The offshore wind industry has grown nearly five-fold since 2011, with 23 gigawatts installed at the end of 2018 and a large volume of planned projects in Europe, China and the United States. Offshore wind now represents about $26 billion in annual investments – or 8 percent of new global investments in clean energy – and this proportion is set to increase dramatically, with about $500 billion expected to be invested in offshore wind projects by 2030.
This represents an important opportunity for countries with strong offshore wind resources, including Brazil, Indonesia, India, the Philippines, South Africa, Sri Lanka, and Vietnam. Offshore wind can also provide additional clean generation capacity for developing countries with populations living without access to reliable electricity. It is also a significant opportunity for cost-competitive, large-scale fixed or floating offshore wind projects located close to areas of high energy demand.
Considering the recent and projected cost reductions, the unique benefits of offshore wind, and the urgent need to decarbonize electricity systems, there is an urgent need to accelerate the expansion of offshore wind in developing countries while helping them to tackle the challenges that often arise with the introduction of a new technology and creation of new markets.
A New Global Program to Accelerate Wind Uptake
The World Bank Group’s new Offshore Wind Program, launched in March 2019, aims to fast-track the adoption of offshore wind energy in developing countries.
Led by ESMAP, in partnership with the International Finance Corporation (IFC), the US$5 million program will help emerging markets assess their offshore wind potential and provide technical assistance to develop a growing pipeline of projects that are ready for investment by renewable energy developers. The program is part of the United Kingdom’s overall GBP£20 million contribution to ESMAP.
Over the next five years, this global approach will help to raise awareness of offshore wind technologies and opportunities, tackle the common market-related issues, transfer experience from more mature markets, and customize solutions to local contexts.
Three Areas of Focus
Knowledge Generation, Dissemination, and Information Exchange – publish a major body of knowledge assessing the prospects for offshore wind in emerging markets, expected costs, regulatory shortfalls, environmental and social issues, while providing recommendations for improved coordination and cost reduction.
Upstream Country Studies and Planning Work – support demand-driven work at country-level with an initial focus on upstream studies to assess the potential of offshore wind, develop roadmaps, and carry out planning studies.
Investment Plan to Finance downstream feasibility studies – based on country demand, help prepare investment plans to seek financing (including climate funds) for pre-development projects to identify prospective sites. This could eventually lead to World Bank financing to support infrastructure investments with IFC financing provided to the winning developers, together with other development partners and commercial finance.