| |OCTOBER - 20238IN MY OPINIONIN MY OPINIONOffshore wind is poised to become one of the key technologies powering the decarbonisation of the global economy. Wood Mackenzie projects that almost US$1 trillion will flow into the offshore wind industry over the next decade. By 2030, we expect 24 countries to have large-scale offshore wind farms, up from nine today, with total capacity likely to reach 330 GW, up from 34 GW in 2020. There is further upside potential, too, such as Europe's accelerated push to capitalise on offshore wind and other renewable technologies to reduce its dependence on Russian gas and coal. Similarly, competitively priced offshore wind is likely to play an important role in powering electrolysers to produce hydrogen, so some of its growth will be tied to the scaling up of the green hydrogen industry.The opportunity in offshore wind has not gone unnoticed and is attracting a growing number of competitors. We're seeing a new set of factors beyond the bidding price emerging, which will determine winners and losers in offshore wind. They also offer an opportunity to improve margins by shifting the focus away from just price and offering new avenues for innovation and differentiation. These four factors ­ increasingly cropping up as criteria in the tender and auction process ­ will necessitate a strategic shift for competitors in the offshore wind industry. We expect the trend to accelerate in the coming decade and to include elements not prominent in today's tenders. These new factors are as follows.Local content: Of the four new factors, local content policy, is already in many tenders and auctions. Local content is the value a project can bring to a local, regional or national economy. We estimate that almost 80% of capacity connected between 2021 and 2031 will be influenced by local content policies, more than double the share of capacity influenced by them to date.The focus on local content has been particularly strong in new offshore wind markets in Asia and, more recently, the US, where commitments on economic contributions to local workforce and infrastructure investments are already exceeding US$1 billion, although the first commercial project has yet to be installed.The COVID-19 pandemic has placed stronger emphasis on jobs everywhere, however. Each market will have its own flavour By Søren Lassen, Head of Global Offshore Wind Energy Research, Wood MackenzieOFFSHORE WIND: A KEY TECHNOLOGY POWERING GLOBAL DECARBONISATIONSøren Lassen
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