Energy Transitions Commission (ETC) Urges Government and Industry Collaboration to Overcome Perceptions of Offshore Wind Energy 'in Crisis'

London (ots/PRNewswire) - The latest insights briefing from the Energy
Transitions Commission, Overcoming Turbulence in the Offshore Wind Sector ,
highlights the need for governments and the offshore wind industry to join
forces to restore confidence in the market, drive down costs and accelerate the
clean energy transition. The ETC's membership includes offshore wind industry
players: bp, Iberdrola, Octopus Energy, Petronas, Shell, SSE, and Vattenfall.

Offshore wind is already delivering large-scale clean electricity at a
competitive cost around the world. In Western Europe, costs fell 60% between
2015-2022. Installations are growing rapidly. From 2015 to 2023, global capacity
has expanded sixfold from 12 to 74 GW, already producing energy for around 90
million households, and with vast potential to scale further.

But in 2022-2023, inflation, supply chain bottlenecks, and higher interest rates
led to rising offshore wind costs in some markets. A perceived offshore wind
"crisis" ensued, in the UK and US markets in particular, as many projects and
contracts were cancelled.

While increases were significant, they're mostly expected to be short-term.
Costs in Western markets are already coming back down as most drivers were
temporary in nature (e.g., supply chain bottlenecks due to COVID, a 200%
increase in steel costs), although the increase in cost of finance may remain
over the medium term. Meanwhile, technological progress and large-scale
production drove consistent cost reductions in China over the same period,
illustrating that offshore wind can be even cheaper and more competitive in the
future.

"Offshore wind is vital for the clean energy transition. It can generate
electricity when the sun isn't shining and doesn't compete for land use. Now is
a critical period to rapidly accelerate wind capacity if the world is to achieve
net-zero emissions by mid-century. Governments should act now to restore market
confidence by setting ambitious offshore wind targets and design auctions and
contracts which provide market certainty and drive costs down." - Adair Turner,
Chair, Energy Transitions Commission

Estimates from the International Energy Agency (IEA) suggest that offshore wind
has the potential to generate more than 420,000 TWh per year worldwide,
equivalent to 14 times today's global electricity generation. To achieve a
net-zero economy built on clean electricity, annual wind generation needs to
grow tenfold from 2,000 TWh in 2022 to over 20,000 TWh by 2050. This will be
complemented by a thirtyfold growth of solar capacity from 1,000 TWh in 2022 to
~30,000 TWh by 2050.