International offshore wind: Floating offshore wind

Market overview

DNV’s Energy Transition Outlook forecasts that 15 per cent of all offshore wind installed capacity will come from floating projects by 2050¹. Floating offshore wind (FLOW) technology enables access to wind-generated energy at ocean depths of over 60m, a resource that fixed-base wind cannot currently harness. Around 80 percent of the offshore wind resources globally are located in deep waters and, as a result, floating technology will open up new markets for offshore wind development. Floating technology is also expected to allow wind generation that is decoupled from weather patterns faced by fixed-base turbines located nearer the shore, smoothing the effects of intermittency.

Early markets will likely include the UK, France, South Korea and Japan…

The UK has been an early market-leader in FLOW and we are now seeing the deployment of pilot projects and pre-commercial sites in several other jurisdictions, including France, Japan and the US. In the short-term, Catapult ORE predicts that FLOW deployment will be consolidated in a selection of markets which have benefited from successful pilot projects, touting the United Kingdom, South Korea, Japan and France as jurisdictions looking to deploy commercial scale projects this decade, with 18 further territories flagged as important in the near-term². In the longer-term, the World Bank has reported that FLOW could swiftly take a leading role in the energy production mix of markets such as Brazil, India, Morocco, South Africa, Turkey and Vietnam, having the potential to add over 2TW to the global fleet in coming decades.

Tim Pick, the UK’s first offshore wind champion, highlights FLOW as one particular area in which the UK Government should focus its care and attention, noting the following as key factors to realizing FLOW’s potential:

• Supporting innovation to achieve the commercialization of FLOW;
• Taking a sustainable approach to the CfD auction process; and
• Accelerating investment in port infrastructure³.

Whilst it is expected that the main roll-out of FLOW will take place during the 2030s, the 2020s will play an important role in realising the necessary cost reductions required to capture industrial benefits and early mover advantages. Up to 15GW of installed capacity could be operational by 2030 if new markets open up and countries create the necessary regulatory frameworks and supply chains to achieve commercialisation.

Increased investment is expected in the next 12 months…

Capital is already being injected into the FLOW sector. During 2023, Copenhagen Infrastructure Partners announced its intention to invest €8bn into the 2 GW Nortada FLOW project off the coast of Portugal, and EDF recently purchased the Newcastle Offshore Wind project, a FLOW project in Australia with a potential capacity of up to 10GW. In a survey carried out DNV, 60 percent of organizations with revenue-producing businesses in the wind sector anticipate increased investment in FLOW during 2023⁴. By 2050, it is projected that up to £500bn could be invested globally in capital expenditure alone in the FLOW sector, and in the UK The Crown Estate has indicated that during the course of 2024 a new pilot fund will be introduced to accelerate supply chain projects in the FLOW sector⁵.

The floating wind industry is a fast-developing market, but in order to continue that development, projects will need to secure the requisite funding. To date, political support and government funding has played a key role in the development of projects. Scotland’s ScotWind leasing round represented the first leasing auction involving sea-bed sites capable of gigawatt scale FLOW projects. Further sites have been made available in Europe through the 4GW Celtic Sea floating wind auction in the UK (see more below) and the 500 MW A06 auction in France. On the face of it, ScotWind was a resounding success story for FLOW, with approximately 65 per cent (over 15GW) of the leasing sites on offer supporting floating technologies (see Image 1).

In December 2023, The Crown Estate issued its Information Memorandum for Leasing Round 5 in the UK, which primarily aims to establish a new floating wind sector in the Celtic Sea. The Celtic Sea and the North East of England have been identified as significant opportunities for FLOW projects, and the UK government and The Crown Estate confirmed in Autumn 2023 the intention to make a further 12GW of capacity available in the Celtic Sea in due course. The framework of this upcoming leasing round is being designed to de-risk the process for bidders, for example by introducing a 50% reduction in annual option fees if project consenting causes undue delays to the project’s development and carrying out an upfront, Plan-Level Habitats Regulation Assessment in tandem with the spatial design process. This will be the first tender dedicated to FLOW technologies, and represents an opportunity for developers to demonstrate the readiness of commercial-scale FLOW projects in a mature market like the UK. The delivery of large scale projects will be contingent on suitable port infrastructure.

