Technology and cost reductions vital in creating $1 trillion offshore wind business: IEA

The International Energy Agency (IEA) has declared that offshore wind capacity will increase 15-fold over the next two decades, as the world looks to replace fossil fuels with renewable energy to combat climate change.

In a study of offshore wind that the IEA called the ‘most comprehensive to date’, it was found that power from wind turbines at sea accounts for only 0.3% of global electricity generation today.

However, improved technology and sharp cost reductions, coupled with current and proposed government policies, will turn offshore wind into a US$1 trillion business over the next two decades.

“In the past decade, two major areas of technological innovation have been game-changers in the energy system by substantially driving down costs: the shale revolution and the rise of solar PV,” said IEA executive director Fatih Birol.

“And offshore wind has the potential to join their ranks in terms of steep cost reduction,” he added.

Last year it cost more than $4 billion to build a 1GW offshore wind project, including transmission, but the cost is set to drop by more than 40% over the next decade, said the IEA.

“More and more of that potential is coming within reach, but much work remains to be done by governments and industry for it to become a mainstay of clean energy transitions,” warned Birol.