Offshore Wind Market Report: 2022 Edition

EXECUTIVE SUMMARY
Offshore Wind Market Report: 2022 Edition Executive Summary

Disclaimer
This work was prepared as an account of work sponsored by an agency of the United States
Government. Neither the United States Government nor any agency thereof, nor any of their
employees, nor any of their contractors, subcontractors or their employees, makes any warranty,
express or implied, or assumes any legal liability or responsibility for the accuracy,
completeness, or any third party’s use or the results of such use of any information, apparatus,
product, or process disclosed, or represents that its use would not infringe privately owned rights.
Reference herein to any specific commercial product, process, or service by trade name,
trademark, manufacturer, or otherwise, does not necessarily constitute or imply its endorsement,
recommendation, or favoring by the United States Government or any agency thereof or its
contractors or subcontractors. The views and opinions of authors expressed herein do not
necessarily state or reflect those of the United States Government or any agency thereof, its
contractors or subcontractors.

ii
Offshore Wind Market Report: 2022 Edition Executive Summary

Authors
The authors of this report are:
Walter Musial, National Renewable Energy Laboratory (NREL)
Paul Spitsen, U.S. Department of Energy
Patrick Duffy, NREL
Philipp Beiter, NREL
Melinda Marquis, NREL
Rob Hammond, NREL
Matt Shields, NREL.

Acknowledgments
The authors would like to extend thanks to Gage Reber, from the U.S. Department of Energy
(DOE) Wind Energy Technologies Office, for supporting this research. Thanks also to Liz
Hartman, Patrick Gilman, Jocelyn Brown-Saracino, Dan Beals, and Monica Maher from the
DOE Wind Energy Technologies Office for their support and strategic guidance.
The authors would also like to thank the following reviewers and contributors from the National
Renewable Energy Laboratory (NREL): Brian Smith, Paul Veers, and Eric Lantz.
This report was peer-reviewed by a diverse group of offshore wind energy industry stakeholders
including developers, wind turbine manufacturers, state government representatives, internal
DOE Office of Energy Efficiency and Renewable Energy staff, NREL management staff,
consultants, and regulators. These peer reviewers include:
• Liz Burdock, The Business Network for Offshore Wind
• Brandon Burke, Ramboll
• Bruce Carlisle, Massachusetts Clean Energy Center
• Maxwell Cohen, Ørsted
• Adrienne Downey, Hexicon
• Eric Hines, Tufts University
• Cheri Hunter, Bureau of Safety and Environmental Enforcement
• Josh Kaplowitz, American Clean Power
• Jeff Kehne, Magellan Wind
• Angel McCoy, Bureau of Ocean Energy Management

iii
Offshore Wind Market Report: 2022 Edition Executive Summary

• Garth Neuffer, Offshore Wind California

• Kris Ohleth, Special Initiative on Offshore Wind
• Jørn Scharling Holm, Ørsted
• Adam Stern, Offshore Wind California
• Necitas Sumait, Bureau of Ocean Energy Management
• Abby Watson, Mainstream.
Editing was provided by Sheri Anstedt (NREL) and graphics and cover design were created by
John Frenzl (NREL). Additional communications and coordination were provided by Alex
Lemke (NREL), Amy Howerton (NREL), and Jen Grieco (NREL). This report was produced by
NREL for DOE’s Office of Energy Efficiency and Renewable Energy Wind Energy
Technologies Office.

Table of Contents
Disclaimer...................................................................................................................................................... ii
Authors......................................................................................................................................................... iii
Acknowledgments........................................................................................................................................ iii
Executive Summary....................................................................................................................................... 1
U.S. Offshore Wind Energy Market .......................................................................................................... 1
Global Offshore Wind Energy Market ...................................................................................................... 3
Offshore Wind Energy Technology Trends ............................................................................................... 5
Offshore Wind Energy Cost and Price Trends .......................................................................................... 5
Future Outlook ......................................................................................................................................... 5
References .................................................................................................................................................... 7

iv
Offshore Wind Market Report: 2022 Edition Executive Summary

Executive Summary
The “Offshore Wind Market Report: 2022 Edition” provides detailed information on the U.S.
and global offshore wind energy industries to inform policymakers, researchers, and analysts
about technology, economic, and market trends. The scope of the report covers the status of over
257 global operating offshore wind energy projects as well as the broader global pipeline of
projects in various stages of development through December 31, 2021. To provide the most up-
to-date data and discussion of this emerging industry in the United States, this report tracks the
most significant U.S. domestic industry progress and events from January 1, 2021, through May
31, 2022.

