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publication October 31, 2019

Expanding Offshore Wind to Emerging Markets


Image of Dudgeon Offshore Wind Farm 22/ Jan Arne Wold/Woldcam, Aug 2017


  • As prices continue to fall, offshore wind power is increasingly gaining traction in emerging markets, beyond its current proliferation in Europe and China.
  • By some estimates, offshore wind could add anywhere between seven and 11 gigawatts (GW) per year from 2019 to 2024, with substantial potential in developing countries.
  • This new report estimates that the technical potential for offshore wind in Brazil, India, Morocco, the Philippines, South Africa, Sri Lanka, Turkey and Vietnam at 3.1 terawatts – which is about three times the installed electricity generating capacity of all EU countries. This includes 1,016 GW of fixed and 2,066 GW of floating potential.

Mainstreaming offshore wind could soon become reality.

Once considered a costly alternative to onshore wind power, and largely limited to Europe and China, offshore wind is starting to show promise as a clean, cost-competitive choice for electricity generation in developing countries, thanks to rapid improvements in technology and a steady reduction in costs.

In fact, the technical potential for offshore wind in Brazil, India, Morocco, the Philippines, South Africa, Sri Lanka, Turkey and Vietnam is about 3.1 terawatts – well above their current installed power generation capacity and about three times the installed electricity generation capacity of all 28 EU countries – according to a new World Bank Group report, “Going Global: Expanding Offshore Wind in Emerging Markets.”

The report looks at offshore areas within 200 km (124 mi) of each country’s coast, taking advantage of the data available from the latest version of the Global Wind Atlas. While some countries, such as India, Sri Lanka and Turkey, have significant fixed offshore wind potential in shallower waters, others such as the Philippines and South Africa require floating foundations to account for higher depths – up to 1,000 meters.

Highlighting the challenges and opportunities for offshore wind markets in these countries, the report also assesses the technical potential, proximity to demand centers, relevant policies and energy targets, and how they fit within current and future regional offshore wind markets.

The report follows the establishment of a new World Bank Group program that aims to fast-track the expansion of offshore wind power in developing countries and provide technical assistance to these countries, so they can assess their offshore wind potential and develop a pipeline of projects that are investment-ready.

Offshore wind is a substantial, renewable source of energy for developing countries seeking alternatives to fossil fuels for their energy mix and to implement environmentally sustainable energy access solutions. The industry has grown nearly five-fold since 2011, with 23 gigawatts installed at the end of 2018. A large volume of planned projects are in Europe, China and the United States – but there is significant potential in emerging markets as well, the report shows.

Offshore wind now represents about $26 billion in annual investments – or 8 percent of new global investments in clean energy. This proportion is set to increase dramatically, with an estimated $700 billion in investments for 190 GW in installed capacity by 2030.  

For countries like Vietnam, which currently has an installed capacity of just over 40 GW - less than 10% of its 475 gigawatts (GW) of technical potential for fixed and floating offshore wind energy - this signals a significant opportunity for cost-competitive, large-scale offshore wind projects located close to areas of high energy demand.

The uptake of offshore wind in emerging markets will entail tackling some key challenges:

  • Offshore wind development is driven by policy. For a project to be successful, a stable policy environment is critical.
  • Offshore wind construction is more complex and time-consuming than its onshore counterpart. An offshore wind farm takes anywhere between five to ten years to develop, requires $10 to $50 million in development costs and advance planning to link the power generated to the electricity grid onshore.
  • Financing offshore wind projects can be challenging. Capital expenditures can go beyond $2 billion and involve risks associated with the complexity of construction, thereby requiring innovative financing such as and project management.
  • For offshore wind projects to take off in low and middle-income countries, concessional financing or other forms of public support will be essential initially, since these projects are more capital-intensive compared to conventional power projects or those that use onshore renewables including wind and solar. Starting with a solid foundation will be essential to drive down costs for offshore wind and make it a financially viable option.
  • Offshore wind development must be tailored to suit the unique needs of a country. This could entail anything from adapting to challenging water depths and less robust grids, to accounting for extreme weather, mitigating impacts on marine and avian wildlife and income generating activities like fishing.
  • Regional cooperation is key to achieving economies of scale. To achieve competitive pricing and drive supply chain development, a regional approach is required to generate sufficient scale. Without regional cooperation, individual governments might be more inclined to attempt to create markets independently, building supply and value chains where they may not make sense.

With further analysis and careful consideration and planning, it is possible for developing countries to harness the power of the wind to reach their clean energy and climate goals.

The report was produced by the World Bank’s Energy Sector Management Assistance Program (ESMAP), in partnership with the International Finance Corporation (IFC).