Many nations are setting renewable energy standards, growing concerned over the environmental impact of fossil fuels and political strife in many oil-exporting nations.
In the European Union, the goal is to be 20% below 1990 levels of carbon emissions by 2020, and it is even considering changing this to 30% by 2030.
And one of its major focuses in this reduction is offshore wind power.
Wind power in general is on the rise, but offshore capacity has doubled in the last year and the EU wants to build it up even more.
In 2011, offshore wind capacity was at 866 megawatts in Europe alone. Worldwide, it could make up 8% of the global energy market by 2016, Steen Broust Nielsen of Make Consultants believes.
Though onshore wind is currently more prevalent and cheaper than offshore wind, offshore has advantages that could quickly change this if the right investments come along.
Offshore turbines could require less transportation after construction. They can be much bigger than onshore turbines because companies don’t need to be concerned about taking up land. And there’s a vast amount of space for them. Christian Kjaer, chief executive at European Wind Energy Association, said:
“In the North Sea alone we have a potential to economically exploit the offshore resources to cover seven times Europe’s total energy consumption. We wouldn’t have to import fuel if we can tap into that.”
Utilities are the leaders in offshore projects, accounting for 80% of total offshore parks. DONG Energy and E.ON AG (PINK: EONGY) are major players, and Electricite de France SA (EPA: EDF) and Alstom SA (EPA: ALO) are among the many companies trying to moving into the field.
Britain has 55% of Europe’s offshore wind in its waters, leading the EU’s industry. But other countries are seeing the potential. France is currently planning its first offshore wind farm.
But Ditlev Engel, chief executive of Vestas Wind Systems SA (PINK: VWDRY), is encouraging countries to see the reality of the situation. Offshore wind is still not entirely cost-effective:
“Offshore costs need to be cut by 30% to 40%. And to make it realistic, it requires an improvement in technology. Otherwise it won’t happen.”
Yet with an industry that is this increasingly popular, and so many countries scrambling to get involved, the investments to fuel that improvement may not be far off.