U.S. Offshore Wind Energy Market

By May 2022, the U.S. offshore wind energy project development and operational pipeline grew
to a potential generating capacity of 40,083 megawatts (MW). The 40,083 MW in the U.S.
offshore wind energy pipeline was 13.5% over the 35,324 MW reported in the “Offshore Wind
Market Report: 2021 Edition.” This expansion in the U.S. project pipeline was driven by the
Bureau of Ocean Energy Management’s (BOEM’s) “Offshore Wind Leasing Path Forward
2021‒2025,” which auctioned eight new lease areas in the Atlantic and converted two California
Call Areas into new wind energy areas (WEAs) (U.S. Department of the Interior 2021). Even
though three of the existing WEAs were reclassified as “dormant” and removed from the
pipeline, the net expansion was 4,759 MW higher than the capacity reported in May 2021. A
map of the current pipeline activity and Call Areas is shown in Figure ES-1.
States policies aim to procure at least 39,322 MW of offshore wind capacity by 2040. The
U.S. offshore wind energy market continues to be driven by state-level offshore wind
procurement activities and policies. In aggregate, offshore wind policies in eight states call for
deploying at least 39,322 MW of offshore wind capacity by 2040, which is approximately the
same as reported in the “Offshore Wind Market Report: 2021 Edition.” These policies provide a
pathway to achieving the national offshore wind target of 30 gigawatts (GW) by 2030 (The
White House 2021).
BOEM announces plan to develop WEAs in up to seven U.S. regions by 2025. In October
2021, BOEM announced its “Offshore Wind Leasing Path Forward 2021‒2025,” calling for
plans to hold up to seven new offshore wind lease auctions including the New York Bight,
Carolina Long Bay, Central Atlantic, Gulf of Maine, California, Oregon, and the Gulf of
Mexico by 2025 (U.S. Department of the Interior 2021). The new lease areas will substantially
increase the number of viable offshore wind energy sites in the United States, provide regional
diversification beyond the north and mid-Atlantic, and enable technology diversification by
introducing the first commercial lease opportunities for floating offshore wind.

1
Offshore Wind Market Report: 2022 Edition Executive Summary

BOEM held lease auctions for six new lease areas in the New York Bight and two lease
areas in Carolina Long Bay. In February 2022, BOEM auctioned six lease areas in the New
York Bight selling for $4.37 billion. The lease area selling prices ranged from a winning bid of
$285,000,000 for OCS-A 0544 ($1,637,931/per square kilometer [km2]) to a winning bid of
$1,100,000,000 for OCS-A 0539 ($2,380,952/per km2). The auction set records for total revenue
generated from an offshore energy lease auction in the United States. In May 2022, the two lease
areas in the Carolina Long Bay auction sold for a combined total of $315 million, with an
average sale price of $707,894/per km2.
As of May 31, 2022, 24 offtake agreements to purchase offshore wind energy were signed in
the United States. Eight states have unique targets with varying offtake mechanisms to procure
electrical generation from specific offshore wind projects. These state policies have resulted in 24
power offtake agreements, adding up to 17,597 MW of offshore wind energy contracts. From the
beginning of 2021 through May 31, 2022, 10 new offtake agreements, totaling 11,874 MW,
were signed.

2
Offshore Wind Market Report: 2022 Edition Executive Summary

Figure ES-1. Locations of U.S. offshore wind pipeline activity and Call Areas as of May 31, 2022. Map created
by NREL

Global Offshore Wind Energy Market

Global offshore wind energy in 2021 had a record year for deployment with about 17,398
MW of new projects commissioned. The surge in offshore wind energy deployment this year
pushed global installed capacity past 50 GW. This growth was largely attributed to China, which