There is some misalignment in targets being set at a government level…

However, on closer inspection, the ambitious goals of the ScotWind leasing round are at odds with the more conservative targets set by the Scottish government: 30GW and 5GW respectively, each with the same delivery date of 2030. Whilst developers are displaying a keen appetite for FLOW, and investors are spending the time familiarising themselves with the technology, there is a current lack of clarity at the government level around consenting and subsidy regimes. Moreover, grid constraints and misalignment between grid applications, permitting and leasing round are likely causing uncertainty for offshore wind projects. In 2022, both The Crown Estate and Crown Estate Scotland entered into “Statements of Intent” with the Electricity System Operator to enable improved coordination between leasing activity and transmission system design activities. The UK’s Leasing Round 5 will be the first to benefit from such improved alignment. For developers to benefit from the same economies of scale as fixed-base offshore wind 20 years ago, the first phase of FLOW projects need to be commissioned with support and greater clarity, and without delay.

Source: ScotWind - 11GW connected by 2030 | HIE (offshorewindscotland.org.uk)

Focus on: Technology risk

The technology used in FLOW is similar in many respects to fixed-base offshore wind; numerous components are directly transferable from fixed-base, and other aspects will only need minor adjustment. To some extent, FLOW technologies can be viewed as a new subset of components being combined with existing turbines, substations and transmission systems. This provides both developers and investors with experience in the fixed-base offshore wind sector with a solid foundation in the deployment of floating technologies. However, technology risk will be one of the key bankability hurdles that developers will need to clear before commercial projects are able to raise debt finance and obtain investment from the private sector.

Fixed-base and floating wind are “parallel industries”…

Offshore wind developer BlueFloat Energy thinks of fixed base and FLOW as two “parallel industries”, noting that the “development strategy [for FLOW] requires a very different approach and mindset”. One of the notable technological differences is the foundation itself. The choice of floating foundation will depend on the location of the project, seabed conditions, predicted wind speeds and turbine size. At present, there are in excess of 50 different FLOW concepts in development⁶. Three notable floating structures have been deployed in pilot and pre-commercial projects to date: the spar-buoy, the semi-submersible and the tension leg platform (see Image 2 below). Variations of these technologies are also being developed, such as the mounting of multiple turbines on a single platform, and the barge floating concept.

The sheer volume of different concepts poses a barrier to cost reductions. It prevents the supply chain from adapting to specific manufacturing requirements and restricts OEMs’ ability to refine components that are being adapted for the floating foundations. Moreover, the configuration of port infrastructure will be dictated by the direction of substructure technology, and this uncertainty also limits the ability of banks to mitigate or reduce any perceived technology risks. Once the industry can settle on the most efficient and popular technologies, the FLOW sector will benefit from the standardization process which has been enjoyed in other mature sectors.

Developers will need to be aware of the bankability challenges of a FLOW project…

Banks will likely be concerned about the interface between the wind turbine generator and the floating foundation. Robust analysis from the technical advisor in terms of design and load will be required to give potential financiers the requisite level of comfort to fund. Other points of focus in the due diligence exercise may include:

• the use of novel dynamic cabling;
• turbine configuration and the corresponding risks of inter-array cable failure;
• supply chain challenges; and
• the general uncertainty around the O&M strategy borne out of the limited experience in the sector.

Despite the experience of developers in the fixed-base offshore wind sector to date, the banking market may be concerned with the lack of a track record for delivering large scale FLOW projects. Early engagement with lenders will be paramount to managing technology risk for the first projects seeking construction phase financing⁷. An understanding of these risks and their mitigation strategies will be key to unlocking finance.

