The global installed capacity of the offshore wind industry is expected to reach 250 gigatonnes (GW) by 2030, owing to a boom in new developments, according to a Rystad Energy survey. The cumulative capital and maintenance spending for the decade is expected to total $810 billion, indicating a growing transition in investments away from oil and gas and toward clean energy technology.

The total installed capacity of worldwide offshore wind projects reached 33 GW in 2020, a major accomplishment for a sector that has nearly tripled in size since 2016. We anticipate that the world's installed capacity will touch 109 GW by 2025, growing to 251 GW by 2030, expanding at a rate of 22% per year on average.

This huge growth in capability would necessitate a significant increase in global investment. Rystad Energy forecasts that net spending in 2021 will be $56 billion, with nearly 13 GW of capacity projected to be commissioned, bringing the overall global installed potential to 46 GW.

After a brief fall in 2022 and 2023, annual investment will begin to climb to $126 billion in 2030. Today, CAPEX accounted for 95% of total spending, with opex accounting for just 5 %.  The CAPEX share is projected to fall to about 80% by 2030 when all of the latest added capacity would necessitate increased maintenance investment to operate and sustain.

2030 would be the year when offshore wind CAPEX reaches equilibrium with offshore oil and gas greenfield CAPEX excluding discovery work of $100 billion.

Europe, is projected to continue to lead offshore wind expenditure this decade, with an estimated $300 billion. Any of the properties with the highest capital investments are situated off the coast of the United Kingdom, including Orsted's 4.8 GW Hornsea Two, Three, and Four ventures, which are expected to cost more than $14 billion in CAPEX.

SSE's massive Dogger Bank ventures, which would be built in three 1.2 GW stages, could cost more than $11 billion in capital expenditure, whereas Scottish Power Renewables' 3 GW East Anglia Hub will most likely entail capital expenditures above $8 billion.

China controlled annual investment between 2019 and 2021. The nation is expected to invest around $110 billion this decade. Outside of China, major investment is planned in Asia this year, led by Vietnam and Taiwan. South Korean and Japanese spending will also rise starting in 2023 when more initiatives are planned.

The Americas area is lagging as a result of the US Jones Act and sluggish licensing procedures for the US offshore wind sector, which are setting back the planned start-up years for a variety of wind farms. The country is forecast to invest just about $70 billion in offshore wind developments this decade, which is still a large amount, though far below that of the other regions globally.

Rystad Energy anticipates that North and South America would only begin investing significantly in offshore wind in 2023. The 800-megawatt (MW) Vineyard Wind 1 structure built by Avangrid and the Copenhagen Infrastructure partnership off the coast of Massachusetts would be the first large-scale project in the US, with a contribution of $2.8 billion.

With about 40% of the overall budget, turbine production costs constitute the greatest share of CAPEX for offshore wind projects. This growth is likely to continue as countries, particularly in Europe, increase the use of massive turbines.

The second big cost component for constructing an offshore wind farm is base production, which accounts for around 15% of the total CAPEX in the years leading up to 2030. Since we do not anticipate a large flood of floating foundations this decade, the share of foundation investment dedicated to CAPEX should remain unchanged.

Cable production, includes collection and export cables, accounts for around 14% of overall CAPEX. When coupled with the cost of cable construction, the section accounts for approximately 20% of CAPEX.

This cost will not rise when we reach 2030, since bigger turbines help minimize cable and construction costs, amid projects heading away from shore.

“The massive amount of investment expected in the offshore wind industry this decade represents the lofty goals set by businesses and policymakers alike. “As the industry evolves and economy of scale is recognized, investments could increase even further, resulting in much more installed capacity,” said Petra Manuel, an offshore wind analyst at Rystad Energy.