3
Offshore Wind Market Report: 2022 Edition Executive Summary

commissioned 13,790 MW—more capacity in 1 year than the entire world has installed in any
single previous year. The United Kingdom had the next largest annual deployment (1,855 MW),
followed by Vietnam (643 MW), Denmark (604 MW), the Netherlands (402 MW), and Taiwan
(109 MW) (National Renewable Energy Laboratory Offshore Wind Database 2021). By the end
of 2021, cumulative global offshore wind installed capacity grew to 50,623 MW from 257
operating projects. Projections indicate that annual global capacity additions may fall below the
2021 pace in 2022 but overall, new deployments will likely accelerate up to 2025 and beyond.
The global generating capacity potential of the project pipeline for all offshore wind energy
projects reached 368 GW in 2021. As of December 31, 2021, the global pipeline for offshore
wind energy development capacity was assessed to be 368,170 MW, up nearly 20% over the 308
GW reported in 2020. The uptick is primarily attributed to multiple new Asian projects
announced this year that are entering the planning phase.
Macroeconomic and geopolitical events have raised the level of market uncertainty in 2022.
The extended impact of monetary policy, the COVID-19 pandemic, and the ongoing conflict in
Ukraine have created macroeconomic volatility, supply chain disruptions, and inflationary
pressures. These complex external drivers are having both positive and negative impacts on
offshore wind and broader energy industries. Increased fossil-fuel prices have led nations around
the world to accelerate the development of renewable energy to mitigate rising consumer
electricity costs and strengthen their energy security. On the other hand, increased commodity
prices and continued supply chain disruptions threaten to slow offshore wind cost declines or
potentially increase costs, which could dampen offshore deployment in the near term (Vestas
2022).
The global pipeline for floating offshore wind energy more than doubled in 2021. Overall,
the 2021 global floating offshore wind pipeline grew from 26,529 MW to 60,746 MW,
representing 34,217 MW of growth since the “Offshore Wind Market Report: 2021 Edition.”
This growth is attributed to several new projects in South Korea, the United Kingdom, Brazil,
and Australia entering the pipeline and beginning their planning phase during 2021.
Three floating offshore wind projects came online in 2021, totaling 57.1 MW of new
floating capacity. The largest floating offshore wind project built to date (50 MW total—2 MW
of which moved from Portugal in 2021), Kincardine Offshore Wind Farm, came online in
Scotland (Principle Power, Inc. 2021). A 5.5-MW floating demonstration project came online in
China, which was developed by China Three Gorges Group (Russell 2021). Additionally, the
3.6-MW TetraSpar Demonstration Project was installed in Norway at a water depth of 200
meters (Stiesdal A/S 2021). With these additions, the total global floating offshore wind capacity
is now 123.4 MW.

4
Offshore Wind Market Report: 2022 Edition Executive Summary

Offshore Wind Energy Technology Trends

Offshore wind turbines in the 15-MW class are advancing toward commercial production.
After the three leading wind turbine manufacturers announced their plans to develop wind
turbines in the 15-MW class last year, a leading Chinese manufacturer, MingYang, announced its
plans to deliver a 16-MW wind turbine for the commercial market by 2024. These 15-MW class
wind turbines are under full development at Siemens Gamesa, Vestas, and General Electric, with
intentions to have them available for purchase by 2024 or sooner. Industry announcements
indicate that developers will be depending on these turbines for most U.S. projects.

Offshore Wind Energy Cost and Price Trends

The levelized cost of energy for fixed-bottom projects commissioned in 2021 has declined to
$91/megawatt-hour (MWh) on average, with a range of $75/MWh to $116/MWh globally.
This decline represents a reduction of 4% on average compared to 2020, bringing the total cost
reduction to more than 50% since 2014 (Wiser et al. 2021). For representative market scenarios,
leading research entities and consultancies estimate that levelized cost of offshore wind energy
will be $64/MWh on average by 2030 and range between $41 and $48/MWh by 2050.
Record-setting lease auction prices in New York Bight are followed by auction format
changes to benefit states and local stakeholders. The $4.37 billion paid for leases in the New
York Bight was unprecedented. While signaling strong confidence in the offshore wind energy
market, those high lease prices translate to about $763/kilowatt and raise concerns about higher
electricity costs from offshore wind. In May 2022, the BOEM auction rules were modified for
the Carolina Long Bay auction using multifactor bidding criteria that allow bidding credits to be
allocated for supply chain commitments. A multifactor approach is also planned in the next
upcoming lease auction in California scheduled for late 2022 that will allow bidding credits for
local benefits.

Future Outlook
Although still at the beginning stages in the United States, offshore wind is now recognized
globally as one of the principal energy sources to combat climate change. Global offshore wind
energy deployment is forecast by 4C Offshore and BloombergNEF to increase globally to about
260 GW or more by 2030 (4C Offshore [2022]; BloombergNEF [2021]) and the number of
countries currently generating from offshore wind is expected to double over the next decade
(Ferris 2022). U.S. domestic offshore wind energy deployment is expected to follow global
growth trends, driven by robust state-level procurement targets, and a national target of 30 GW
of offshore wind energy by 2030, set in March 2021. Following BOEM’s October 2021
announcement to ramp up offshore leasing on the Outer Continental Shelf, and the record-setting
lease prices observed in the New York Bight auction in February 2022, the U.S. industry is
signaling rapid growth, and expanding to regions outside the North and mid-Atlantic. In the
coming years, national leasing plans call for offshore wind energy auctions in the Gulf of

