Clarkson Research Releases First Half 2023 Data for Offshore Wind

Clarkson Research Releases First Half 2023 Data for Offshore Wind

First half 2023 statistics for the offshore wind sector have been released by Clarksons Research. Reviewing the data, Steve Gordon, Managing Director of Clarksons Research commented:

  • Offshore wind’s growth phase continues, with increased project sanctioning and further growth of installed capacity.
  • Newbuild investment for dedicated wind vessels (WTIVs, C/SOVs and CTVs) remains strong.
  • The European WTIV and ‘Walk-To-Work’ markets have firmed seasonally, with a generally encouraging medium term outlook.
  • Energy Transition and energy security trends to support further growth of the global offshore wind sector.

Strengthening FID Activity

  • Offshore wind FID activity strengthened in the first half of 2023. A total of $21.1bn of project CAPEX was committed by developers, up 59% y-o-y on an annualized basis following a softening of FID activity in 2022 (high inflation and rising interest rates impacted) (2022: $26.6bn, down 36% y-o-y).
  • Strengthening sanctioning activity has been supported by investment in large-scale European projects ($10.9bn has been committed in Europe vs $2.4bn for full year 2022), while $10.2bn has been committed in Asia (including $6bn for projects covered by the 14th Five-Year Plan in China).
  • Developers and suppliers continue to face significant margin pressures, especially in Europe and the US amid elevated inflation and rising interest rates, impacting some project viability.
  • Global active offshore wind capacity stands at 62.8 GW (across 12,440 turbines and 284 farms), with 9.4 GW on track to start-up in 2023; we project global active offshore wind capacity to grow by 15% across full-year 2023.

Robust Newbuild Vessel Ordering

  • Wind vessel newbuild ordering remains strong, with 66 dedicated wind vessel orders (WTIV, C/SOV and CTV) of $1.9bn placed globally in 1H 2023, up 20% on last year's record 110 orders ($6.1bn) an annualized basis.
  • C/SOV ordering activity remains particularly strong; 12 C/SOV orders were placed globally in 1H 2023 including a number of “speculative” orders, equaling last year's record run rate (24 orders placed in 2022). Meanwhile, 5 WTIV orders were reported globally in 1H 2023 (4 by Chinese owners, 1 international), with activity having eased back following record newbuild orders last year (30 orders, albeit 26 were Chinese owners for principally domestic market use).
  • Owners have continued to focus on supporting developers to be ‘green through the supply chain’, especially in the C/SOV sector; all 46 C/SOVs on order are set to feature battery packs, while 9 are set to be alternative fuel capable, including 7 methanol dual-fuel units.

Tightening Wind Vessel Markets

  • The European WTIV market remains strong, with WTIV utilization in the region having firmed seasonally to reach 91% at the start of June. The trend towards longer-term WTIV charters has continued to develop with the European market expected to tighten towards the middle of the decade; several developers have booked WTIVs on multi-year charters to secure future installation capacity.
  • Meanwhile, the European 'W2W' market is expected to remain very tight across the summer of 2023; rate assessments for >40 pax SPS 'W2W' units are up ~35% y-o-y.

Energy Transition & Energy Security in Focus

  • We expect the offshore wind sector to play a vital role in global energy transition; offshore wind could provide between 7% and 9% of global energy supply by 2050 (it is just 0.4% today; see the Clarksons Research Energy Transition Model for more details) supported by energy security requirements and Energy Transition trends. Globally, our projections suggest ~250 GW of active capacity and ~30,000 active turbines by 2030 (today there is 62.8 GW and 12,440 turbines).

A more detailed half yearly review is available on request or is downloadable from Renewables Intelligence Network for subscribers. For subscription or trial details to Renewables Intelligence Network, contact research.crs@clarksons.com. Any views or opinions presented above are solely those of the author and do not necessarily represent those of the Clarksons group.

Renewables Intelligence Network (RIN) is a powerful new offering from Clarksons Research covering both macro and granular data, intelligence and forecasts around: long term Energy Transition modeling; project tracking of offshore wind farms; detailed country briefs and forecasts; profiles of all developers involved in offshore renewables; the offshore "wind" fleet and the vessels, owners and yards involved; green technology across this fleet; dashboard analytics; dynamic mapping and deployment analysis; port analysis; tidal, hydrogen and carbon capture projects and a comprehensive intelligence report series.

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