Generally, FLOW requires larger turbines than its fixed-base counterpart, with structures as tall as 280m. These larger turbines can withstand high wind-speeds and generate higher output per turbine. Despite an average turbine rating of 8.5MW installed to date, the latest models on the market have already reached 9.5 MW, with 13-15 MW turbines expected by 2025. Capacity factors may also be higher for FLOW when compared to fixed-base offshore wind. Hywind Scotland has reportedly average capacity factors of 49.5 percent in the 12 months to end of May 2022, but is set to be taken offline for three to four months this summer for “heavy maintenance”. The WindFloat Atlantic project, which uses semi-submersible floating technology, recently completed its third year of operations and reached electricity production of 80 GWh in 2023. This is encouraging, but there remains limited performance data for large scale projects in the sector compared to other more mature sectors. If developers look to raise third party financing for the first commercial stage projects, input from an energy yield advisor and market advisor will be important, given the likely reliance on modelled data.

Focus on: Construction

There are parallels in terms of construction strategy between fixed-base offshore wind and FLOW projects. For example, it is expected that a multi-contract approach will be adopted. This will require focus on factors such as interface risk, contingency in the project budget and buffer in the construction program – risks with which developers and financiers alike will be familiar with from their experience in fixed-base offshore wind. Risk allocation across core packages such as turbine supply will likely remain unchanged. One of the main advantages of FLOW is the ability to carry out important construction works at port rather than at sea (the latter requiring the use of expensive heavy-lift vessels, weather windows and additional equipment). Dry-dock construction enables onshore assembly and allows contractors to tow the structures towards the final destination, potentially resulting in significant savings in deployment costs.

The development of port infrastructure will be key…

The manufacture, marshalling and assembly of the component parts of a floating offshore wind farm requires specialized ports and large storage facilities. Existing ports will need to be adapted and new facilities built at scale to meet the needs of the project pipeline across the globe. These upgrades are driven by the deep water requirements at assembly stage and the need for specialized storage space for heavy structures. There is currently a lack of funding in some key markets for the upgrading existing port infrastructure, and there are insufficient existing ports to meet the current targets for FLOW projects. The Port-La-Nouvelle near Montpellier is one example of repurposing a port which traditionally handled agricultural exports, and €340mn of funding has been raised to transform the port into a hub for the construction of floating offshore wind farms.

More recently, a US private equity fund committed £300m to redevelop the Ardersier port near Inverness, Scotland to support North Sea wind power. The Scottish government also announced in Q4 2024 that up to £500 million will be made available to accelerate private investment in ports and manufacturing work over a five year period. The Floating Offshore Wind Taskforce predict that approximately £4bn of funding will be required for investment into the port infrastructure required by 2030⁸.

Governments will likely be under pressure in the coming years to support investment in the FLOW supply chain and de-risk private investment in key infrastructure. Indeed, there are already some encouraging signs. On March30 2023, the UK Government announced the launch of the £160million Floating Offshore Wind Manufacturing Investment Scheme (FLOWMIS) - grant funding aimed at supporting critical port infrastructure that will enable delivery of FLOW projects. FLOWMIS primarily de-risks the development cycle time effects faced by the FLOW sector, engendered by the cautious approach sponsors take to development in light of factors such as late-stage CfD auction announcements and delays in granting leasing rights.

As turbines get larger, companies are likely to encounter economic barriers at the installation phase. This is because there are currently limited options for the installation of larger turbines, the vessels required for such operations are scarce and the rates are expensive. The volume of vessels required to install the mooring and dynamic cables required for a FLOW project will likely place additional constraints on the existing offshore wind supply chain. Further pressure will come from the need for vessels to tow the floating structures to the project site. As a result, there is no clear consensus within the industry as to whether the tow-to-shore model is a positive or negative for the FLOW industry when compared to fixed-base technologies. Rystad Energy predicts that demand for these vessels will outpace its supply by 2024, as more countries seek to build offshore wind farms to meet their net-zero targets.

The distance from shore will introduce new complexities…

Developments in the sector will also create challenges in developing the supporting infrastructure to unlock technological advances. For example, FLOW projects will require more dynamic cabling, including additional wave and impact loads from drifting objects. This increases the risk of cable failure compared to fixed-base turbines. Cable configuration between the arrays will also differ from fixed-base projects, introducing an additional layer of design risk. Deeper waters will require optimized foundation designs, and new installation vessels will be needed to cope with increasingly distant wind farm sites. The proximity of the offshore site to the onshore grid connection point will have an impact on project costs: the further the site is from the shore, the longer the export cables. Distance therefore has the potential to increase capital costs and transmission losses. Novel electrical cable systems may be required to minimize transmission losses and improve reliability, particularly if the transmission distance is greater than 70km. Projects such as Dogger Bank in the UK have already adopted high voltage direct current (HVDC) cables, which will allow developers and investors to get comfortable with the functionality of such assets before they are adopted by commercial-scale FLOW projects.

