By Jeremy Hodges and William Mathis
The Paris-based institution estimated investment in the technology is growing 2.2% a year, drawing in $840 billion over the next two decades. To reach goals for reining in fossil-fuel emissions, that funding must reach about $1.2 trillion, meaning annual growth of 4.4%.
The report, focused on one of the fastest emerging technologies in the energy business, indicates the scale of the challenge in shifting the world’s electricity generation business away from fossil fuels.
“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 Fatih Birol, the IEA’s executive director. “Offshore wind has the potential to join their ranks in terms of steep cost reduction.”
The machines sited in water could provide more electricity than there is demand in a number of places including Europe, the U.S. and Japan, according to the agency’s report. That technology has boomed in recent years, particularly in the U.K., and is set to grow in new markets such as the U.S. and China as the cost of installations plunges.
The report anticipates 20 gigawatts of new offshore capacity installed each year, short of the 40 gigawatts-a-year pace that’s needed.
While current offshore wind projects are limited to relatively shallow waters, new floating turbines could allow developers to go expand their reach, with the potential to meet total electricity demand 11 times over. The Paris-based organization that advises rich nations on energy policy said the industry now centered in northern Europe will 15-fold globally by 2040.
The world had almost 22 gigawatts of offshore wind installed in 2018, and that’s likely to more than double by 2022, according to BloombergNEF data. It expects 2030 capacity of 177 gigawatts. The IEA’s forecast for new offshore wind capacity may be overly optimistic, according to BNEF wind analyst Tom Harries.
“It’s a struggle to see how they can get to that number given the pipeline of work that we see out to 2030,” Harries said.
By meeting the IEA forecasts, offshore wind could avoid as much as 7 billion tons of CO2 emissions from the power sector and reduce air pollution the agency said.