts for most of this capacity, with over 24.8 GW of project capacity being awarded in the initial round and a further 2.8 GW in the clearing round. Several offshore wind lease rounds are scheduled to be launched and potentially conclude in 2023. These include the 4 GW Celtic Sea floating wind auction in the UK, the 500 MW A06 (floating Mediterranean) auction in France and the central Atlantic, and the Gulf of Mexico and Oregon auctions in the US.
Offshore wind auctions are also planned to take place for the first time in new markets that are aiming to develop projects. Up to 10 GW of floating wind projects are planned to be auctioned in Portugal, 4 GW are planned to be auctioned offshore Tamil Nadu State in India, and Lithuania is planning to launch its first lease auction for a 700 MW wind farm.
Alongside these lease auction rounds being launched, the results of auctions that are currently taking place are also expected to be revealed in 2023. The results of 6.2 GW INTOG leasing round in the UK is scheduled to be announced this year. Poland is planning to conclude its auction for up to 11 GW of lease areas, and France is also expected to announce the winners of the 250 MW Brittany Floating Wind and the 1 GW Normandy fixed bottom tenders. In Taiwan, the floating wind tender, which was scheduled to be released in the fourth quarter of 2022, was delayed until the first quarter of 2023, although Westwood predicts it remains scheduled be awarded in 2023.
Some recent lease auctions have witnessed the implementation of qualitative criteria when it comes to selecting the winning bidders. The Hollandse Kust West Site VI tender in the Netherlands included a criterion for bidders to demonstrate how their proposal would contribute to the ecology of the North Sea. Qualitative measures are being implemented in future auction rounds, and their importance is expected to increase. The Utsira Nord auction in Norway highlights this shift as the lease areas will be allocated to bidders on the bases of qualitative criteria such as proposed projects contribution to innovation and technology development.