Focus on: Operation and maintenance

As for construction risk, many similarities exist between fixed and floating projects in terms of routine O&M issues. Many aspects of operations are directly transferable from fixed base to FLOW, such as the management of turbine downtime and contractual framework for the provision of O&M services. These synergies will allow various developers to draw on the lessons learned from experience in the fixed-base offshore wind sector or offshore oil and gas operations. However, there will be some new considerations, such as the handling of major repairs in FLOW. When repairing the gearbox or blades of the turbine, the floating turbine can be disconnected and tugged to shore. This means that repairs could be done portside rather than offshore, making repairs easier to carry out and reducing vessel and helicopter costs (which form a significant part of O&M expenditure.) Advances in technology are also expected to precipitate reduced O&M downtime and decreased annual operational costs. However, in consideration of the O&M tow-back strategy, analysis from BVG Associates suggests that a gigawatt scale windfarm could incur up to seven tow-backs per year as a result of necessary major component changes during the operational phase. Given the cost per tow-back could swell into the millions (GBP), there are some concerns about whether this strategy is truly scalable. Tow-to-shore O&M also requires port availability, which is already limited in today’s offshore wind sector and will be required by FLOW projects in the construction phase.

The primary driver of cost reductions over the next decade will be…

This issue highlights a “known unknown” for commercial lenders who may consider financing the construction and operation of such an asset. There is general uncertainty, borne out of a lack of experience to date, as to what the most efficient O&M strategy will be and what level of contingency will need to be budgeted for O&M expenditure throughout the life of the project.

A credit risk analysis will be key to banking FLOW technologies, with insurance cover and performance assumptions receiving scrutiny. There may also be limits on key traditional protections such as manufacturer warranties given the novel environment of the extreme offshore conditions and less mature foundation designs. Currently, some sources have predicted that operational expenditure for FLOW projects could be up to five times higher than fixed-base projects, although in some cases this is projected to drop to parity by 2030. The primary driver of cost reductions over the next decade will be scaling up turbine size, and therefore overall project capacity. Other factors, such as operational experience and the development of floating infrastructure improvements, will also play an important role. Ensuring that the necessary infrastructure is available to support both the manufacturing of equipment and carrying out the maintenance of the turbine in the operational phase will be important. This statement is validated by the pressure that existing infrastructure already faces from oil and gas decommissioning processes and the expanding fixed-base offshore wind sector.

Developers are beginning to collect data on operational performance…

Developers are starting to build the data required to select a preferred O&M strategy. The 25 MW WindFloat Atlantic project, which commissioned in 2020, recorded 78 GWh of electricity produced in 2022. This represents a 5 percent increase on electrical output for 2021, and this improvement is partly driven by preventative and corrective O&M activities. WindFloat’s project director, Jose Pinheiro, has highlighted the “additional acquired knowledge to [Ocean Winds]…some [of which is] very valuable and differentiating when projecting future floating commercial projects”. These optimizations will enable developers to collate the reliable data needed to bring pilot projects to commercial scale.

Focus on: Policy

Despite its potential, FLOW is still significantly more expensive than fixed-base offshore wind. Coordinated policy and a clear route to market are needed if the floating wind industry is to achieve full commercialization in the 2030s. In order to support the build out of FLOW projects, government will need to create certainty through policy and regulatory frameworks, adopting or expanding national schemes such as feed-in tariffs, green certificates and contracts for difference (CfD) to support this new technology. Investors will want to be confident that the policies and targets adopted are party-agnostic and will last beyond the term of the current government. The UK has the largest pipeline globally for FLOW projects, as well as the most ambitious national targets and the highest capacity of installed FLOW projects, including Hywind and Kincardine⁹. Policy in the UK therefore serves as a useful case study, as the CfD regime will likely be key to securing the certainty of revenue streams required to attract investment in the sector.

