Gone with the wind! A first look at the GWEC Global Wind Report 2024

19 April 2024
The offshore wind industry has experienced tremendous growth this century but needs to treble again in the next decade to maintain the 1.5C pathways as per COP28 targets.
Some interesting macro and micro themes are contained within the GWEC Global Wind Report published this week (download here). Providing an overall summary of a 166-page report is beyond the scope of a blog post but four interesting themes caught our attention.
(Context before we begin: the Global Wind Energy Council is an industry trade body that combines its own views with those of other regional and country-level trade bodies and exists to further the interests of its members which include developers and OEMs. It publishes several regular reports on various aspects of the wind industry.)
Observation #1: Humanity can do some really impressive things!
Amongst all the noise, headlines and hysteria around energy, it is only fair to commend the historic growth of the wind sector, both offshore and onshore.

As GWEC notes: “[We] can see strong progress by the wind industry in commissioning huge volumes of renewable energy. 2023 saw the highest number of new installations in history for onshore wind (over 100 GW) and the second highest for offshore wind (11 GW). We passed the symbolic milestone of 1 TW installed globally and, at the current rate, we expect to hit 2 TW before 2030.”
Observation #1: Wind power generation needs to grow even faster
As the GWEC continues: “Nonetheless we must acknowledge, firstly, that this rate of growth still leaves us far short of the tripling target and, secondly, that our sector has been tested by the tough macroeconomic environment. Global inflationary pressures, the rising cost of capital and fragility in the supply chain have affected our ability to ramp up in many regions.”

The report itself does not explicitly state that it is behind target, rather it provides all the pieces of the jigsaw to arrive at that conclusion. COP28, and the stated commitment to “Commit to work together to triple the world’s installed renewable energy generation capacity” is mentioned many times through the report as is the implied need to increase wind energy capacity from 1TW to 3TW by 2030.
The report provides annual capacity additions and mentions that 2GW will be achieved “before 2030” but does not plot installed capacity to 2028 or 2030. However, the latter can be achieved using the data provided in the report and extrapolating 2029 and 2030 using the compound annual growth rate provided in the GWEC forecast of 9.4%.
On this basis, the overall installed wind generation capacity (onshore and offshore) can be expected to reach just over 2.2TW by 2030, falling some 800GW short of the tripling of capacity needed to support COP28 commitments. This implies that (a) other renewable sources will have to more than triple installed capacity to make up the difference; or (b) the COP28 commitment is simply unrealistic and undeliverable, ceteris paribus.
Observation #2: A bullish view of the USA
Despite noting the lowest level of installation activity in 2023 in the USA “since 2014” and that “the USA has installed only 6.4GW of capacity in 2023, less than half the volume it had installed two years earlier”, the report is bullish on the prospects for the USA market. This is based on the expected impact of the Inflation Reduction Act. GWEC expects some 65GW of capacity to be added overall in the US between 2024 and 2028 and that the US Offshore market will be “the largest offshore wind market in the world after China and the UK in terms of new additions” with 10GW of capacity to be added in the next five years.

The report does however highlight challenges in permitting development delays, cost inflation and supply-side constraints, in addition to the potential prospect of a change in government in this election year.

State-level opposition is also highlighted as an issue for the wind business. When trying to understand why this is the case, a look at pricing is important. It is often stated that an increase in renewables in the energy mix is driving higher electricity prices and whilst that may be true and observable in the data, we have also seen unprecedented global price fluctuation in natural gas in recent years, partially as a result of gas supply challenges faced after the invasion of Ukraine by Russia, which has impacted the US market in turn. Electricity prices are 30% higher than they were in January 2014 but natural gas prices are 37% higher as of March 2024 and natural gas has seen far more variability, at times reaching 74% higher.
Observation #3: An increased dependence on offshore wind
GWEC notes that 2023 was a record year for offshore installations with an additional 10.8GW of additional capacity installed, bringing the total installed capacity to 75.2GW. A “perfect storm” of “inflation, increased capital costs and supply chain constraints” caused interruption to prospective projects over the year. GWEC highlight the “rapid innovation curse” which in the offshore wind business has seen a race to build increasingly larger turbines.

However, this presents a “risk to a sustainable supply chain” where the changes in the wind turbine design impact the rest of the supply chain which “needs to adapt and follow suit.” GWEC rightly suggests that larger turbines are not a goal to be continually chased and that more important to the industry is the standardisation of components and streamlining of supply chains.

GWEC data suggest an increasing reliance on offshore in the future with the rate of installations accelerating and out-pacing onshore, leading to an increase in the share of the installed base that is offshore from 7.3% in 2023 to 11.8% in 2028.
Given that projects are getting larger and farther from shore, this bodes well for the rotorcraft sector where aviation delivers vastly improved safety, availability and emissions profile when measured against marine logistics.
Observation #4: We’re going to need more helicopters
In a previous wind report on the helicopter sector, we noted that: “Offshore wind has become a major global industry with many multi-billion-dollar projects being constructed every year. [Rotorcraft] has become a key part of the supply chain in construction and maintenance.”
“Having analysed the costs and benefits of transporting crew offshore we believe that rotorcraft are a commercially-attractive proposition to support both the construction and operation of offshore wind farms. Furthermore, we understand that crew transportation by rotorcraft will offer the lowest CO2 per passenger mile of any currently available option and the highest availability to the end user, providing that latest generation aircraft are used.”
We are in the process of updating our offshore wind model but would note that the previous estimates of ~US$360 million expenditure for both heli-hoisting and crew transfer via rotorcraft, and also the ~US$1 billion for the capex on ~100 extra helicopters over the next 10 years, will likely have to be revised upwards.
Concluding Thoughts
Exponential scaling is not easy, but we are optimistic that the world is beginning to reach V1 (to use a fixed-wing term) when it comes to renewable energy and wind growth.
We will continue to analyse these trends as 2024 unfolds. Please keep in touch with our Insights on market dynamics for global wind power and the likely benefits for the rotorcraft sector.