Floating offshore wind: Emerging and rapidly growing sector within the wind energy industry

Floating offshore wind (FOW) is an emerging and rapidly growing sector within the renewable energy industry. Unlike traditional bottom-fixed offshore wind turbines that are anchored to the seabed in shallow waters, FOW technology utilizes floating platforms, mooring lines, and anchoring systems, allowing turbines to be deployed in deeper waters where wind resources are stronger and more consistent.

Market Overview & Growth Drivers

The FOW market is on an explosive growth trajectory. In 2024, the global market size was valued at an estimated $367.7 million, but it’s projected to soar to over $7.69 billion by 2034, with a Compound Annual Growth Rate (CAGR) of around 31.5% [1]. This remarkable growth is driven by several key factors:

• Vast Untapped Resource: Approximately 80% of the world’s total offshore wind resource is located in waters too deep for conventional fixed-bottom turbines [6]. FOW technology unlocks this immense potential, especially in countries with limited shallow coastal shelf areas like Japan, Spain, Portugal, and the West Coast of the United States [3].
• Technological Advancements: Continuous innovations in turbine design, platform concepts (e.g., spar-buoy, semi-submersible, and tension-leg platforms), and mooring systems are enhancing stability, reducing costs, and increasing the overall efficiency of FOW projects [6].
• Policy Support: Governments worldwide are implementing supportive policies to accelerate the development of FOW. These include financial incentives like subsidies, tax credits, and viability gap funding (VGF) schemes, as well as regulatory frameworks that streamline permitting and support grid integration [4]. For example, India’s government approved a VGF scheme with a total outlay of over $900 million to kick-start its offshore wind sector [4]. The UK also has an ambitious target of reaching 1 GW for FOW by 2030 [3].
• Increasing Turbine Size: The industry is seeing a shift towards larger, more powerful turbines, with capacities of 10-12 MW and even higher [1]. Larger turbines mean fewer units are needed for the same energy output, leading to economies of scale and a lower Levelized Cost of Energy (LCOE) [5].

Major Players & Projects in Floating Offshore

The FOW industry is currently in a transition from a demonstration phase to commercial-scale projects. Several key players are leading the charge.

Key Companies

• Equinor (Norway): A pioneer in the field, Equinor developed the world’s first floating offshore wind farm, Hywind Scotland [3]. They are also behind the Hywind Tampen project, the world’s largest operational FOW farm, which supplies power to offshore oil and gas platforms [3].
• Vestas & Siemens Gamesa: As major turbine manufacturers, they are at the forefront of developing turbines specifically for FOW applications [2].
• BW Ideol (Norway) & Ocean Winds: These companies specialize in the development and co-development of FOW projects and are instrumental in advancing the technology [2, 3].

Landmark Projects

• Hywind Tampen (Norway): The world’s largest operational floating wind farm, with a capacity of 88 MW, became fully operational in August 2023. It consists of 11 turbines and supplies power to nearby oil and gas platforms [3].
• Kincardine (Scotland): This 50 MW project off the coast of Aberdeen was, at one time, the world’s largest grid-connected floating wind farm [1]. It is capable of powering nearly 35,000 homes [1].
• WindFloat Atlantic (Portugal): Operating since July 2020, this 25 MW project is a notable example of a floating wind farm providing commercial-scale power [3].

Floating Offshore Challenges & Opportunities

While the future of FOW is bright, the industry faces significant hurdles that need to be addressed for widespread commercialization.

Challenges

• • High Cost: FOW still has a higher LCOE compared to fixed-bottom offshore wind, primarily due to the expense of the floating platforms, mooring systems, and dynamic cables [5]. The capital expenditure (CAPEX) for floating wind is still significantly influenced by the floater itself [5].
  • Technological Maturity: The technology is still nascent, with only a few concepts demonstrated at full scale [6]. This immaturity can lead to higher perceived risk for investors, increasing contract prices and financing costs [5].
  • Supply Chain & Infrastructure: The industry lacks a fully mature supply chain and requires substantial investment in port infrastructure for manufacturing, assembly, and maintenance [6]. The high draught of some floating structures, like spar-buoys, requires specialized port facilities with sufficient depth [6].
  • Operation & Maintenance (O&M): Current practice for maintenance involves towing turbines back to port, which is not economically feasible for large-scale, far-shore projects [6]. Developing on-location O&M capabilities is crucial for the industry’s success [6].

Opportunities

• Cost Reduction: Just as with fixed-bottom wind, costs are expected to fall as the industry matures, gains experience, and achieves greater economies of scale [5]. LCOE for FOW is projected to drop from an estimated $207/MWh in 2021 to $64/MWh by 2035 [5].
• Deep-Water Access: The ability to access strong, consistent winds in deep waters gives FOW a clear advantage and a vast market potential [6].
• Supply Chain Synergy: There’s a significant opportunity for the traditional offshore oil and gas supply chain to transition its expertise and infrastructure to the FOW sector [6]. This includes offshore yards, mooring system manufacturers, and offshore support vessel operators [6].
• Global Expansion: FOW opens up new markets for offshore wind, including the deep-water coasts of the US, Japan, South Korea, France, and parts of the Mediterranean, which were previously unsuitable for wind energy development [3].