The outcome of AR5 has bearing on the momentum of the FLOW sector…

In CfD allocation round 4 (AR4), FLOW was eligible for up to £75m in the emerging technologies pot as it was defined as a district technology category. In 2022, Hexicon’s TwinHub project off the coast of south-west England became the first FLOW project to secure a CfD. With a strike price of £87.30, TwinHub has set a benchmark for developers bidding in future auction rounds.

CfD allocation round 5 (AR5) saw fixed-base offshore wind competing against more mature technologies, and FLOW competing in a separate pot against other nascent technologies including geothermal and tidal stream technologies. An administrative strike price of £116/MWh was set for FLOW in AR5. Many anticipated that this strike price would not be sufficient to bring projects forward, something that was ultimately confirmed when no new offshore wind projects (floating or otherwise) gained government support under the CfD regime under AR5.

AR5 was the first CfD auction round in the UK being tendered on an accelerated timeline, following the UK government’s ambitious net-zero strategies announced last year. These improvements will allow for more frequent CfD awards in the FLOW sector, and therefore a larger pipeline of projects reaching FID each year.

With the UK government aiming for 24 GW of installed FLOW projects in the Celtic Sea by 2045, and the prominence of floating technologies in the ScotWind leasing round, the outcome of AR5 could be seen as a set-back the sector. It seems that the UK government now has further work to do to develop the CfD regime to continue to support FLOW projects and the success of AR6 will be important for the continued momentum of the FLOW industry in the UK. With the administrative strike price for floating offshore wind being set at £176/MWh (2012 prices) and the technology’s inclusion in Pot 2 alongside geothermal, tidal stream, wave and others, industry will be closely watching the outcome of the upcoming AR6 auction.

The UK government has recognized potential ambiguities within the current definition of “floating offshore wind” in the CfD (Allocation) Regulations 2014, which require all turbines to be “mounted on a floating foundation¹⁰”. This limitation may restrict projects using innovative foundation designs from competing in the floating offshore wind category. As part of the consultation, the UK sought stakeholder input on how to provide greater clarity on the definition of “floating offshore wind”, in order to avoid projects failing to obtain a CfD due to deficiencies in the underlying eligibility criteria. No firm policy position was reached in the UK governments consultation response of July 2023, instead it stated it would keep this area under review and continue to work with industry and other stakeholders to develop a long-term solution to the question of defining floating offshore wind.

Beyond the UK, other markets are looking to level-up the support for floating technologies. The European Commission recently approved French plans to make more than €2bn available in support for a new floating wind farm off the coast of Brittany via a scheme similar to the UK’s CfD regime. The Global Wind Energy Council has flagged the support regime in Ireland as having a positive outlook for FLOW in the future, and markets such as California and Morocco have favourable support mechanisms which can be adapted from other renewable generation technologies¹¹. In the US, the Biden administration has set a FLOW target of 15GW by 2035, whilst the state of California aims to have at least 25GW of FLOW capacity commissioned by 2045. Reducing costs will be pivotal to meeting these targets. The US’s “Floating Wind Shot” initiative aims to reduce the levelized cost of energy of FLOW by 70 percent to support these timelines, and the presence of 43 bidders in the recent Californian auction reflects developer confidence in the burgeoning sector. The US Inflation Reduction Act and the European Union’s Green Deal Industrial Plan both support the advent of commercial scale FLOW, and have set a new standard for supporting the commercialization of FLOW.

Delays to FLOW development will set the sector back further than more mature technologies…

Further progress is required to enable the commercialization of FLOW by the end of the decade. In its recent energy white paper¹², Orsted appealed to policymakers aiming to support the deployment of FLOW to consider the following:

1. Ensuring that FLOW does not compete in the same subsidy pots as fixed-bottom wind projects;
2. Introducing criteria that doesn’t relate to price into competitive tender processes;
3. Enabling greater investment into port infrastructure; and
4. Recognizing the balance of boosting a local supply chain and growing the industry globally.