5
Offshore Wind Market Report: 2022 Edition Executive Summary

Mexico, Pacific, South Atlantic, and the Gulf of Maine by 2024, which would allow commercial
development as early as 2030. As these regions integrate offshore wind into their regional
electricity markets, the industry will need to tackle new technical challenges, such as hurricane
survival, deeper water, and lower average wind speeds, but through continued industry research
the solutions are attainable (National Offshore Wind Research and Development Consortium
2021; U.S. Department of Energy 2022). In particular, the development of floating wind
technology is likely to continue to gain momentum as the industry works toward cost parity with
fixed-bottom wind technology through economies of scale and global market growth. Beyond
the near-term leasing plans, the United States could also see offshore wind move forward by the
end of the decade in regions like Hawaii, Puerto Rico, and the Great Lakes, where technical
feasibility, resources, and energy demand requirements are already being investigated. The
domestic and global push for clean, carbon-free electricity and complete decarbonization of all
energy sectors is likely to remain a primary driver in the United States for offshore wind, but
caution should be taken as the path forward is not free from obstacles. Uncertain and fluctuating
policy support, stakeholder concerns, constrained global supply chains, inflation, restrictive
legislation for ocean development, land-based grid limitations, and geopolitical conflicts will
pose challenges that could potentially moderate or constrain the industry’s progress.
The Biden administration’s 30-GW-by-2030 goal suggests a strong pace of development and
establishes a pathway to deploy 110 GW or more of offshore wind energy in the United States by
2050 (The White House 2021). This amount of offshore wind energy deployment would
comprise a substantial part of a comprehensive U.S. decarbonization strategy, but further
research is needed to determine the extent of offshore wind’s role in a decarbonized energy
future.

6
Offshore Wind Market Report: 2022 Edition Executive Summary

References
4C Offshore. 2022. Global Offshore Wind Farm Intelligence (Online Database). February 2022.
https://www.4coffshore.com/windfarms/.

BloombergNEF. 2021. Renewable Energy Project Database. https://about.bnef.com/.

Ferris, Nick. 2022. “The number of countries generating offshore wind power is set to double.” April 18,
2022. Energy Monitor. https://www.energymonitor.ai/sectors/power/weekly-data-the-number-of-
countries-generating-offshore-wind-power-is-set-to-double.

National Renewable Energy Laboratory. 2021. Offshore Wind database. Internal database.

National Offshore Wind Research and Development Consortium. 2021. “Research and
Development Roadmap 3.0.” https://nationaloffshorewind.org/wp-content/uploads/Roadmap-
3.0-June-30-2021.pdf.

Principle Power, Inc. 2021. “KOWL: World’s largest floating windfarm fully operational.”
October 19, 2021. https://www.principlepower.com/news/kowl-worlds-largest-floating-
windfarm-fully-operational.

Russell, Tom. 2021. “China’s first floating turbine installed.” July 13, 2021.
https://www.4coffshore.com/news/china27s-first-floating-turbine-installed-nid23856.html.

Stiesdal A/S. 2021. “The TetraSpar full-scale demonstration project.” December 2021.
https://www.stiesdal.com/offshore-technologies/the-tetraspar-full-scale-demonstration-project/.

The White House. 2021. “FACT SHEET: Biden Administration Jumpstarts Offshore Wind
Energy Projects to Create Jobs.” Washington, D.C. https://www.whitehouse.gov/briefing-
room/statements-releases/2021/03/29/fact-sheet-biden-administration-jumpstarts-offshore-wind-
energy-projects-to-create-jobs/.

U.S. Department of Energy. 2022. Offshore Wind Energy Strategies; Regional and national
strategies to accelerate and maximize the effectiveness, reliability, and sustainability of U.S.
offshore wind energy deployment and operation.
https://www.energy.gov/sites/default/files/2022-01/offshore-wind-energy-strategies-report-
january-2022.pdf.

U.S. Department of the Interior. 2021. “Secretary Haaland Outlines Ambitious Offshore Wind
Leasing Strategy.” Press Release. October 13, 2021.
https://www.doi.gov/pressreleases/secretary-haaland-outlines-ambitious-offshore-wind-leasing-
strategy.

Vestas. 2022. “First Quarter 2022: Vestas Wind Systems A/S.”

https://www.vestas.com/content/dam/vestas-com/global/en/investor/reports-and-
presentations/financial/2022/2022%20Q1%20Investor%20presentation.pdf.

For more information, visit:

energy.gov/eere/xxxx

7
Offshore Wind Market Report: 2022 Edition Executive Summary

Wiser, Ryan, Joseph Rand, Joachim Seel, Philipp Beiter, Erin Baker, Eric Lantz, Patrick
Gilman. 2021. “Expert elicitation survey predicts 37% to 49% declines in wind energy costs by
2050.” Nature Energy, April 15, 2021, 1–11. https://doi.org/10.1038/s41560-021-00810-z.