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Offshore Wind Sector Faces Setbacks As Global Targets Prove Elusive

by THEFUTURE.TEAM

November 18, 2024

The global offshore wind industry is grappling with significant challenges threatening to derail ambitious government targets worldwide. A confluence of factors, including soaring costs, project delays, and limited investment, has cast doubt on the sector’s ability to meet its lofty goals, potentially hampering efforts to combat climate change.

Industry Struggles Amid Rising Costs and Delays

Recent data paints a sobering picture of the industry’s current state. Offshore wind farms now face a global average cost of $230 per megawatt-hour (MWh), marking a 30-40% increase over the past two years. This figure is more than triple the average cost of onshore wind facilities, which stands at $75/MWh.

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The impact of these escalating costs is evident in the actions of major industry players. BP is considering divesting a stake in its offshore wind business, while Equinor has abandoned investments in Vietnam, Spain, and Portugal. GE Vernova, a leading turbine supplier, has halted new orders due to unfavourable market conditions.

Global Targets Slipping Away

The International Renewable Energy Agency (IRENA) had projected that offshore wind capacity needed to reach 494 GW by 2030 to meet global renewable energy goals. However, IRENA’s Director-General now estimates the industry will fall short of this target by a third. Other research firms suggest that 500 GW of offshore wind installations may not be achieved until after 2035.

Regional Challenges and Political Uncertainties

In the United States, the offshore wind sector faces additional hurdles. Despite ambitious goals set by the Biden administration, the industry has been plagued by project cancellations, suspended auctions, and construction setbacks. The potential shift in political leadership following the recent election has further heightened concerns about the sector’s future.

Europe is also struggling to meet its targets. Major markets like the United Kingdom, Germany, and the Netherlands are expected to achieve only 60-70% of their goals. The European Union as a whole is projected to reach just 54 GW of offshore wind capacity by 2030, falling far short of the 120 GW pledged by North Sea countries.

China: A Lone Bright Spot

Bucking the global trend, China has emerged as a leader in offshore wind development. Backed by government subsidies and access to locally produced components, China accounted for over half of global offshore wind installations in 2023. The country is expected to continue its rapid expansion, with projections of 11-16 GW of annual installations in the coming years.

Industry Calls for Support

As the offshore wind sector navigates these choppy waters, industry leaders are calling for increased government support and policy interventions. While acknowledging the risk of missing targets, experts emphasize that with the right policies in place, the industry can still make significant strides towards its goals.

The coming years will be crucial in determining whether the offshore wind industry can overcome its current challenges and play the pivotal role envisioned in the global transition to renewable energy.

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Only 1% Of Cyprus Farms Use Precision Farming Technologies

Cyprus remains one of the European Union’s least digitised agricultural economies, with just 1% of farms using precision farming technologies in 2023, according to Eurostat.

The findings come as the EU continues to encourage the adoption of digital tools aimed at improving agricultural productivity, efficiency and sustainability.

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Internet Access Expands, But Digital Uptake Lags

Internet access has improved across the bloc, although adoption remains uneven. Eurostat found that 43% of EU farms had internet access in 2023, with northern and central European countries leading the way.

Denmark, Germany, Slovakia, Latvia, the Czech Republic and Austria all reported internet access rates above 90%.

Greater connectivity, however, has not translated into widespread digital adoption. Farm management information systems, which help farmers manage day-to-day operations, were used by only about 11% of EU farms. France was a notable exception, with around 60% of farms using the technology.

Precision Farming Concentrated In Larger Operations

Robotics adoption also remained relatively limited, with only about 7% of EU farms using robotic technologies. Overall, around 18% of farms with utilised agricultural area employed at least one precision farming technology or practice in 2023.

These included robotics for plant protection, band spraying, variable-rate application, precision crop monitoring and soil analysis. Despite representing fewer than one in five farms, these holdings accounted for around 44% of the EU’s utilised agricultural area.

The figures suggest that precision farming remains concentrated among larger agricultural businesses, where investment in digital technologies is typically easier to support.

Cyprus Lags Behind EU Leaders

Luxembourg, Finland and Estonia recorded the highest shares of utilised agricultural area managed by farms using precision farming technologies, each exceeding 75%.

At the other end of the ranking, Cyprus recorded just 1%, while Greece and Romania reported between 10% and 15%. The results indicate that Cyprus remains at an early stage of digital adoption in agriculture, even as precision farming becomes more widespread across parts of the European Union.