4C Offshore warns in its Global Floating Wind Report that targets for 2030 FLOW projects may be missed globally. The cause of the anticipated delays was not reported as supply chain issues or increased capex costs, but delayed authorization processes. Accelerated development is valuable across all renewable assets, but the benefits are magnified for nascent technologies such as FLOW. Conversely, delays to FLOW development will set the sector back further than more mature technologies. Pipeline size is not enough: for developers to deliver the projects they have committed to, barriers to deployment at the government level must be managed urgently as the halfway point of this decade approaches. Renewable UK (RUK) has indicated its belief that sustainable pricing will be key to ensuring that domestic supply chain companies remain at the forefront of developing FLOW technology and ensuring that developers can bid competitively in the emerging technologies pot.

Offtake strategies

In fixed-base offshore wind projects, traditional bankable offtake strategies have involved long term power purchase agreements with a utility, or more recently a corporation. From a bankability perspective, importance has been placed on the credit worthiness of the offtaker and the alignment of the contract duration with the underlying debt tenor. Whilst this approach is unlikely to change, it is possible that FLOW projects may look to alternative routes to market to compliment, or in some cases replace, more traditional solutions.

A correlation between government FLOW targets and domestic hydrogen ambitions…

Whilst power generation and electricity sales will certainly form part of the picture, it is expected that power-to-X solutions such as green hydrogen may play a role in FLOW’s energy transition role. This is supported by the recent ScotWind leasing round bids including tie ups with hydrogen electrolyser projects and the Sealhyfe hydrogen production facility in France being set to connect to Ideol’s FloatGen prototype 20km off the coast of Brittany. It is likely that there will be a direct correlation between jurisdictions supporting the commercialization of floating offshore wind and implementing policies with a hydrogen commitment. The Global Wind Energy Council has suggested that “a target dedicated to hydrogen may indicate a preference for relatively high load factor renewables like floating wind”¹³.

The conversion of electrons to molecules represents an opportunity for FLOW…

However, it is recognized by many commentators that the economics of using offshore wind to produce green hydrogen at scale will prove challenging.

Some of the key components to making green hydrogen feasible include developing a market for hydrogen offtake, repurposing existing infrastructure, and the presence of a supportive stakeholder group in the sector. The main hurdles for a successful power-to-X strategy will be lowering cost and realizing the technological improvements required to make green hydrogen production from FLOW projects viable. The economics of using renewable generation to produce green hydrogen is being tested on smaller scale solar and onshore wind projects, such as NREL’s Wind2H2 demonstration project in Colorado and is being planned by developers such as SSE at its Gordonbush onshore wind farm in the UK. Once there is confidence that the wind-to-hydrogen model is scalable, this route to market may be adopted by fixed-base and floating offshore wind projects. The recent announcement that SSE and Equinor are considering green hydrogen as an offtake solution for the Dogger Bank D project is an encouraging sign for the offshore wind/green hydrogen story. Similarly, RWE’s Pembroke NetZero Centre in the UK, which has the potential to grow to several GW, has links to FLOW in the Celtic Sea (see Image 3 below).

Source: pnzc-infographic-eng.jpg (3508×2480) (rwe.com)

Decarbonizing the oil and gas sector…

Oil majors are well-placed to capitalize on the development of FLOW because of their technical experience in offshore operations. Considering the prevalence of floating infrastructure in the oil and gas industry, interest from companies like bp, Shell, Equinor and Repsol is unsurprising. FLOW can also contribute to lower carbon operations of existing oil and gas fields. For example, Equinor is developing the 88 MW Hywind Tampen project to supply its Gullfaks and Snorre oil fields with renewable energy to power drilling operations (see Image 4 below). Norway’s state-owned Enova has approved an application for up to NKr2.3bn ($256 million) in funding for the project.

