Europe accounts for more than 90 percent of global offshore wind power capacity. Thanks to the economic and regulatory framework of the continent, the supply chain is maturing, competition is emerging, and industry experience is profound. The level of acceptance of the energy source has thereby improved and pushed its price down. However, McKinsey expects in Winds of change? Why offshore wind might be the next big thing, that the industry still needs to improve.
Currently, the total lifetime costs of offshore wind production are still above the costs of onshore generation and solar energy. Investments and expenses for this technology are naturally higher due to more materials being required to build at sea as well as higher installation and maintenance costs. However, improvements in technologies such as larger turbines and greater durability are decreasing costs per megawatt.
Going deeper in improvements in engineering and construction, operations and maintenance, as well as financing, McKinsey is optimistic that offshore wind can make a valuable contribution to the energy mix. With fast growth, increased investment, bigger parks, falling costs and new technologies, offshore wind can become competitive to solar power within the decade.