Source: https://www.rechargenews.com/wind/siemens-gamesa-tops-hywind-tampen-floating-wind-bonanza/2-1-698429/

Scotland’s recent INTOG leasing round is one example of a policy focused on decarbonizing offshore oil and gas production. It was announced on March 24, 2023 that 13 projects out of a total of 19 applications (five for “innovation” and eight for “targeted oil and gas”) have been offered Exclusivity Agreements following the submission of applications. By the end of 2023, 12 of those 13 projects had signed Exclusivity Agreements, representing up to 449 MW of capacity for “IN” projects and up to 5 GW for “TOG” projects. Cerulean Winds, a renewable energy infrastructure developer, had previously confirmed that it would compete for several seabed lease sites representing 6 GW of combined capacity in the recent INTOG leasing round for FLOW projects. Cerulean Winds’ founding director, Dan Jackson, has also flagged ammonia and methanol markets as green fuel opportunities for FLOW. These additional markets are given credence by the current limits on grid infrastructure in the UK and elsewhere, which will not be capable of accommodating surplus power for the foreseeable future under its current configuration.

Considering the North Sea Transition Sector Deal in the UK, and ambitious decarbonization targets set by governments around the world, FLOW is uniquely positioned to reduce the carbon-intensity of existing oil and gas operations.

Market Outlook

The future for FLOW looks positive, but the industry’s success depends on the adoption of supportive policy frameworks, greater public funding, and continued technological development. The cost reductions associated with these factors will be key to the rapid deployment of FLOW globally, and meeting the ambitious targets set by governments and developers for the sector.

By 2050, up to 300 GW of floating offshore wind could be installed globally…

In total, ORE Catapult estimates that 54 countries pass the initial technical and socio-economic thresholds evaluated for FLOW development. It is also estimated that these identified markets have a combined technical resource potential exceeding 32,000 GW and that by 2050 up to 300 GW of FLOW could be installed globally¹⁴. ORE Catapult have identified four key characteristics of the FLOW markets expected to flourish in the next decade.

1. An existing fixed-bottom offshore wind market is key, as such countries are more likely to have a pre-existing framework for the development of offshore projects and an established supply chain.
2. The presence of pilot FLOW projects will also boost the likelihood of success, placing countries such as the UK, France and Portugal in an advantageous position.
3. Government policy will be pivotal to the success of specific geographies, particularly in terms of obtaining the necessary leasing and consenting rights without delay.
4. The supportiveness of subsidy regimes will dictate the level of investor incentive.

Strategic collaborations between developers are starting to emerge…

If the industry can achieve the targets set by Equinor and Masdar on the Hywind project of reducing the levelized cost of energy to €40-60/MWh by 2030, FLOW could become cost competitive with other mature green energy sources. Many experienced developers are beginning to position themselves more aggressively in the floating industry by building their project pipelines and forging alliances with other key players. WindPlus, the collaboration between OceanWinds (a 50:50 joint venture between Engie and EDPR), Repsol and Principle Power, is one example of developers pooling their experience and resources. Some developers are collaborating strategically to break into specific jurisdictions. RWE has reportedly teamed-up with the Spanish multinational Ferrovial to develop floating offshore wind farms in Spain. Lastly, collaboration between developers and technology providers, such as Blue Gem Wind (as joint venture between Total and Simply Blue Energy), will likely prove a powerful partnership model as preferred technologies begin to take a market share.

Source: GWEC-Report-Floating-Offshore-Wind-A-Global-Opportunity.pdf

FLOW is not expected to commercialize earlier than 2030 (see Image 5 above for a forecast for some of the anticipated key jurisdictions), but for the UK and other early moving markets such as Portugal, Japan and France, the 2020s will be a pivotal period for deploying turbines and proving that the technology is scalable.

Looking forward, Portugal has indicated a further 10 GW of FLOW projects through successive auctions between now and 2030, with developers presenting non-binding declarations of interest during November 2023. The European Commission has granted subsidies to the developers for two floating offshore wind farms in the Gulf of Lion (France) expected to have a capacity of between 230MW and 280MW.

Some developers are now entering offshore wind auctions with floating concepts, in competition with fixed-base projects. BlueFloat Energy announced in May 2022 that it will enter Taiwan’s next tender with a 1 GW FLOW project named “Winds of September”. As momentum continues to build throughout the decade, it will become clear whether the necessary components for a commercial-scale FLOW sector have been delivered by governments, developers and financiers around the globe.